Hybrid Timing Model for Analyzing Stocks and Indices ©
My Market Comments for the Past Month (or so):
For better or for worse, I will remain faithful to the model which I developed with inspiration from the Holy Spirit. Therefore, this agreement is between me and the Holy Spirit. Each day I will justify how my positions are aligned with the model. If a position ceases to be aligned, action MUST BE TAKEN IMMEDIATELY TO RECTIFY THE SITUATION. The failure on my part to do so will constitute a breach of this agreement.
My Comments after Friday (July 27):
What a week. Major losses for the market averages – many nervous investors. But in the end such downdrafts are necessary to keep the game ‘honest’. If we can get by the next couple of days, there is light at the end of this tunnel. All 3 market indices are set to reverse Thursday morning (Aug 2). In addition, AKAM will also join them to the up side. Meanwhile, both GOOG and AAPL are trading out of phase with the markets. They are now both pointing up. As I have said in the past, I am pleased with the model, it is performing very well. I am now working on developing a mechanical investment strategy (primarily for market indices) that uses options trading to grow wealth. I have 3 objectives at this time: 1) make a million with 5K – that still stands, 2) open a hedge fund (options trading) that will be based on the strategy and the model, and 3) write a book about ‘My Journey’ and its evolution. Good luck to all.
On a parting note, I noticed some references to myself on the Google boards and in particular to those of ‘Risky..’. That character needs to take a good look at himself before criticizing others. My work is out in the open for all to see. It is not fair for him and others to make rude and uninformed comments that in many cases are simply not true.
Hang in there because things should improve ‘soon’. Good luck.
Justification of Positions:
I have short positions in QQQQ. They are aligned with the model.
My Comments after Friday (July 20):
This was a wild week. I have to settle down. I ended the week with $2.9K. Given what I did, I am pleased and indeed grateful. I will take the next few days off. I will not go into AAPL although the model is looking for AAPL to go down. However, it is looking for AKAM to go up. That will be interesting to see. Meanwhile, it has all 3 indices pointing down. I am amazed at the performance of the model. I am disappointed with my performance. I need to take my emotions out. When I started My Journey I was better able to do that. I will work at getting my emotions under control. I will also work on my strategy. In closing, I thank the Holy Spirit for the guidance I received. I have received several emails that were somewhat critical of my mixing religion and investing. Let’s get this clear. I am grateful for the insight that I receive from the Holy Spirit with regards to the modeling of the markets. I won’t go further in this discussion except to state that this is my personal belief which I publish on my site. It is a personal expression of my faith which I have chosen to acknowledge in a public way. It is no different than ‘In God We Trust’ that adorns our money.
My plan is to publish a full update of this site only on weekends. I need to focus on improving my trading skills. However, I will update my graphics every day for my personal use. The graphics are in a PowerPoint file. I would be willing to email the updated PowerPoint file everyday to readers who have a keen interest in following the ‘predictions’ of the model. So, if you are interested, drop me an email and I will start constructing a mailing list. Remember what I am offering on a daily basis are the 6 graphics without any commentaries. In addition, I will update this web site every weekend. So stay tuned and good luck.
Justification of Positions:
I have no positions at this time.
My Comments after Tuesday (July 17):
I will pass on making comments today. It is late and I am exhausted. Take a good look at the graphics. They are revealing. There is a lot happening. Good luck.
Justification of Positions:
I have two positions. They are short positions (puts) for IWM and QQQQ. Unfortunately, the QQQQ reversal faked me (and the model) out and it just avoided my leveraging. At this point, my position is worth very little. Thus, I will keep it for now, especially since NDX is about to reverse to the down side. My other position is well leveraged and while I am on the wrong side, IWM is about to reverse to the down side. In fact, all 3 indices may reverse to the down side tomorrow. So I will hold my short positions and take it one day at a time. Stay tuned.
My Comments after Monday (July 16):
As we go into Tuesday we have AAPL, GOOG and now AKAM (it reversed today) pointing down. NDX is a day away from reversing to the down side. And SPX and IWM are 2 days away (tentatively). Naturally, one must understand that when I say a reversal is 2 days away, that statement implies a ‘normal’ course of events in the next 2 days. If the situation deviates substantially from ‘normal’ then the length of 2 days is reassessed. The bottom line at this time is that there is a short term down trend immediately ahead. It may be earnings driven by companies like GOOG. I’m reading between the lines. I don’t know. What I do know are the graphics and if you have looked at them you can see a fair amount of red directly ahead. Good luck.
Justification of Positions:
I have two positions. They are short positions (puts) for IWM and QQQQ. Unfortunately, the QQQQ reversal faked me (and the model) out and it just avoided my leveraging. At this point, my position is worth very little. Thus, I will keep it for now, especially since NDX is about to reverse to the down side. My other position is well leveraged and while I am on the wrong side, IWM is about to reverse to the down side (in 2 days). So I will hold my short positions and take it one day at a time. Stay tuned.
My Comments after Friday (July 13):
What do we do on Monday? That is the question to answer. All 3 indices are now pointing up while GOOG and AAPL are pointing down. What is interesting is AKAM. It is pointing up and it has been that way for a while, but in a couple of days it will reverse to the down side. When I look at AKAM, I note that it was correct in its own direction and that of the markets of late. It has reflected the markets better than the market indices (this week). Probably just luck?
Now let’s look at the indices. The most interesting is NDX. I got into the down side (with QQQQ) a few days ago. Meanwhile today the model took back those down days. So much so that the down move has disappeared. I unfortunately did not know this and averaged down on Thursday. Money under the bridge. So what is the story with NDX. Given the model’s revision, it went into an up trend on Wednesday, June 27 when it was around 1933. Today NDX closed at about 2032. So this has been one heck of an up move (about 100 points). If we look at next week we have a reversal coming up (tentatively in 3 days). The same is true of SPX and IWM. They too will reverse in the next couple of days. Will the indices continue to go up? I don’t think so. They have already moved up quite a bit. And then stocks like AAPL and GOOG are already pointing down and with AKAM set to do the same.
On a personal note, I have 2 positions. That in IWM is working out very well because I was able to leverage the position. My loser is QQQQ. There are 2 reasons that I can see for this. One is that I was unable to leverage my initial 20 contracts because my price was not triggered. The other reason is that I doubled up my position to 40 contracts. I brought my average price down to 46 cents. BUT it closed around 15 cents on Friday. Ouch. I give up on averaging. It is not suitable for the stuff I’m doing (short term trading).
So what about Monday? My plan at this time will be to hold onto IWM although I may decide to liquidate. I don’t know because it is well leveraged and my risk is small. I will hold QQQQ but I may jump out and take the lose. In addition I am looking to short AAPL via a credit call spread (July contracts).
Another interesting week is about to unfold. Last weekend I thought the same. However, what I thought would happen did not. The reality was that I was wrong – the model was wrong. The model has taken back its error and now acknowledged that the reversal to the down side a few days ago for QQQQ never happened. At this point I simply have to accept what has happened and make the best of it.
Justification of Positions:
I have two positions. They are short positions (puts) for IWM and QQQQ which the model on Friday put both indices pointing up. So as I go into Monday I am NOT aligned with the model. I need to consider this situation carefully on Monday. Stay tuned.
My Comments after Thursday (July 12):
Oh, what a ball game. Today was a great day if you are long. The Dow was up almost 300 – the best daily gain in 5 years. But, the model had all 3 indices pointing down as we went into today. So what happened? I don’t have a clue. You can’t always be right. On the flip side, a day like today shows how important strategy and money management are. That is what I am currently working on.
Let’s review where we stand. AAPL and GOOG both reversed to the down side today. AKAM continues to point up. With regards to the market indices, today’s action has made a mess of things. Maybe AAPL and GOOG are providing us a clue. I don’t know so let’s look at each issue individually. SPX reversed today and NDX and IWM can reverse to the upside tomorrow. So by the end of the day (Friday) we could have all 3 indices pointing up. Naturally, these reversals can be avoided by having the indices go down. I checked with the model and came up with the following. For SPX, which actually reversed today, the model will cancel the reversal if SPX goes down about 14 points on Friday. If we look at IWM, it closed today at 84.82. If on Friday it closes below 84.35, the impending reversal we see for Friday will be delayed. For NDX, the reversal can be delayed if NDX closes below 2005. Today, it closed at 2021.
So what will happen on Friday? It’s anybody’s guess. I am short IWM and QQQQ. Both are pointing down going into Friday. Where they will stand at the close is unknown. I will do whatever is called for by Monday morning. Good luck to all.
Justification of Positions:
I have two positions. They are short positions (puts) for IWM and QQQQ which are now both pointing down. So I am aligned with the model at least until the close on Friday.
My Comments after Wednesday (July 11):
Little has changed today. The only change is that GOOG which was looking to reverse today has had the reversal delayed until tomorrow (Thursday). Let’s see what tomorrow will bring.
Justification of Positions:
I have two positions. They are short positions (puts) for IWM and QQQQ which are now both pointing down. So I am aligned with the model.
My Comments after Tuesday (July 10):
Today marked my new beginning. Read below to find out why. What happened today on the markets the model was seeing for the past few days – not the magnitudes but the trends. I read something someone wrote today (this morning) about the model being wrong about AAPL because AAPL was up something like 3 dollars. The model was not wrong. I hate it when the facts get distorted. The reversal today was for the markets and AKAM. GOOG and AAPL were to follow one day later. There is no fudging the results. They are there for all to see. Let’s wait for the model to actually be wrong to criticize it. Other comments I see are how can the model know what will happen. It doesn’t, it follows trends and the trends are set by ‘those in the know’ and are reflected in the data that I use. Why is it that the model had 5 out of 6 issues reversing to the down and had AKAM reversing to the up. What the heck did it know? I’ll be honest – I don’t know. BUT, it is way beyond what I can do. That’s what happens when you couple engineering and a computer. As a final point, I don’t know where I will be at tomorrow, but one thing is certain – I will follow the model. Period.
