Here is part 1 of the Trend Trading course. Introduction To Trading is geared towards someone who would like to know the basics of trading either stocks or options and the basic of trade order entry and money management. More videos to follow.
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I’ve been out of the market since March 2008 and for a good reason. The subprime financial mess has far and wide reaching ripples effects which is now causing more and more problems for the financial markets.
Today, Lehman Brother files for bankruptcy and Merrill Lynch was forced to sell itself to Bank of America for $50 billion in stock, sending the U.S stock markets tumbling and investor confidence down with it.
I was wondering to myself “Is the 415 point rally the stock market had on the Dow Jones Industrial sustainable?”
The answer here is no, the stock market is really volatile. Today, the Dow is down about 235 points right now due to bad news from the financial sector, which will in the near future I think keep rearing its ugly head.
by Das Brain
I added a new category to my blog called “Trading Psychology” to explore of course the psychology of trading, whether it be stock, option, futures or foreign exchange trading.
Under this category, I will be posting articles that deals with why investors, speculators buy, why they sell and when. Also, how losses in trading can affect your psychology.
I will sharing a lot of my own personal experiences as well under this new category.
In the next few weeks to month, I will be looking to buy into long-term option contracts of selective stocks that look like they’ve reached a bottom. In the last 6 months buying shorter-term CALL option contracts has lead to some losses in my portfolio to be honest.
Look at the chart below of the $DJX, the decline started from mid October 2007 to just January 22, 2008 then a bounce and now we are heading back down.
To be on the safe side, I will now only look at LEAPS which are long-term option contracts with at least 1 year before expiration. Looking at the $DJX Dow Jones 100 chart we can see to the far right of the chart, recently the Dow Jones market has try to form “W” shape but failed, and it looks like it is dipping back down. Read the “Trading the 123 Strategy” for double bottom info.
My guess here is the $DJX may go back down to the 122 (DJIA would be 12200) before turning up or go sideways more with a series of small bounces.
Recent weak economic reports in particular today from the service sector, has turn the markets down. At the time of writing this post, the Dow Jones is down by 293 points, and the Nasdaq (above chart) is down 54 points. From the looks of it, my guess is that the indexes will retest the lows set in the last few weeks.
With only a few hours to go before the FOMC announces their rate cut, I’m wondering which way the Fed will go.
Some think that the Fed might just cut the interest rate by 25 basis points to round out the total cut to 1 percent. This is the total of last weeks emergency cut, plus todays cut if they go .25 of a percent.
by Das Brain
 I was recently told by a trader friend of mine that finally TD Web Broker accounts finally offers direct to market order routing for options contracts. It’s about time, but very late in the game compared to many of the discount brokerage companies out there.
by Das Brain
Over the last 2 trading sessions the stock market indexes has been beaten down. Yesterday the first trading day of the 2008 the markets were slammed and also on the last trading day of 2007. Not very good signs for the health of the U.S stock markets at all.
by Das Brain
Year 2007 as the title of this post suggest was an extremely volatile year for me. At the beginning of 2007 I watched on CNN a gentleman from Hong Kong, talking about the Chinese pig or boar zodiac, and calendar prediction for 2007. The man said that usually years ending with the number 7 are very volatile, and he also mentioned that 2007 has metal, fire and water elements associated with it. Well, when you mix hot metal and water you get a lot of sizzle and volatility and that is exactly what I got for 2007.
by Das Brain
 In my last post of “What Stocks I am Looking At To Buy In Recent Downturn” I specified a few stocks. They are Sandisk, Blue Coat Systems, Coach, Amazon and the Nasdaq ETF. If you look at the charts for these companies the only one that did well was Amazon (AMZN), in my last post I mentioned getting in at $76, it is now at $95.24. Made about $1200 on AMZN options, got out early but “Profit is Profit.”
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