Stock Pick Updates! Stock
By Michael Markowski Company E*Trade Financial Corp.
Stock Symbol: ETFC
December 6th Closed @ 1.70
December 11th Closed @ 1.66
Positioned as a long trade. Update E-Trade Undervalued E-Trade continues to make a slow move up. Even with the news discount brokerage firms have taken 25% of the business from the bigger brokers, it came back .04 from last week. We will be relooking all positions this week and seeing if there are better choices for the up coming weeks.
Company: General Electric
Stock Symbol: GE
Positioned: Removed off Watch List
Stock pick of the Month: Company: Abbot Laboratories
Stock Symbol: ABT
December 6th Closed @ 53.78
December 11th Closed @ 53.77
Positioned as a long trade.
Update
ABT Hit a high this week of 54.35 on Dec.10th, and lost .01 since last Fridays close. They allso set their quaterly dividend Friday at .40. This is still a stock to watch.
Stocks
By Michael Markowski The Action of the Major Market indices on Friday is Telling
December 7, 2009 Friday's stock market action was ominous because the market reacted negatively even though the unemployment data for November 2009, was much better than anticipated. After it was announced that unemployment fell to 10.0% in November from 10.2% in October the major stock market indices including the Dow 30 Industrials and the S&P 500 composite indices opened up strong with the Dow increasing by over 130 points. By lunchtime the Dow had given up all of its gains and the venerable index had turned negative. It closed at the end of the day up by 20 points. The major indices not responding positively to better than expected news is telling. It suggests that the market is tiring and that the easy money for the Bear Market rally has been made. One bell weather company who looks tired and could lead the markets down is Apple (NASDAQ:AAPL). Its shares have been on a tear during 2009. After trading below $100 per share for the first three months of 2009, the shares of Apple have rocketed by over 100% from its 52 week low of $78.20 and are currently trading at $193.00. My rationale for exercising caution is because Apple's annualized Cash Flow from Operations (CFFO) and Free Cash Flow growth rates, although still growing, have decelerated significantly to mid single digits as compared to its last ten quarters. For its most recent 12 months ended September 30th, Apple's annualized CFFO increased by 5.9% and its Free Cash Flow increased by 6.0%. Over its previous 11 quarters dating back to its first 2007, fiscal quarter Apple's annualized CFFO growth rates ranged between 44.9% and 233.5%. Its annualized Free Cash Flow growth rates also ranged between 46.9% and 319.8% over the same period. In analyzing its Financial Statements and particularly its Cash Flow Statement I found worrisome signs for Apple. The only reason why its CFFO and Free Cash Flow even increased over its latest two quarters is because it currently liabilities increased significantly over its previous two quarters in its latest fiscal year ended September 30, 2009. This means that Apple is stretching out the payables that it owes its vendors or in laymen's terms this means that Apple has become a slow payer of its bills so that it can maintain a positive rate of cash flow growth. Also, Apple's receivables have increased sharply by about $1.4 billion over its last two quarters. I don't like to see this especially for a consumer technology products company. It indicates that Apple is putting a higher percentage of its products on retailers' shelves for a promise to pay instead of receiving cash. Those products, which are sitting on retailer's shelves, which Apple has not been paid for, are subject to price markdowns, which occur frequently in the highly competitive arena of consumer electronics. Based on the analysis, which I have done, I believe that the odds are high that Apple could disappoint Wall Street when it files its next quarterly earnings report. Thus, I believe that Apple shares will likely be much lower than $190 after it announces its results for its first quarter ending December 31, 2009. I also believe that Apple's report and subsequent decline in its share price could also have a significant impact on the major market indices including the Dow 30 and the S&P 500. Investors should remain cautious and should use the stock market's major run up, off of its March 2009 lows, to increase their liquidity. For more information on the Super Bear Market and why I expect that it will last until at least 2015
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Be sure to mention
EMT Newsletter