The following is an email I received today. Thanks very much J. You made my day. And yes I did get over the 5K mark at the close. So July 11’07 marks the restart of My Journey. What I will do in the future will depend on a number of factors. At this time I am focusing on the ‘math’ behind the trading of options (i.e. the strategies to use). I guess you realize that when you follow 6 issues, the odds of getting all six directions ‘right’ on any given day are 26 = 64 to 1. So if we take a day like a couple of days ago when 5 issues were up and AKAM was done. The model nailed it. The odds of doing that are 64 to 1. Then we have a reversal. The markets go to the down side (today), AKAM goes to the up side and AAPL and GOOG remain up. Well that is another 64 to 1 odds to get that right. When you assess the odds you find that the model is doing very well. Remember the odds are 64 to 1 for one day but if you consider 2 days in a row (with all moves correct) the odds are 64 times 64 which becomes 4096 to 1.
Well I have to hand it to you, I was a believer in your model from day one but after today I have really seen the power of it. I consider myself lucky to have found your website and I applaud you for your work. I think you have achieved something great and I am looking forward to what the future holds. I did some calculations and checked some of the options quotes and as of 3:15 I think you are back to and over 5k. I totally agree with keeping the old model, as the old saying goes "if it ain't broke don't fix it." I do have a question if you do reach your goal or come close (which I am sure you will with no problem) do you think you will stay on as a professor or will you trade options as a profession? Anyway I am sure you are busy, but once again from someone just starting out in the "real world" of investing I thank you for being a source of consistent and reliable information.
Justification of Positions:
I have two positions. They are short positions (puts) for IWM and QQQQ which are both pointing down. So I am aligned with the model.
My Comments after Monday (July 9):
All 6 issues are about to reverse in the next two days. We have the markets set to reverse to the down side tomorrow (Tuesday) morning. Meanwhile we have AKAM reversing tomorrow morning to the up side. GOOG and AAPL reverse to the down side the next day (i.e. Wednesday). It will be interesting to see what will happen.
On a personal note, I bought puts in QQQQ and IWM on Monday afternoon. This was in anticipation of the reversal that we have been seeing for the last few days.
Justification of Positions:
I have two positions. They are short positions (puts) for IWM and QQQQ which are set to reverse tomorrow (Tuesday) morning. So I am aligned with the model.
My Comments after Friday (July 6):
This past week went according to the script. The model had the indices in up mode and they went up. It had GOOG and AAPL in up mode and they went up. And it had AKAM in down mode and it went down. I’m not surprised at what the model can do. I’m in the hole not because of the model but because of me (I simply did not listen to it and I paid the price). But those days are behind me (I hope).
I know that those who have been keeping track of the model’s performance know that it has done well. I am pleased. I have stopped looking to improve it. I have stopped second guessing it. Someone asked me recently my view about reaching the 1 million mark (from 5K). I am convinced, more than ever, that I can do it (which then implies you can too). At this time I am developing an investment strategy that should make it easier to follow the model. It looks exciting but for now I will not disclose what it is. Maybe sometime in the future.
Now, what about the upcoming week. Well, it appears that the up trend will be put on hold for a while. We are about to enter a short term down trend. Incidentally, if this happens, a lot will be taken back from July call options. At this time, the markets will reverse on Tuesday (look at the graphics). And then on Wednesday, AAPL and GOOG will join the down trend. The other issue I follow is AKAM and it will shift from a down trend to an up trend on Tuesday. For the last while AKAM has been out of step. Maybe money is shifting between AKAM and (AAPL and GOOG). Consider the scenario whereby AKAM is sold to buy AAPL and then AAPL is sold to buy AKAM. I do not have a clue as to whether this is the case. All I know is what the model tells me. Good luck to all.
Justification of Positions:
I have no positions. I am waiting for the reversals (in the indices) that are about to take hold. For the foreseeable future, I will only invest in the 3 indices I follow. I will leave AAPL, GOOG and AKAM to you guys. Good luck.
My Comments after Thursday (July 5):
All 6 issues are about to reverse in the next couple of days. We have the markets set to reverse to the down side on Tuesday. They will be followed on Wednesday by AAPL and GOOG. So these 5 issues that are now pointing up will all be pointing down shortly. The last issue, AKAM, has been pointing down for a while (against the trend of all the others). And on Monday, it will reverse to the up side and thus continue to go against the trend of the others. Now isn’t life interesting.
Next week will really be exciting giving the forecast. I have a special note to those that hold July call options on the indices or AAPL or GOOG. Consider taking your profits next week, because if the model is right you will stand to lose a chunk of your gains. The decision is yours. And for those who feel that mathematically modeling the markets is a waste of time – a bunch of hot air, I suggest you hold on to your calls, follow your instincts. But, I will be on the short side when the model reverses. Stay tuned, the fun is about to begin.
Justification of Positions:
I have no positions and I do not plan to initiate new ones this week. I will wait for the reversals that are forecast for next week.
My Comments after Tuesday (July 3):
Today, I noted a large increase in visits to this web site. It stemmed from the fact that several individuals on the AAPL discussion board (Google) mentioned me and my ‘failure’ to paraphrase them. While I appreciate their mention, I would like to tell them that their reports of my demise are premature. In fact, given what I have gone through in the past year, I am confident that I can reach my objective. It will simply take a bit longer (I am estimating an additional 6 months). My plan is now to be at 20K on Nov. 1 which is the one year anniversary of the start of My Journey. If I can do that, I will be 6 months behind. Given that I am currently at 3.8K, a move back to 20K in 4 months will certainly be a morale booster. I plan to review the postings that have been made about me on these boards in the past months and go back to the boards and remind those that made them and those who read them that ‘subject to change without notice’ also applies to my trading.
Now to the markets. There is a reversal to the down side for all 3 indices early next week (Tuesday). In addition, there is a reversal to the down side for AAPL and GOOG on Wednesday. And finally, our straggler, AKAM, is looking to reverse to the up side next week. It has been stuck in a down trend while the markets (and AAPL and GOOG) have been moving up. Now the tables will turn, AKAM reverses to the up while the rest reverse to the down. What an interesting line up. I am really looking forward to the coming week. Stay tuned.
Justification of Positions:
I have no positions and I do not plan to initiate new ones this week. I will wait for the reversals that are forecast for next week.
My Comments after Monday (July 2):
Today, I abandoned my search for a ‘new’ model. I am sticking with the original model which has served me so well for the past year. So there is now only one graphic. I look forward to the coming months to show what can be done when one is focused. Stay tuned. It will be interesting.
With regards to the markets, all 3 indices continue to point up for the next few days. AAPL and GOOG both continue to point up. The only hold out is AKAM which has been pointing down for a while. But we can now see a reversal for AKAM in about a week. Stay tuned and good luck.
Justification of Positions:
I have no positions and I do not plan to initiate new ones this week.
My Comments after Friday (June 29):
As I was about to write this piece, I scrolled down this page to find out how far my postings on this page go back. Well, they go back to March 1 or so and in reading some of the text I found that I was at 26K at one time (of course, I remember that). Anyway, on Friday I closed at 3.8K. I was up at 4.6K but then there was a major selloff. I had not been following the market. I just wanted to sell my positions because a turnaround was about to take hold. Well, I was caught in the gyrations. Anyway, such is life. I went into the weekend with no positions. I continue to follow the ‘new’ model. Remember, I use the word ’new’ not because it is truly new, but because of the way I interpret the results.
Now let’s look at the markets. We now have all 3 indices flipping over to the down side. The original model has them reversing later on. So this will be an interesting week. It will help me formulate my views on the models. Remember, I am trying to decide which model will be the trading tool for My Journey that will restart when I get back to 5K. There are several significant differences between the 2 models. The original model combines 2 models (intra-day and daily) to generate the results. The net effect is that the length of a trade is longer than that generated by the ‘new’ model. As I said the new model is not new. It is, simply put, only an intra-day model with 4 slices. The original model uses an intra-day 3 slice model instead. Because the new model does not couple 2 models, it generates more trades of shorter duration. The more I focus on the new model, the more I am realizing that it is what I am looking for. I hope that I can reach the conclusion that ‘it is it’. I have decided that I will not hold any positions this week. I want to see how the 2 models do. Some have asked me how I feel about my future in the options ‘game’. I am truly optimistic. Remember, I have gone fill circle. I have experienced a lot. I am definitely a better trader as a result. And I aim to prove it. The original model was fine. All I want to know is whether I can use the ‘new’ model instead. Because if I can, there will be little that will stop me on My Journey.
So we have the 3 market indices about to point down. AKAM just reversed to the down side. APPL will reverse in a couple of days. And finally, GOOG is moving to its own rhythm. It will reverse to the up side instead. Good luck to all.
Justification of Positions:
I was long QQQQ and IWM with calls but near the close on Friday I liquidated them (in response to the new model). I now hold no position.
My Comments after Thursday (June 28):
I am tired. Updating all these pages and graphics takes a fair amount of work. If you have comments or views that I should be considering, I would enjoy hearing from you. With regards to the models, we are quickly approaching several critical points. The original model has the indices reversing to the down side near the end of the week while the new model is looking at the beginning of the week. With regards to the stocks, both models agree on AAPL – it is in an up trend.
For GOOG and AKAM we have the 2 models pointing in opposite directions. I would really like to see the new model become the norm. Today, it outperformed the original model for AKAM and GOOG. But before pronouncing myself, I want to be sure. I do not want another flip-flop on my hands. Let’s see where all this will go. Good luck to all.
Justification of Positions:
I am long QQQQ and IWM with calls. Thus, I am aligned with the new model and the original model.
My Comments after Wednesday (June 27):
What a difference a day makes. Yesterday, I was complaining (quite vigorously) about the ‘new’ model. I swore I would scrap it. Well, given today’s action, I’m not sure I would want to do so at this point. I guess I was ticked off yesterday because I felt it had let me down. But today I feel quite different, so much so that I wish I could take back yesterday’s comments. Naturally, if one can use the ‘new’ model, it has its advantages. So the question is: “Does it have the accuracy and the agility?” I don’t have the answer – yet. All I can say is that the old model has performed very well over a long time frame. I cannot check the new model. I don’t have the past data. So all I can do is test it in real time.
That’s where my problem started because in real time it put a buy on the market indices on Monday. Meanwhile, the old model was holding off on the buy. When one factors in today’s action, the ‘new’ model comes out ahead for this week. So for the indices the new model has done well.
What about the 3 stocks? Let’s start with AAPL. The new model is a bit ahead in timing the reversal to the up side that took place today. If we now consider AKAM, we have that the new model has AKAM moving up, although a reversal is rapidly approaching. Meanwhile, the old model has AKAM stuck in a down trend. And finally we have GOOG, which incidentally triggered my reassessment of the model. The old model has GOOG pointing up. But the new model has had GOOG on the down side for the last couple of days. After seeing what happened today, that was a pretty good move. Maybe tomorrow I will say the opposite, but for now I must say that I liked what I saw today from the ‘new’ model. Obviously, we need to see more data.
But, for now, I will remain with the new model. I really hope that it will convince me that it is the one to follow. Good luck to all.
Justification of Positions:
I am long QQQQ and IWM with calls. Thus, I am aligned with the new model and the original model.
My Comments after Tuesday (June 26):
Today, was another one of those eye openers. When I look back at what I did with the introduction of the ‘new’ model, I feel ‘sick’. In reality, I had tested something like this about a year ago. I abandoned it then and my feeling today is that I should not have brought it up again. I did so out of frustration with the back dating. Well guess what, the Second Law of Thermodynamics says there is no free lunch. And I thought there would be. Naive on my part.
The ‘old’ (original) model has worked well for the last year. It is obvious that I should leave it alone, accept it for what it is and get down to the business of following what it says. I need to accept the back dating for what it is – a fine tuning strategy on the part of the model. Whatever dislocations the back dating causes have to be treated as a fact of life. That’s the way it has to be.
In hindsight, there is no way the ‘new’ model can compete with the old one. Case closed. Now let’s look at the markets. Well, the model (and when I talk about the model, I am referring to the established ‘old’ version), has had the 3 indices on the down side. Today, IWM looked like it might reverse but it did not. However, IWM is set to reverse on Wednesday. With regards to NDX and SPX, they are looking to reverse by week’s end.
Now let’s look at the stocks. Let’s start with AAPL. Both models had it pointing down. And today it was down. However, a reversal (old model) is set to occur on Thursday. How close can one cut the iphone deal.
GOOG has been an interesting stock. I was disappointed when the model back dated a reversal to the up side. I will share a secret with you: The Model Knows Best. And, of course, you realize I am talking about the original model. In fact, today may be the last time I will post the new one. Because, the more I think of it, the more I feel it is an embarrassment. The last stock is AKAM. The old model has it in a down trend. The new model has it pointing up. Like I said, forget the new one – the old one is the way to go. At this time, I want to apologize to all who have been subjected to this fiasco. From now on, it will be the old model and the indices for me. Now, what I need to do is to formulate an investment strategy to use with the model’s analyses. Good luck to all.
Justification of Positions:
Today, I was long QQQQ and IWM with calls. I was following the ‘new’ model. Ouch. I now will be following the ‘original’ model which has both QQQQ and IWM pointing down. BUT, on Wednesday (tomorrow) IWM should reverse to the up side. That would then have me aligned. And QQQQ (as NDX) should reverse on Thursday. So I will hold both long positions. My QQQQ position is only worth about $800 so it is not major, but nonetheless, I want to be aligned with the original model. I hope I can get through this ‘ordeal’ in a reasonable manner.
My Comments after Monday (June 25):
Today, I took the day off. I watched the markets for a good part of the day and what a day it was. The market was up, then the market was down and then it closed a little below even. It is tough to do well under the circumstances. At this time the 3 indices are pointing up and so is AKAM (according to the ‘new’ model). AAPL is pointing down but for one more day and GOOG is pointing up but will reverse to the down side on Tuesday morning. So GOOG and AAPL will go in opposite directions. What I have written is based on the ‘new’ model. The details for the ‘old’ model can be found on page 4 of this site.
Justification of Positions:
On Monday morning I sold my long call position in AAPL. In the afternoon, I went long QQQQ and IWM with calls. Thus, I am aligned with the new model.
My Comments after Friday (June 22):
If you not noticed, I posted a message on the main page that you should read. It details the direction for the model and for my trading that I am planning in the coming days. I am trying to get back on track. I need to be comfortable to succeed. With the way things are going, I am not comfortable. I now have enough experience to know that success requires a ‘happy trader’ – to put it bluntly. There is ‘something’ I am not doing right. I am trying to figure out what it is.
You will note on Page 6 of the site, I have generated a ‘new’ graphic from the model. This is more straight forward and easier to use. It is also for shorter term trading. Just for your info, if one could make a 10% gain in a week and do so for 50 weeks in a row, a $1,000 investment would be worth $117,000. That really says something. So if one buys an option at $2.00, and one can sell it a week later at $2.25, that would be the formula for making 10% (plus commissions) that would enable one to achieve the million marker very quickly.
I have to go back to around the time I started My Journey and think to what some people were telling me. They said to paraphrase, you should be buying options (forget spreads etc..) if you think the model is good. My thinking is coming around to this view. In addition, I am also focusing on short term trading (say a week). If I can regain my footing and become comfortable with what I am doing, I will climb this mountain.
Justification of Positions:
I have said a lot this weekend. I have also done a lot of homework. On Monday I will close out my position in AAPL. One reason is that I will invest only in the indices for the coming months. The other is to re-align with the ‘new’ model. I then plan to go long QQQQ and IWM. They are both set to turn Monday morning (barring a sudden down draft). I will check the model at 12 pm to confirm the reversal. And, given that the model will not take the reversal back (it can generate a new one but it cannot take a past reversal back), I will enter into the long position when the model reverses. As I have stated, I must remain aligned with the model (irrespective of the version).
My Comments after Thursday (June 21):
What a difference a day makes. When we look at today’s analysis (as generated by the model) of the markets we now have the 3 indices reversing to the up side on Monday or Tuesday. Then on Wed we see GOOG is set to reverse to the up side. AAPL is already pointing up and it will continue to do so for a while. The lone red box I highlighted yesterday in AAPL’s graphic is gone. All systems are go for AAPL. The last issue, AKAM, continues to point down. But sooner or later it will reverse – the question is when.
With regards to the model, I have told you on occasion that the 3 past days are subject to change by the model. This means, simply put, that red daily boxes can become green and vice versa. Even though there is little one can do when the model places a reversal ‘in the past’ (or if you like after the fact), it is important to note when the reversal took place. I use it as an indication of how a move is going. Sometimes, one can gauge whether or not one should go into a move by looking at how much has already been accomplished.
The back dating of moves is equivalent to someone saying ‘I should have sold yesterday’ or ‘I should have bought 2 days ago’. We know it didn’t happen so what’s the point. Well, the point is that by using the model generated starting points and given that 9 out 10 moves are winners, one can use this information to one’s advantage.
On a lighter note, I would like to thank those who write to me. Each one of your messages is appreciated. And finally a few words about the model. As you may imagine, most of the messages relate to the model. I am impressed at how it is performing. Often I look at the results and wonder how it can generate a certain forecast. It is a year that I have been running the model every day. While my personal performance has had its ups and downs, I am thrilled to be able to conclude that it was my fault and not the model. I thank the Holy Spirit for the guidance and enlightenment and I hope that I will not squander the opportunities I have been given. Good luck to all.
Justification of Positions:
On Monday I opened up a short position in GOOG. On Wednesday, I closed that short to pursue a long position in AAPL. So at the close on Wednesday, I was long AAPL. On Thursday I remained in APPL and plan to continue to do so. The model has AAPL pointing up at this time.
My Comments after Wednesday (June 20):
What can I say. The Dow was down 146 points. Around 2 pm all hell broke lose. On a personal note, I am trying to ‘find myself’. I am trying to get back on track. At lunch, I reviewed what I had done on Monday (short GOOG) and decided that what I really wanted was to be long AAPL. Given AAPL’s recent drop, I decided I would go for it. So just before 2 pm I closed out my GOOG position (and I made a mistake entering the price – ouch) and then went long AAPL with a debit call spread. On a side note, I have decided to only focus on calls and to use credit and debit call spreads to align with up or down trends. Needless to say, I took another lose. Such is life.
Let’s get back to the markets. Today’s drop has cleansed the markets. All 3 indices are now aligned and they reversed to the down side today. But what is exciting is that they will all reverse back to the up in a couple of days. So this is not a real down trend. It is only a down draft at this stage. With regards to AAPL, it threw a curve ball. There is one red daily box (in 2 days) which can cause a reversal. But even if that happened there is another reversal a few days later. Now if AAPL goes up on Thursday (and Friday) that lone red box will disappear and AAPL will continue in its up trend. Good luck to all.
Justification of Positions:
On Monday I opened up a short position in GOOG. On Wednesday, I closed that short to pursue a long position in AAPL. So at the close on Wednesday, I am long AAPL. The model has AAPL pointing up at this time.
My Comments after Tuesday (June 19):
Not much to report on Tuesday. There is some divergence in the indices. Let’s see if tomorrow’s data will help clarify the situation. There were no changes today. One thing I can report is that AAPL had a reversal on the horizon (yesterday). It is now gone. So AAPL will continue to point up for a while. Good luck to all.
Justification of Positions:
On Monday I opened up a short position in GOOG. The model has GOOG pointing down. On Tuesday, I maintained the short position.
My Comments after Monday (June 18):
Stocks go up and stocks go down. Look at AAPL. Last week it was ‘hammered’. I had gone short last Monday morning and my position was closed out on Friday. The model was looking for a reversal to the upside (this morning). By the time I got my act together, AAPL was up $4. So, I did not go long AAPL. Hey, that’s OK because we now have a reversal to the down side showing up on the radar screen. One thing I can say is that I am pleased with what the model is doing with AAPL.