Trader Testimonials "I used to be a London-based equity analyst for many years for a major investment bank before starting to trade online about a year ago. Although I had the requisite analytical skills developed from my previous career, a good understanding of how stocks move on new information, and even though I had worked out a strategy that was suited to my particular strengths, I found myself completely lacking in confidence when it came time to bet money on my ideas. I was working very long hours with no profits to show for it. As Robin would say, I was totally blocked. I would show up at my trading desk in the morning wondering which profitable trades I would fail to act on because I was too timid. After spending four sessions with Robin, I had a breakthrough. Through her techniques, I was able to move from constantly criticizing myself for my mistakes, to a far more constructive attitude of focusing on what actions I needed to move beyond this emotional block. For me, this came down to the insight that although I'm an intuitive person, and hate rules, I could actually develop a more formalized set trading rules that worked for me. Based on this insight, I analyzed all of my trading ideas from the past year (mostly non-executed) both good and bad, discovered that I would have been increasingly profitable as the year went on, using a fairly straightforward system. I am not yet at the point where I can execute trades with total confidence. However, as a result of my sessions with Robin, my attitude to trading has completely changed I am making trades, I am learning new things that I never thought were important, and each day I look forward to refining my trading system. I am a firm believer that everyone has to develop their own trading system and should not rely on a canned approach. But the psychological problems we face as traders fall into certain common patterns. It doesn't matter what your system is if you've got a psychological problem, Robin has seen it many times before, and will have techniques to help you learn how to move beyond it." Coaching client London,England
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How to Maximize Your Learning - As a Trader
By Robin Dayne With so many unhappy with their jobs or getting laid off Trading Seminars and Workshops to change careers are sometimes the solution. But how does someone go to one of these Seminars and learn as much as possible and be able to trade like the instructor? This is the million dollar question. Let me explain the challenge. For someone to trade like the teacher you have to see and understand what they are teaching the way they see it. Now, you're going to say well I heard what he was saying and I even took lots of notes so I got it! WRONG! The reason you might be wrong and I am not saying all of you are, but are you hearing the information the same way the teacher is saying it or are you on the same wave length? You see, we are all different in the way we hear and process information. Even when they hear the same thing, as they hear it, it's being filtered through our mind and each minds filters processes differently. When I did my work with Anthony Robbins and he had a seminar of 3000 people he would do this exercise showing this phenomenon. He would break the room of 3000 into groups of 5 people and ask them to pick a word lets say "education" and he would have each group right down 5 words that they associated with the word education. Then he would have each group of 5 compare their lists to see how many words they had in common. So what do you think? Out of 600 groups how many had 5 words out of 5 words in common in their lists? Nope! ZERO! 4 out of 4 Zero,3 out of 3 in common many we would see 1-2 out of 600! And 2 of 2 and 1- 1 maybe we would as high as 5 groups OUT of 600! I saw this exercise over and over and the same results happened. It used to blow my mind I would ask how could that be possible? Now think about this, this is one word not a sentence, not with technical indicators and not with ever changing market conditions. How we learn ANYthing is really the miracle, isn't it? So now your saying; "So what do we do how do we get on the "same wave length?" Firstly, it's very important to get the details and as many as you can when attending any seminar or workshop. Asking great questions can get to the heart of what you are learning and get you in touch with what the instructor is trying to get across. Questions are your power. In fact, I always say the only bad question is the one that didn't get asked. The power of the question is in the "quality" of the question. When I was on Wall Street in the trading room I would often sit next to the top traders and work to define what they are doing exactly to teach it to others. At that time, in the hay-day of day trading we never used charts. So when studying different trading techniques as they placed the trade I would say: "What are you looking at specifically that caused you to take the trade and what is the sequence your eyes move around the screen?" What do you look at first second and third? Doing this, would produce, great answers and how that trades patterns around the screen would happen. To gather the data and than place the order the same way getting the same results is the key. I would do the same thing for exiting the trade and it was very accurate. At a seminar you don't really have the opportunity to get so myopic but questions should be as specific as possible. Especially if you are watching someone trade live and the trade works out. Asking a very specific question may get to what is