So what did I do today. Well, I noticed that GOOG was flying high. I looked at its data and found that it should not be going up. So I shorted GOOG with a credit call spread. I shorted the July 520 and bought the July 530 for a credit of $3.95. I am following the model.
The 3rd issue, AKAM, was to reverse last Friday but when the model analyzed Friday’s data, it put off the reversal. Well today it said putting off the reversal on Friday was a mistake and it put the reversal back to Friday. Incidentally, the model did something similar with AAPL. It put the reversal on Thursday. Yes, we thought Monday morning was the time, but given the data, it moved it to Thursday.
With regards to the 3 indices, they are pointing up but 2 of them (NDX and IWM) can reverse to the down side in a couple of days. The hold out is SPX. However, if the markets start to drop, SPX will fall in line. At this time, I don’t even want to guess. I have learned to play each issue on an individual basis according to the model. Good luck.
Justification of Positions:
On Monday I opened up a short position in GOOG. The model has GOOG pointing down.
My Comments after Friday (June 15):
Friday was another strong day. There is little to say. The indices continue to point up. Even AKAM which could have reversed on Friday, did not. It had a nice up day. That caused the model to delay the reversal until Wednesday. So AKAM continues to point up. And AAPL is set to reverse on Monday. For the model to delay the reversal, AAPL would need to close below 117.2 which is unlikely. I plan to go long AAPL on Monday according to the model. The only issue that is negative is GOOG and it has been that way for a while. Good luck.
Justification of Positions:
Going into the weekend I have no positions.
My Comments after Thursday (June 14):
As we went into Thursday, the 3 indices (SPX, NDX and IWM) were pointing up. Incidentally, for those who may not know, NDX is the cash index on which the QQQQ is based on. And, SPY is based on SPX. At this time, they seem to be locked into up trends. NDX may reverse later next week but that move looks tentative and if it happens would only last a couple of days.
So we are left with 3 stocks. GOOG is the opposite of the markets. It continues to point down. Next we have AKAM. It has been pointing up for a while but tomorrow (Friday) it may reverse and start pointing down. And finally to make life exciting, we have AAPL which has been pointing down but it now looks to Monday to reverse to the up side. As it reverses, AAPL will align itself with the markets. So we have some interesting action on the horizon.
On Friday my options will expire and I will be set to take on new positions. At this time I am looking at going long AAPL and of shorting AKAM. Now isn’t that a strategy to behold. Stay tuned.
Justification of Positions:
I am now short AAPL with a credit call spread. AAPL is in a down trend. My options position is based on June options and which expire tomorrow.
My Comments after Wednesday (June 13):
What a day. The market took off like a rocket. All 3 indices are now pointing up and so is AKAM. However, AAPL and GOOG continue to point down. I am now focused on AAPL. I am short AAPL until Friday when the options expire. AAPL is looking to reverse to the up side on Monday. I will be watching to get in. I may also consider going short AKAM to balance my positions. Stay tuned.
Justification of Positions:
I am now short AAPL with a credit call spread. AAPL is in a down trend. My options position is based on June options and thus expires on Friday.
My Comments after Tuesday (June 12):
What we are seeing is a correction which has about another week or so of life in it. At this point, the indices and GOOG and AAPL are pointing down. AKAM is pointing up but about to reverse to the down side. That’s the way it is today. What is exciting is what I am starting to see for the later half of next week. There is a reversal for all the issues that is forming on the horizon. It covers both AAPL and GOOG.
The implications are that what we are now seeing is a correction that is consuming itself. Next week should be a whole new ball game. I know there is a lot of interest in AAPL and a lot of concern about its current drop. All I can say is stay tuned because there are some interesting things that are about to happen. Good luck to all.
Justification of Positions:
I am now short AAPL with a credit call spread. AAPL is in a down trend. My options position is based on June options and thus expires on Friday. I will take it one day at a time.
My Comments after Monday (June 11):
Monday wasn’t much of a day except if you were focused on AAPL. What a ride. Before I continue, let me respond to someone who wrote me today to tell me he was shocked because I closed out my AAPL puts on Friday. Well, I had little choice (they were $10 out of the money) but I was paying attention to the model. So much so that I took some of the proceeds and shorted AAPL this morning with a bearish, credit call spread. I sold the June 125 call and bought the June 130 call for a credit of $1.75. Yes, that turned out to be a nice move. Like I’ve said, I am here to follow the model. Case closed. I am not capable of making my own decisions. Whenever I try doing that – guess what happens. I hope that in the future I will get more emails asking questions like “What the heck are you doing?” or “Didn’t the model say to sell – why didn’t you?” or “I am shocked!”. From now on, every move I make I will justify in accordance with the model. My aim is to keep the human element out of the investment arena.
Now to the markets. At this time, we have a mixed bag. Some issues are up and some are down. When I look at the market indices I can see the down trend reshaping itself at the beginning of next week. For now the direction seems to be up. For GOOG and AAPL, the direction is now down. For AKAM the near term direction is up but it, like the markets, is looking to reverse to the down side early next week. Good luck.
Justification of Positions:
I am now short AAPL with a credit call spread. AAPL is in a down trend. My options position is based on June options and thus expires on Friday. I will take it one day at a time.
My Comments after Friday (June 8):
On a personal note, I closed out my remaining positions on Friday and ended with $2.8K. Such is life. Obviously, I have regrets but there is a reason for everything that happens. Being in research, I am used to ‘failing’. It is what you learn in the process that is important. My mission is to get back in the game. My sole criterion for investing (on this web site) is my model – no news – no earnings – no rumors – no hear say – nothing, except the model’s output. Second guessing cannot form the basis for my investment decisions. Thus, from now on all my trades must be justified relative to the model.
With regards to the results of the model as of Friday, we have a confused situation. Going into Monday, all 3 indices are pointing down. Let’s see Monday’s results to determine where the markets are going. AKAM had a great day on Friday. The model used the opportunity to reverse AKAM to the up side. However, it is worth noting that this up move looks weak with a reversal to the down side already visible. With the other 2 issues, we have GOOG which remains on the down side and we now have AAPL looking to reverse to the down side on Monday. I am planning a trade for Monday. Stay tuned.
Justification of Positions:
I closed out my remaining positions on Friday.
My Comments after Thursday (June 7):
What a day. Remember, we went into Thursday with 5 issues pointing down and one pointing up. You guessed it, 5 were down and the lone hold out, AAPL, which is still pointing up was up. I am proud of the model and what it is able to do. However, I am disappointed with myself because I strayed from it and ended up in an unpleasant situation. I hope I have learned enough to allow me to succeed in my future endeavors.
Justification of Positions:
Today, only a portion of my short position in AAPL was closed out (partial fill). I was left with a small position that I will close out tomorrow. This position is not aligned with the model and will be dealt with.
My Comments after Wednesday (June 6):
Today, we saw the SPX and NDX join IWM to the down side. We also had GOOG (join AKAM) reverse to the down side. The hold out was AAPL. However, it can reverse tomorrow (Thurs) if it is down to 122.6. This time I think it will do it. At this point I am concerned about the markets. The indices have just reversed so there is some potential down action that can still happen. In addition, I am concerned about SPX. It is showing a divergence from the other 2 indices. However, if it is down ‘substantially’ it will realign. So I think we are in for some downward pressure for the next few days.
I won’t bore you with my situation except to state that I am now at $2.7K. The clock is ticking fast. I am just waiting for the other shoe to fall. Both AAPL and GOOG have done me in but there is the model that’s now telling me “You blew it but hold onto the shorts. Things could get ugly.” Now is it really the model saying that or is it me voicing some wishful thinking. I guess the answer is a bit of both. Let’s see what tomorrow will bring. Stay tuned.
My Comments after Tuesday (June 5):
Today we had IWM join AKAM to the down side. Of the remaining 4 issues, we have GOOG and SPX that should reverse to the down side tomorrow (Wed.). And then we have NDX that can reverse tomorrow if it is down about 4 points. Otherwise, it is looking at Thursday. Finally, we have AAPL. The model has pushed its reversal forward to Monday. However, that is deceptive because if AAPL is down to 122.4 on Wed, the model will flip it to the down side. Now mind you it needs to go down 30 cents to do that and I have found out the hard way, it is easier said than done.
On a personal note, I’ve been taken to the cleaners. If only I had listen to the model. God gave me the insight to create it and I’ve squandered the opportunity. I hope that the Holy Spirit will instill in me the inspiration and guidance that I will need to get out of the predicament I am in. Today, I received a ‘beautiful’ note from a reader. He is a recent college grad who is looking at real estate and the options markets. Thanks again. Your words are deeply appreciated. Good luck to all.
My Comments after Monday (June 4):
The model went into Monday with AKAM pointing down and the other 5 issues pointing up. However, all 5 were only several days away from reversing. The one that could have reversed on Monday was GOOG but it made a strong up move with the result that the model delayed the reversal for GOOG until tomorrow (Tuesday).
So we are on the verge of a reversal to the down side in the markets. On a personal level, I need some relief – my account is at $6K – ouch. But, I cannot complain. What I’ve done has been of my doing. The responsibility is mine. The model has done well and for that I am grateful. Let’s see if the model can nail this move. Stay tuned and good luck.
My Comments after Friday (June 1):
If you look at my options trading account you will find that I have been ‘slammed’. But, I am not about to give up – not just yet. I have taken the opportunity to fight back. I am used to this. When you carry out research, you learn a lot more when things go wrong than when they go right. Well things went bad for me and I learned a number of things. Now mind you, it had nothing to do with the model – it was ‘great’. The problem was me. Successful trading takes skill. And my skill is getting better but I need to do more work to get it up to snuff. Stay tuned because I am going to do it.
Now, what about the markets. Take a look at the graphics. I have made a significant change to them. I am thrilled with the changes. At this time all the 6 issues are on their way to reversing to the down side. This will be an interesting week. I will make every effort to update this site every day. So bear with me. Let’s see if we (or should I say I) can get back on track.
Let me say a few words about the model and, in fact, the presentation of the results that it generates. I have changed the view from 7 forward days and zero backward looking days. I now have 5 forward looking days and 5 backward looking days. So when you (and I) are trying to figure out what is going on, it makes sense to put ourselves in the ‘middle’ of the data and not at the edge. Research is about constant improvement and that is what I am trying to do. However, a good idea only comes about once in a while. This, I think, was one of those good ideas (even if it looks obvious). With regards to the model, I am pleased with its performance. I have stuck with it from the time I started on Nov. 1’06. It has passed the test of time. I don’t think I can do better (even though I do look for improvements).
As a final word I would like you to look at the MarketWatch web site. For the last few weeks (on the weekends) they have been telling us how the markets would go down in the following week. Now I noted today that they said the “Stage is set this week for a rally to continue building on new highs in Dow and S&P500…”. I bring this up because this is not what the model is saying for the coming week. There is never a dull moment. Stay tuned.
My Comments after Friday (May 25):
Tuesday will be an interesting day. We have the 3 indices set to reverse on Tues, Wed and Thurs. In addition we have AAPL set to reverse on Thursday. All these upcoming reversals are to the up side. BUT, all 4 of these reversals can be put on hold if the markets go down a bit. So they are tentative. There is too much indecision in the markets. We will need to see how Tuesday unfolds. If the markets are up on Tuesday, then I would conclude that the reversal to the up side is ‘real’. If Tuesday is a down day, then the reversals are pushed back. This is a time when we need to look at each individual day. It is not clear where we will go. For now we have 5 out of 6 issues pointing down. Only GOOG is pointing up and it is 3 days from reversing to the down side. A down draft during the next few days and we could end up with all 6 issues pointing down. However, a move to the up side in the next couple of days and we could have 5 out of 6 pointing up. So at this time, I cannot speculate where the markets are headed.
If you have looked at my account you will see I am worth $12K (it was not long ago that I was worth $20K). AAPL has been in part responsible for my ‘demise’. At this time, I have 24 puts on AAPL. I have added to my position on several occasions to average down. And then Friday came along and AAPL was up $3. That hurt. But AAPL remains on the down side – for now anyway. I am watching it closely and will have to pull the plug if the model reverses it. The model has done well with GOOG. It maintained an up trend and GOOG was up. For AAPL there simply is too much hype. But that is just an excuse – AAPL should be moving down. Let’s see what it does on Tuesday.
My Comments after Thursday (May 24):
Wow. Today was interesting. Not because of the drop. No, it was interesting because we had all 3 indices reverse to the down side. BUT, next week all three will reverse back to the up side. So this drop is more like turbulence. By the end of next week we could have most of the issues pointing up. At the close today 5 out of 6 issues (GOOG the exception) were pointing down. It is also worth noting that AAPL has re-aligned itself with the markets. Next week it reverses to the up side. For the last couple of weeks, there was uncertainty – a lack of clarity in the markets. It now looks like this will soon change. Stay tuned.
My Comments after Wednesday (May 23):
For AAPL the blue arrow appeared today at mid day. I will take up short positions in SPX and IWM as they reverse. SPX is set to reverse on Friday and IWM on Tuesday. With regards to the model, little has changed. AKAM has reversed to the down side. SPX and IWM are about to reverse to the down side and, of course, AAPL is already pointing down. So let’s see where we end up.
My Comments after Tuesday (May 22):
Yesterday I followed the model, however, I have realized that I have the ‘blue arrows’ that I should be using. They can be used to increase positions at ‘strategic’ times. An example is AAPL. The model has a strategic entry point (to the short side) set for tomorrow (Wed). I jumped the gun a bit because I had not realized this feature of the model. Anyway, this is just another learning experience.
With regards to the issues and the markets, little has changed from what I said yesterday. Do look at the graphics and note the blue arrows. They indicate strategic points that one can initiate a move or increase the position in a move. Good luck.
My Comments after Monday (May 21):
We are now starting to see reversals for SPX and IWM in 4 days or so. AAPL is pointing down and AKAM is about to reverse to the down side. That covers 4 issues. The remaining 2 are NDX and GOOG. We know that GOOG has been a laggard, so having it point up is acceptable. And finally the Nasdaq 100, its reversal is delayed but as it goes up the model brings the reversal closer. Anyway, enough speculation. The graphics speak for themselves.
Today, I took the model’s advice and shorted AAPL. I actually bought June 115 puts (they are in the money). This will be an interesting test. But, regardless of what happens, I know that I will not succeed if I don’t follow the model. And that’s what I did today.
My Comments after Friday (May 18):
I survived the May option expiry. I liquidated on Thursday and ended with $14K. I am grateful for seeing the light on Thursday. I learned one thing that I know I will have to adhere to if I am to succeed. That is I have to FOLLOW the model. I don’t know what happened to me. BUT it cannot happen again. This second guessing, the clutching at straws – that has to be history. I hope I will have the discipline in the future to overcome this problem.
With regards to the markets, 5 of the 6 issues are pointing up. AAPL is the only one pointing down. If you read the AAPL graphic you will see when the model actually pinned the sell on AAPL. I was surprised because I held a short from earlier on. Anyway, I am going to sit back a few days and clear my head. I need to get back on track. I think I can do it. The model did not fail me – I failed the model. Enough preaching – let’s get back on track. On another note, I used to be negative on options spreads. Well, I have come to realize that spreads and in the money calls and puts (especially on indices) are an excellent way to invest in options. Good luck to all.
My Comments after Friday (May 11):
It’s been a week since I wrote something on this page. I have been traveling and very busy. I continue to travel next week. In fact I am on planes on Monday and on Friday. It has been difficult to follow the markets and their behavior has not helped. On Thursday the Dow was down 150 points and then the next day it was up 110 points. AAPL which the model has pointing down (and it still does) exploded to 108. Confusion is the word. I really don’t know what to say because I feel I am in a pretty big hole and I am trying to use my engineering skills to get out. But so far no luck. Anyway, I don’t want to pollute this column with my thoughts because I hold shorts and I would suspect many of you are long. Monday will be a pivotal day. Go read what I wrote about the individual issues on the graphics page. Good luck to all. I will try to keep my chin up.
My Comments after Thursday (May 3):
Let me summarize what happened today according to the model. SPX and NDX remain on the down side. In addition, AAPL reversed today to the down side.
The other 3 issues are pointing up. We had GOOG reverse to the up side today. And so did IWM and so did AKAM. So we have 3 issues pointing up and 3 issues pointing down. As I’ve stated the last few days, this is a confusing situation. My account balance is showing the strain I’m under. Such is life.
My Comments after Wednesday (May 2):
Yesterday, I said that the markets would be confusing. Yes, they are quite something. Those that are long are smiling and rightfully so. However, the game is not over yet. What the model now has is SPX and NDX stuck in down mode. However, it has IWM looking to reverse tomorrow. BUT, if IWM is down tomorrow by about 0.8, the reversal is put on hold. I will share a concern I have. I don’t believe we can have the 3 indices with 2 pointing down and one pointing up. So, let me go out on the limb. IWM will go down tomorrow and Friday and thus realign with SPX and NDX to the down side. The bottom line is that given this situation, the markets will start moving lower tomorrow.
With regards to the 3 stocks, AAPL will reverse to the down side tomorrow (Thursday). I will short AAPL. AKAM will reverse to the upside and GOOG is looking to reverse to the upside early next week. Good luck.
My Comments after Tuesday (May 1):
At this point, the markets are confused. Overall, I don’t think there will be much progress either up or down. These are the situations I hate.
We have IWM, GOOG and AKAM about to reverse to the up side. Then we have AAPL about to reverse to the down side. And then we have SPX and NDX continuing to point down. I don’t know what to make of it besides to tell you not to expect much ‘net’ up or down. Stay tuned.
My Comments after Monday (April 30):
Wow. What a day. Today marks the 6 month point of ‘My Journey’. My objective was to be at $20K at this time. Given my short positions, today’s down draft in the markets brought me very close. In fact, I can ‘almost’ state that I am on track. A month ago I was ahead but then I had a setback. I have to learn to listen carefully to the model. Because, if there is one thing that I’ve learned in these 6 months, it is – when I did not listen – I lost. So one of my goals for the next 6 months is to pay close attention to the model.
Now let’s look at the markets. Things are taking quite a twist. If you look at the graphics, you find that GOOG, IWM and AKAM are set to reverse to the up side by the end of this week. Incidentally, GOOG reversed this morning as it started to pull back. It had been set for Wed morning but the model advanced it to today. What is interesting is that the model will reverse GOOG back to the up side in a few days (Thursday, tentatively).
We then have AAPL, SPX and NDX. At this time AAPL is the only issue of the 6 in an up trend and today it hung on and closed about even. But the model has it reversing to the down side on Thursday. So at that time we will have GOOG pointing up and AAPL down. They seem to be taking turns on who will lead. I wonder if there is something going on between them behind the scene.
The 2 market indices, SPX and NDX will continue to point down until the middle of next week when they are looking to reverse to the up side. So what does this all mean? First of all it does not mean that the markets are about to correct to any great extent. If IWM (Russell 2000) and GOOG and AKAM flip to the upside this week, they will pull the SPX and NDX to the upside a few days later. The bottom line is that today is not the start of a major correction. Note however that I say this after the close on Monday. The forecast is constantly being updated. This is like forecasting the weather. Updates are issued on a regular basis. I take the markets one day at a time.
On another note, I would like to thank a number of you for your kind words. I am grateful to a lady on the Yahoo AKAM board and an individual on the MacObserver Forum. I also want to thank another individual on the Google AAPL board. Seems like all 3 of these people posted the address of my site in their postings. You should understand that as an academic, I appreciate ‘my peers’ citing my work.
Finally, I want to thank all those who have sent me such terrific emails. While I may not have answered, you can bet I read them – multiple times. There is one individual from the Google GOOG board who sent me a message today. It contained the following: “…Have I told you...lately.....that I love you…”. You guys are great. Stay focused. Good luck to all.