really in the head of the trade (teacher). There intuition may come through. Teachers that do not get specific and trade from their intuition are very difficult to replicate because your intuition is not developed yet based on their system. So specifics ARE critical in order for you to trade the same way as the teacher. Remember intuition comes with time, experience and repetition. Even when you get the specifics, getting on the same wave length can be a challenge. You may come to the trading desk with additional "baggage" - fears or emotional blocks already built in and that will really have an affect on your results and actions. My goal is not discourage you from trading. My goal is to give you an edge and give you suggestions to speed up the learning and even become a veracious learner at that. I have called it in past articles, "digging." finding the distinctions and developing the rules that will keep you safe but have you learn quickly and at the same time keep you out of emotional reactions. One of the major reasons I developed the CD -"Sharpen Your Trading" was because I found so many traders didn't have a methodology that would allow them to expand their trading knowledge at a fast pace. This CD gives a trader a way to do this no matter how experienced or what type of trading they do. It also gives the trader several emotional challenges to be aware of and solutions to managing them. It creates habits that will be a foundation for any trader and will speed up the learning curve if you use it. This is so important to your trading and to move towards success as quickly as possible. I know you're saying I am trying to sell you something, but I am not I really want traders to succeed and we all need some form of help. So to encourage you, as a Holiday special I am taking $100 off the CD price as my gift to you. But here is the thing, you cant order it on the net in my store you can only get the discount if you call me directly because I have to place the order manually. Additionally, if you are thinking of coaching as well, I am adding an additional session to each coaching package purchased. So as an example a 5-pack is now a 6-pack for a limited time only and again you have to call it in to get the special. That's a $500 value and well worth it! Ok let's get back to the topic of learning. I would like to give you a few things to do that will also help speed up the learning curve you may want to consider adding into a routine so it becomes a habit. Note: A habit if formed with 21 consecutive days of repetition. Journaling First be sure you are journaling your trades the more detail the better and use the details. Compare the results over a period of time and see if you can create a new rule or distinction within the set-up criteria or any part of the trade. As an example let's say you had a short term trade and you want to fine tune the exit. Time each of the trades from beginning to the end and after a week or month notice the length of time it takes to work or not work, from the data determine the length of time for this trade to succeed, where you have a greater percentage of locking in cash. Now you have a new rule. Stay with the trade. If the trade closes and works or doesn't work notice what's happening on the screen even after the trade is complete. Are there many indicators that will help you if the trade comes up again? Any distinctions? Any Rules? New Solutions Be sure if you have a loss that you know why and come up with a new solution if it comes up again. This is very, very important! Diggers Wanted Become a "digger" keep yourself occupied notice patterns and what is working and not, keep track to see if it's reoccurring. Remember new set-ups come from those that dig and a good set-up works 85% of the time or more. Seminar Questions ALWAYS ask your questions, let go of your egos. You probably paid good money for the instructions and you want to get your monies worth, Ask good quality questions. Remember to be as specific as possible. The more specific the better chance you have to get on the same wave length of the teacher and that's your goal. In the meantime great trading! and Happy holidays! - Robin |
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Think of the season as a way to give back and help those in need. Even the smallest things help! |
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Disclaimer/Nondisclosure
ALL the information in the Robin Dayne Newsletter is for educational purposes only and is the sole property of Robin Dayne Inc. (RDI) and may not be duplicated, recorded or reproduced in any way and includes: verbal, print, e-mail, or any media vehicle without the written permission of RDI.
Trading Room Update ( S&P) All that I am hearing and reading from the very good, day trading, crowd is last week was a tough week to trade. It will improve. This is what trading is all about. Thought for the Week: "Get through the tough times with patience and discipline; the good times will show up." John Hay
Top Traders Advice
Futures
By Chris Vermeulen
ETF Trading Gold, Silver, Oil, Natural Gas and the Index.