My Comments after Friday (April 27):
We end this week with the Dow at an all time high. It has been an interesting week. On Friday, the model reversed to the down side both the S&P500 and the IWM. And, on Monday morning we will have the Nasdaq 100 also being reversed to the down side. At this time, I am short all 3 of them. The regular readers on this site know that the last few weeks have been difficult for me. I can honestly say that I have struggled. In hindsight my problem has been not listening to the model – I got ahead of myself and was second guessing it much too often. Last Nov. and Dec. the same thing happened – I went into second guessing mode and I did poorly then too. This time, I am resolved to put my emotions aside and strictly follow the model.
With regards to the other 3 stock issues, we have both AAPL and GOOG looking at the second half of next week to reverse to the down side. When they do, we will have 5 issues pointing down. I have saved some cash to get credit spreads at that time. The sixth issue is AKAM. It has been pointing down of late and it has taken a beating. The model had AKAM tagged correctly. Now, we are looking at AKAM reversing to the upside next week. So AKAM is out of step. This is a really interesting situation. On a personal note, I am pleased with the way the model handled AAPL and AKAM in the last couple of weeks. And the next couple of weeks should also be something to watch. Stay tuned.
Before closing, I would like to acknowledge that I have received a number of emails. I thank those who write. I am amazed at how most of you are so positive of what I am doing. One writer asked me how much time I devote to what I am doing. During the day, the only time I use is that to check the quotes. Normally, I spend little time. After all there is not much that really can be done. In the evening I spend a couple of hours running the model and updating the web site. And that is basically it. Someone else wrote about buying deep in the money options. As I said on another day, I considered that possibility and have in fact concluded that this approach is probably better than being in futures. Because, in the end if there is little time premium (which is typically the case for index options) buying an option is like buying a futures contract. There is one major advantage. The options are open ended on the profit side but close ended on the loss side. I certainly like this aspect. If this experiment works out, I will get out of my futures account. Another individual wrote to tell me how impressed he/she was with the model’s projections for AAPL and AKAM during earnings. He (I’ll assume it’s a guy) bought calls on AAPL and puts on AKAM when I had posted the reversals and did very well. Unfortunately, I did not do the same and did not do as well (actually I did ‘miserably’ – Ouch). I wish him continued success and I hope that next time I can also do as well. Good luck to all.
My Comments after Thursday (April 26):
Today, I was at home resting my knee. I may have torn something in there while running across the street. Ouch. I am in physical pain. I’m also in mental pain because of the markets – and more specifically how I have handled the markets of late. It has been tough.
I was rereading an email I received (from Sergio). It’s an excellent letter and I am trying to find the opportunity to post the contents on this site. He had some good ideas. One idea he brought up was to focus on the simple buying of options. Well, I had some time today and when I studied this idea I realized that for indices such as QQQQ and IWM there are options (puts at this time) that are not too expensive but are in the money and have little time premium (May series). So, given the reversal to the down side that is ‘coming’, I went and put $6K into puts for IWM and QQQQ. This is an interesting strategy that is worth noting. I’m not giving up on credit spreads but I also want to explore simply buying ‘deep’ in the money options.
Now to the markets. Two of the 3 indices (SPX and IWM) reverse to the down side on Friday (the 26th). NDX reverses to the down side on Monday. If we look at the 3 stocks, we have AAPL and GOOG on the up side until late next week when both will reverse to the downside. During this time, we have AKAM pointing down. However, AKAM is looking to the up side next Thursday when AAPL and GOOG look at the down slope. Now isn’t life interesting. Remember, your comments are always welcome.
My Comments after Wednesday (April 25):
What a day! The Dow crushes 13K. Earnings had AAPL shoot up and AKAM take a beating. Oh, what a life. Let’s get back on track and if you are (on track) then let me get back on track. Going into today, I had 3 short positions. I was short GOOG. When I saw how things were going today, I liquidated my short in GOOG because it is reversing. That leaves IWM and SPX. Well, my IWM short was premature because IWM is to reverse only on Friday. I had jumped the gun. That leaves SPX. On Tuesday, I shorted SPY (or if you like SPX). I did so because the model had reversed SPX. However, with today’s data the model reassessed the data for SPX – it always goes back 2 days and low and behold, the reversal in SPX at the close on Monday was a fake out. The daily boxes were made green and the reversal disappeared – it never happened. It was a ‘mistake’. Such is life. I had shorted SPY and I got caught. I guess, in hindsight, we can now see why NDX and IWM had not reversed along with SPX and instead were waiting until Friday. Now we have SPX also looking at Friday. As long as the reversal on Friday is a ‘good one’, it won’t be such a big deal in the long run.
With regards to the other 3 issues, GOOG is reversing on Thursday to the up side. Today, I liquidated my short in GOOG. The other 2 issues I focus on are AAPL and AKAM. Last week, I wrote that one should not hold options on a stock during the announcement of earnings. Not so fast. I don’t know why I phrased what I said the way I did. I was focused on the GOOG incident but that was a problem because earnings and option expiry coincided. That can be a tricky situation. But, overall the model actually does very well with earnings. Look at AAPL and AKAM today. The model had AAPL pointing up and it went up. The model had AKAM pointing down and look at the 11% drop it suffered with the announcement of its earnings. Incidentally, the model has been right most of the time when I think about it. So the problem is the coupling of earnings and option expiry. That definitely should be avoided.
As things now stand, I will short the 3 indices on Friday. I will short QQQQ and add to my shorts in IWM and SPY. I will survive and I will get back on track. I still think I can achieve my target of $40K by August 1. Good luck to all.
My Comments after Tuesday (April 24):
I am trying to settle down and get back on track. Today, I added to my short positions. I am now short GOOG, IWM and SPY. With regards to the 6 issues, here is where we stand. The SPX is pointing down. However, the NDX and IWM continue to point up until Friday (naturally this date can be adjusted with the entry of new data). Today I jumped a bit ahead of myself and shorted IWM. By the end of the week the markets should be pointing down.
If we look at the other 3 issues, we have GOOG pointing down, however a reversal is possible on Thursday. GOOG needs to drop about $3 to put the reversal at bay. The other 2 stocks are AAPL and AKAM. Both report their earnings on Wednesday. So let’s wait to see where they will go and how the model ‘takes’ their trading data. As we go into earnings AAPL is pointing up and AKAM is pointing down. How interesting. Stay tuned.
My Comments after Monday (April 23):
The April options are behind me. I bought the QQQQ shares I was short as a result of being assigned. That’s all history now. It is time to move on. Like at VT, it is now back to ‘business’. We cannot let such events shape our lives – life must go on. They are resuming classes – with I’m sure much apprehension. I am resuming trading. Naturally, my situation and that of VT have little in common. My references to VT are used because of my obvious attachment to such institutions. However, I too have some apprehension because I was stung (by a ‘mosquito’). At VT they were shot. So today I made a new trade based on May options. I sold a bear credit spread (based on May 480/490 calls) for GOOG. On Tuesday I plan to go short SPY and then at the end of the week, QQQQ and IWM.
My plan is to follow the model – no matter what. My downfall in the last six months has occurred when I did not follow it. So, for example, I am short GOOG but there is a possibility it will reverse on Thursday. If it does, I will close out my short position (May 480 calls) and simply hold the May 490 calls until I decide what should be done in the longer term.
If we look at the 6 issues, we have the 3 indices reversing this week. SPX reversed at the close on Monday (today). IWM and NDX are looking at Friday. The 3 other issues are moving to their own rhythm. AAPL is pointing up. It had a good day today. AKAM is pointing down but it was up 3% today. However, the model is keeping AKAM on the down side. One should note that both AAPL and AKAM are due to report earnings. Thus, I will not take any positions in either until the dust settles. GOOG has reported (and I guess the dust has settled) and it is pointing down. Earnings can distort the trading in a stock. You get rumors being floated from all sides. I would suspect that many of the rumors are put out to profit specific groups. Once the earnings are released, the stock will settle down. But the period around the release of earnings is not for me (or for my model). Enjoy and stay tuned.
My Comments after Friday (April 20):
What a week. I hope we don’t get any more like that. All I saw was a ‘killer’ on the screen. Meanwhile, I acted like a ‘moron’. The model kept pointing up all week and I held positions on expiry week that amounted to shorts. I hope that I never see such situations again. If you read what I wrote on Friday the 13th below, you will see that I acknowledged the situation but was clutching at straws. I am putting last week behind me. I admit I made a gross error in judgment and I paid the price. To top it all off, I tried to get out of my QQQQ call spread. I put in the order (finally) at market at 2 pm and went to a meeting. To my surprise, the spread did not get closed out. So I am now short 2,500 QQQQ shares going into Monday because I was assigned. The problem I now realize was that one leg of the spread was worthless and no one was willing to buy worthless options. When I think about it, I can’t believe I did that. I should have known better.
Anyway, I am still in the game. While I gave back some of the gains, I still have about $16K in my options account. I’ll get back on track. The model once again told me – listen to me or you will be toast. And once again it proved to be right. As we go into a new week, the model still has the 3 indices pointing up. But all 3 indices are looking to reverse to the downside this week. Last week’s gains have pushed the reversals a bit further out.
With regards to the 3 stocks, we still have AAPL looking up. But we continue to have GOOG and AKAM pointing down. GOOG’s Friday bounce did not affect the model’s outlook. It maintains that GOOG would rather go down than up. I am looking to short GOOG as early as Monday. AKAM is awaiting the release of earnings, thus I am not interested in getting caught in the cross fire. So my strategy for the week will be to short GOOG and then SPY and then QQQQ and IWM. Good luck to all.
My Comments after Wednesday (April 18):
Not much happened today except for GOOG. During lunch time it shot up about $5. Given I am short GOOG, that hurt. However, the model has GOOG in a down trend. I am staying in it as long as I can. But I have April options. For the other issues, we have IWM now reversing to the down side on Friday (20th) and SPX and NDX on Monday, April 21st. AAPL is in an up trend and as I said GOOG is in a down trend. They are looking to reverse (in opposite directions) around the end of next week. AKAM continues in a down trend.
As a parting comment, I would certainly be interested in knowing what happened to GOOG at lunch time. Why did it go up? Was someone ‘playing’ around with it? Is there a leak? If GOOG is down after earnings tomorrow, then I would interpret today’s rise as a possible form of manipulation to move it up to allow some holders to sell their holdings prior to it dropping. I will anxiously await the outcome. Stay tuned.
My Comments after Tuesday (April 17):
Tuesday was an interesting day. The Dow was up but the other markets were flat or only up marginally. I am still short with April options. They expire in 3 days. Meanwhile, as you can see from my accounts, I am way down from the peak numbers – such is life. I will work that much harder to get them back up.
Now let’s look at where we are at. First of all, the 3 indices (SPX, NDX, and IWM) are virtually identical when you look at the graphics I generate. They all went into up mode a couple of days back. They made gains. Their intraday data was up but now we have the intraday reversing to the down side (Wed morning) and we have the alignment of red intraday slices with red daily slices on Monday, April 23. At this point, I am short because those were the positions I had. But now, I am comfortable with them because the intraday is reversing to the down and the overall direction will also reverse on Monday. So given the recent gains by the markets, I feel comfortable being on the short side.
The other 3 issues (GOOG, AAPL and AKAM) are all different at this time. AAPL is pointing up with no reversal on the horizon. GOOG is pointing down with a reversal to the upside that is visible and AKAM is pointing down with no reversal visible. So things are really strange when viewed from these 3 companies. Given that AKAM is pointing down and the markets are about to do the same, we can factor out AKAM. With regards to GOOG, it is pointing down at this time – so that is in line with the markets. The upcoming reversal is puzzling. One scenario is that it won’t happen because of the earnings, for example. On the other hand, it may follow its script (and reverse to the up) and we would then have GOOG diverging from the markets. It is too early to tell. Anyway, let’s see what Wednesday will bring us.
My Comments after Friday (April 13):
This is somewhat of a difficult commentary to write – I guess a good part of the reason is that I am short some of the market averages. And, if you look at the graphics, you will see that 2 of them (NDX and IWM) are set to reverse to the upside on Monday morning (10:30 am slice). The third index, SPX, is set to reverse on Thursday. I am short, one way or another, all 3 indices with April options. So what I will do will have an immediate impact on the performance of my account. Thus, I have been assessing the data carefully. Here is what I have come up with.
There is an issue I am concerned with. It relates to the intraday data. When we look at the intraday data we find a string of red followed by a string of green and then followed by a string of red, etc…. Under certain conditions, a string of a given color may not be ‘real’. It may be a ‘fakeout’. This, I determine by another piece of data that I do not report. However, in this case, what I am seeing is that the upcoming reversal (Thursday) for SPX may be a fakeout. In addition, the reversals (Monday) for IWM and for NDX may also be fakeouts. I hate bringing this up at this time but there is a lot at stake and whatever decisions are made have to be the ‘best possible’. If NDX and IWM are fakeouts then the appropriate decision for next week would be to remain short. This is what I need to decide on Monday morning after I see some more data. SPX remains on the downside so there is little to be done with it.
There are 3 other issues I am following. Let’s start with GOOG. There is no reversal that can be seen at this time during the coming week. So GOOG will remain pointing down. Another issue, AKAM, now has a reversal to the up side showing up near the end of the week. Naturally, such indications are tentative and subject to change with the addition of new data. That leaves AAPL. Its reversal to the up side is now set for Tuesday (with the intraday data it is actually set for Monday afternoon and it is not a fakeout).
As a final note, I would like to state that we have to be careful here. This market is unstable and it may be setting us up. This market seems to be trying to suck people into long positions before taking a dip once again.
As a footnote, I want to explain why I am so focused on this move. It boils down to 2 points.
1) I have options that will expire within the week and,
2) Regardless of a fakeout or not, the SPX is only set to reverse on Thursday which is when I want to liquidate my short positions. And SPX is the best representation of the market.
These 2 factors have tied my hands and have me hanging on and clutching at straws. For now I am going into Monday short. But I will keep my eyes open. Obviously I want to avoid an unwanted situation.
My Comments after Thursday (April 12):
The market of the last couple of weeks has been a tough one for the model. It hasn’t been able to nail it down. Yesterday, I said we put a couple of runs on the board. The other side matched those runs today. So this game is a toss up. Now when we look at the individual issues, we find that 2 of the market averages (NDX and IWM) are set to reverse to the up side on Monday morning. At this time, it looks like SPX will follow on Wednesday.
If we look at the 3 other issues, we find that 2 of them are now in the position that we cannot see the reversal. I know it is there but we can’t see it. The last issue is AAPL. Well, AAPL is set to reverse with NDX and IWM on Monday morning. However, AAPL dropped another 2 dollars after the close today and this info is not yet in the model. So we will need to see what will happen to the Monday reversal once the Friday data is in. At this time I am confused but I simply follow the model and as long as it is not confused, then there is not too much to worry about. The current move has not been able to generate any profits and may, in fact, generate losses. The clock is about to run out on this move. Let’s forget it and move on to the next one. So be it.
My Comments after Wednesday (April 11):
Today I will start this piece by referring to a ‘nice’ email I received. One aspect of it, however, was somewhat critical of a line I used yesterday in this column. The writer quotes the line “Am I disappointed?” The writer suggests that I keep such personal comments out. My response is I will not. Why? Because this is my personal blog. In fact, I want to incorporate more personal views. Someday when I review what I wrote, I would like to get a sense of how I felt at different stages of ‘My Journey’. So bear with me while I inject some of my emotions into the commentaries. In the end, how I feel is not as important as how the model is doing. You can forget my emotions. Whether I am disappointed or not is probably of little value to you. However, there is a certain importance to me in that it is a reflection of my mood. Today’s market action reinforced my feelings of yesterday and it vindicates the lack of disappointment that I voiced yesterday.
The market is difficult to get a grip of. That is why the majority of investors simply struggle to keep up with the returns of the major indices. I am looking for returns that are astronomical in comparison to the averages. To achieve this, you will agree, requires one heck of a system, not to mention a strategy and discipline and good money management skills. As time passes, I feel I am gradually improving in these areas.
Today, the model did well. If you read yesterday’s comments you see that I said this game is not over yet. And today the model put a couple of runs on the board to make the game close again. There is still enough time left in the game for the model to come out a winner.
Today’s action has delayed AAPL’s reversal by a day (it is now on Monday). AKAM has been pushed back a couple of days to Thursday. And GOOG is now showing up on the radar with a reversal tentatively set for Thursday just like AKAM. With regards to market averages we have NDX and IWM looking to reverse on Tuesday while SPX is looking at Wednesday to reverse to the up side. This make life very interesting because by Thursday of next week we should have all 6 issues reversed to the up side. Now isn’t this exciting. You bet it is. There go my emotions again. Enjoy.
My Comments after Tuesday (April 10):
The market has been up day after day for a while (8 days in a row). But the model has had it pointing down. Well, such is life. If we exclude the 130 point jump early last week, the gains have been modest. One might argue that the model was wrong – not so fast. This game is not over yet. The reversal is at hand but has not happened yet. Imagine the following scenario – the market is down 150 points tomorrow. That would turn the table – now wouldn’t it? We may see something like this before this reversal takes hold.
With regards to the reversal to the upside, the 3 indices I follow (SPX, NDX and IWM) are set to reverse on Wednesday the 18th (i.e. in about a week). For the stocks we now have AAPL leading the way with a reversal on Friday the 13th at the close. It is followed by AKAM which now looks to reverse to the upside on Tuesday the 17th. The last issue, GOOG, is stuck. There is no reversal for next week that is visible at this time. So, next week things will heat up a bit. Let’s see what happens.
As I reflect on what happened, I note that the last 2 weeks have been difficult. I have struggled because my futures and options accounts have given back some of the gains. As I said before, the markets have gone against the model. Am I disappointed? Not in the least. Such performance has happened in the past and it will happen in the future. And remember, this game is not over yet. For the markets, we have another week to tally up before we close out this game. So hang in there and keep your eyes on the ‘ball’. Good luck.
My Comments after Monday (April 9):
This morning after
Now with regards to the six issues, it is time to start paying close attention to the graphics. Why? Because they are all positioning themselves to reverse to the upside. I won’t go into the details at this time but I would suggest you take a good look at the graphics. Stay tuned for Tuesday’s update for additional clarification. Remember, the markets are like the weather. We are looking at the movement of a low pressure system out of our region. It is being followed by a high pressure system. I will continue to track the 2 systems to keep you informed. Good luck.
My Comments after Thursday (April 5):
I am not going to say much today. I have said most of what I wanted to say during the last few days. At this point I have to focus on the coming week. I have a bunch of options that need to be taken care of. I will be traveling Thursday and Friday and won’t have web access during the day. So I need to make decisions. The markets for the coming week are looking at the downside. We have the intraday slices as red (they had been green for the past week) and we have the daily boxes as red. So the markets should be down next week. My futures experiment is on-going. On Thursday my futures account went down to $7K – this was my first day. I plan to evaluate my progress during the next month to decide whether futures trading based on the intraday cycles is the way to go. I think it is but I need to prove it before I transfer out of options.
My Comments after Wednesday (April 4):
Today was quiet after yesterday’s large advance. The model has the markets in a down trend until the end of next week so yesterday’s advance went against the primary trend. However, the intraday showed that we had some upward bias the last few days. We saw that on the individual graphics (row 1) where you would have seen for the last few days – green slices. They are gone now because at this time the intraday for the markets has turned negative (red slices). So we will be in a down trend which is coupled to a down tendency in the intraday data (the slices are now red) for the next week or so.
I have become interested in the intraday data because of the futures play. My plan is to trade the futures on the intraday data. When the overall trend aligns with the intraday I will trade twice the number of contracts versus when the intraday does not align. This should really be quite an interesting experiment. If it works it will be the pot of gold at the end of the rainbow. If what I am proposing is successful, fulfilling ‘My Journey’ will be relatively easy. How will I know if it works? I need a month. So by mid-May I will have a really good idea of where My Journey is taking me.