December 9th, 2009 Etf trading has made it so easy for traders and investors to get maximum exposure to the entire market without the high fees of mutual funds and manager. There are now etfs covering almost every investment type whether it's stocks, indexes, sectors, commodities, bonds, real estate, currencies etc. In this short report I will quickly show a few charts on what is happening for precious metals and energy. HUI Gold Stock This monthly chart of the gold stocks index you can see how easy it is to trade the market and avoid large sell offs when using technical analysis. Currently gold stocks are in a bull market, testing the 2008 highs. Until we are proven wrong buying stocks after a pullback is a winning strategy.
Read More
Options
By Stan Moore
Is the 9 month rally driven by the "Risk Trade" now at risk?
December 6th, 2009Are investors around the world awaking to the fact that borrowing USD to buy risk assets across the globe may not work anymore? This carry trade strategy has been a God sent to world traders in '09. Did this all change with the Friday's jobs numbers that showed a much greater uptick in economic growth? The FED has been on hold well into a worsening job outlook throughout 2010 and maybe even 2011. Interest rates rallied sharply higher last week. Fed funds futures are looking for rate increases starting mid-next year. Early last week the USD was sitting at a 15 month low holding under the 50 DMA for the last 9 months. Suddenly, Friday morning both the USD and stock markets rallied strongly together. The reality must have set in shortly thereafter because investors rushed to sell risk assets and cover USD shorts. The USD rallied over 1.5% while the S&Ps fell about the same. The USD is now over its 50 DMA. Gold was down over $70 at 1 point Friday but closed only down about $50. Yikes! Friday was some day. Remember bear market rallies are hard and fast. The USD can rally 3-5% before resuming a down trend. I'm guessing markets won't like the USD rally in the short term. However, if in fact the FED really starts to raise rates early next year and not much later as is now the plan, the dollar will resume its sharp rally as the carry trade starts to unwind. Anyway we look at this situation 2010 will be a much harder year to make the same returns investors did this year. This shouldn't affect our E-mini/option trading style. Stock pickers should have a great 2010. Most investors confuse a bull market with brains. These investors will find 2010 will not be easy as '09 was. Looking ahead good economic news may not be so good for stocks. The stronger the economy starts to look the sooner the FED may have to raise rates. We should let Mr. Market tell us what to do.
Futures
By Mark Brown
Gold: A Minor Pullback or a Major Correction.
December 5th, 2009 By Donald W. Pendergast Jr. Market Analyst
Wow what a week it was in the world of Gold! After charging above $1,200 on the front-month futures contract earlier in the week, Gold finally finished the week on a very weak note, closing below $1,150, which was right above the low established a week earlier in the wake of the Dubai debt debacle. Clearly, Gold is beginning a trend reversal on a daily-based time frame, but the technical picture is less clear over the long-term. Let's examine a weekly chart for GLD (one of the financial instruments that holds actual Gold) to get a better fix on what might be expected in this volatile market over the next month or so. Before going any further, I must admit to being a Gold Bug, having been afflicted with this wonderful malady for many years including the time period prior to the recent bull run in Gold from 2001-present. Long-term, and given the abysmal long-term outlook for the US Dollar (and all fiat currencies for that matter), declining mine production (most of the high-quality, easier to mine deposits are used up already) and greater awareness among investors regarding the inclusion of Gold in their portfolios, I believe that Gold will easily make it to $2,500 to $3,000 at some point in the next five years, despite several massive sell-offs along the way to the eventual summit. However, in the here and now, we need to also rely on our charts, technical indicators and COT futures market data (Commitment of Traders report, published weekly by the CFTC) in order to minimize losses and maximize gains by waiting for more opportune times to add to long-term holdings of Gold and/or to capitalize on high probability, short-term moves (up and down) that will likely commence from solid support/resistance (S/R) levels in the weeks ahead.
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