My experiment with the model in the last ½ year has proven to me that it ‘works’. There is little doubt that it can be used to make money and to do so quickly. So why am I looking for an alternative strategy? The answer is because I want to simplify the technique. The use of options is too stressful for me. I am afraid that I may not be able to do all this at the same time. The stress component will kick in at some point. So I would like to simplify the entire process. At this time, I am trading options and futures. If I can show some good success with futures, I will drop the trading of options. I am giving myself a month to demonstrate the ‘successful trading of futures’ that I am looking for. The experiment starts tomorrow morning (April 5) with $7.4K in my futures account and a position of 2 short S&P500 contracts (minis). Let’s see where I am on May 5.
Futures trading of indices is definitely a major simplification. But with futures there is no time premium. You have to earn what you make. With options you have the time premium that works to your advantage. This is not true of futures. That is why I need to refine the trading strategy for futures trading. Without the refinement there is little to be made in markets that stagnate. With options trading that is not true – there is money to be made with stagnating markets. So the strategy for the successful trading of futures needs to refine the cycles to capture some of the secondary moves. That is what I am aiming for. So, Stay Tuned.
My Comments after Tuesday (April 3):
Today was an eye opener. The experiment was a flop. But it is an excellent opportunity to ask “Why“? The answer is simple. Nothing goes straight up or straight down. The trend is down but we have some secondary up movement. What is interesting and what I have been watching is how the intraday slices pick up on the moves. For the last few days the intraday have been green (The daily boxes have been red.). This is actually a very interesting situation that I will explore further. I will come back to this in a minute but first let’s look at what happened today.
The markets and my 3 stocks were all up sharply. My $26K went to $22K in my options account. I am not disappointed. Such is life. However, the up trend that we saw today is quickly fading from the scene according to the model. In fact when you look at the intraday for the market indices (all 3 are virtually identical) they will go red at the end of Wednesday (tomorrow). That is good news for my short positions. Naturally, the model has to be right for it to be good news. Let’s see what will happen.
With regards to the intraday data as represented by the top row in a graphic, I am looking at the possibility of using it to trade the market with futures. After a lot of soul searching, I am once again coming to the conclusion that futures are the way to go. I know – I’ve said this a number of times before. But, I think this time it is different. I have a feeling that the options I currently hold will be my last ones for a while. I really need to reassess my position and that includes the amount of effort and time options require on my part. I have learned that futures require much less and are much easier to maneuver. Hence my interest. Enough said at this point. I will keep you posted.
My Comments after Monday (April 2):
Monday was a ‘strange’ day. I didn’t have the opportunity to monitor the markets but when I look over the data I see some down pressure and some recovery. Anyway, I don’t like to speculate – let’s wait for the model to give us the signal. The reversal is coming but we will have to be patient. I enjoy watching what is happening. Every day is a new experiment to evaluate. I am thrilled to have this opportunity.
On another note, some have asked why I don’t publish my record or maintain a public archive. There are several reasons. One is a lack of time on my part. But, the major reason is because I am only interested in ‘interacting’ with those who have a genuine interest in my work. I am not selling anything nor am I asking for something in return for what I write. But I do expect something indirectly from the audience. I expect you to keep track of what is going on. That will make you a better investor (and this is something I want for the ‘little guy’). And, it will make you more constructive in your assessment of my work.
Your feedback is always appreciated. Do you have any comments on my new graphics. On a personal level, I think they are great. With the data presented in this fashion, it is a simple matter to follow a stock or a market. I also think the latest change I made to go to 7 days forward has some really good merit. What are your views?
My Comments after Friday (March 30):
On Thursday, I did not update the site. Sorry. But I am back. I want to thank all those who are reading this and who are sending me comments. They are much appreciated. If you have comments and in particular about the way I present the results (or even interpret the results), let me know. With regards to the markets, little has changed. They remain in down mode. Now, that does NOT mean that they will go down every day. All it means is that if you had to choose between down or up you should choose down. In weather terms it is analogous to saying if I had to choose between the weather for next week in terms of the bulk of the week will be sunny or it will be cloudy, I would choose cloudy.
The good news is that there are some positive developments for the longs that are starting to appear on the horizon. Today, we saw an example for AKAM. On Monday we will start seeing some evidence for SPX, AAPL etc.. So not all is lost. A reversal is coming. And it seems to be setting itself up for the announcement of earnings and options expiry. So Stay Tuned. And Good Luck to My Friends. Those who are not my friends will simply have to do without my good wishes. Such is life.
My Comments after Wednesday (March 28):
What does one say after a day like today. I went in with 3 short positions and I added 2 more shorts this morning. All are based on credit spreads. In addition, I am short 2 SPX futures contracts. I am now short AAPL, GOOG, SPY, QQQQ, and IWM.
Several weeks ago I said that I would stop trading options. I am glad I changed my mind because when traded as credit spreads they are really quite something. If one can get the timing right (it doesn’t have to be perfect), they are really good to grow your funds. Someone wrote me and asked if I would take the kind of risks I am taking if I had $500K. The answer is yes.
Let me review what I have done. I got credit spreads that are close to the money. At this point, 3 of the spreads are completely out of the money which means that if they were to expire today I would make the maximum profit. Both legs of the spread would be worthless. Two are slightly in the money. If today was option expiry, I would give $2K back. But the point is that I have $12K above the actual (liquidation) value of my positions. This money represents the proceeds I picked up with my short sales. Remember, a spread involves 2 trades (one is a short and the other is a long). So I have $12K in my account which if today was the expiration date, I would give back $2K and keep $10K. That is a pretty good (and somewhat conservative) position to be in.
The bottom line is that there are $10K in my account at this point which if today was option expiry, I would keep. The reason I bring this up is because I am practicing strict money management. In addition, I have $6K in my account that I did not commit. I would like to keep about ¼ at any point in time as cash. And that is what I did.
Now for the markets – all issues are pointing down. I will not try to guess when the model will reverse them. Let’s look at the results one day at a time. The model will let us know when it thinks we should reverse our positions. So, stay tuned.
And finally one last point. A poster on the AAPL board (MoreTimeMoreMoney) who typically uses the response ‘blah, blah, blah’, today stated that technical analysis is on the level of reading chicken entrails. Yuk. I guess he hasn’t kept track of how I am doing. I remember him using the same line on me a while back. I never cease to be amazed at how some conclude that something is not possible because THEY CANNOT DO IT. They tend to forget that the world is not just them. I have stayed off the boards and am happy. Look at the GOOG board, there is little of value. The AAPL board is not much better.
My Comments after Tuesday (March 27):
On Monday, I did not update the site. But today, I took the time to incorporate the new graphics. I am thrilled. I think they are now more informative – they are more useful. You see a bigger upcoming window. And the reversals are more ‘consistent’ given that there are only 3 slices in a day (as opposed to 7).
What about the markets? Well, the 3 indices I am following are now all pointing down. And the 3 stocks I am following will by tomorrow (Wed) morning be pointing down also. I do not like what I see. I am on the short side. I have credit call spreads which are bearish for the 3 indices. I plan on shorting AAPL and GOOG on Wed. So I am negative – obviously for the short term because that is all I look at – the short term. Who said things are boring. Not me. I am having fun. Good luck to all.
My Comments after Friday (March 23):
Today was a non-event. AKAM reversed this morning (Friday) to the downside as we had anticipated. It went on to drop 2% in the day. I put in an order. It was not filled so I did nothing. I am long AAPL and that’s it.
As for next week, all 5 issues will, at some time (tentatively – Wednesday) be reversed to the downside. At that point, I will undo my long AAPL and convert it to a short AAPL position. I will also short the others. Next week will be the start of a big test for the model. If it pulls it off, I think the sky will be the limit. So, I am anxiously awaiting next week.
What I wrote yesterday about another model for futures – forget it. It won’t happen. The futures will be handled like all the other issues. I got carried away. There is so much going on that sometimes it is easy to be carried away. As we come to the end of the month of March, it will be 5 months that I am buying and selling options for ‘My Journey’. In all fairness, I bought my first options in the late 70’s (about 30 years ago – Ouch). I was never really successful and I lost a few bucks along the way. I guess a moral might be (and I stress might) “It’s never too late’.
I am thrilled at what I have accomplished. But, more importantly, I am excited by what the model has done. I find it amazing when I look at the daily results and how the model locks into situations. The final point I want to share with you relates to the graphics. It is so much easier to get a handle on where things are and where they are going. This aspect evolved with time. It was not the way you see it now when I started. That is why, if you have any ideas, I would be glad to hear them. Good luck to my friends.
My Comments after Thursday (March 22):
After 3 big up days, the markets rested on Thursday. At this time, I am looking at AKAM which has set itself up for a reversal to the downside on Friday (tentatively 1:30 pm – obviously the time is somewhat of a guess). I plan to short AKAM. However, for the red daily box to remain red for Friday, AKAM needs to close below 52.80. If it does, then the sell stands. If it looks like it will close above 52.80, then the sell is pushed to Monday. I will personally look at what it is doing at lunch time and make a decision. I will be away from a computer for most of the day. So I may have to postpone until Monday if AKAM is moving up.
The other four issues are all looking at Wednesday as the point to reverse to the downside. The ‘storm’ I have been talking about, well I still see it as significant in size but beyond that I know little else. And, I should stress, it may end up being of little consequence. Regardless, I will be going short when the time comes. What I make (or lose) will be a function of what will unfold. I will be tracking it and will keep you informed. Stay tuned.
My Comments after Wednesday (March 21):
Oh what a day. The market had a terrific day – up 160 points – but you know that. I am happy. I am still long AAPL and the S&P and will continue to be so for the next few days. Yesterday, you will recall (or you can read it just below) I was looking at a ‘storm’ that is forming way out there in the ocean. With today’s up action, the reversal to the down side (the storm) has been pushed back. Yesterday, I was looking at Monday. Today, the model is looking at Wednesday. The formation of the storm has slowed down. Someone wrote me an email asking if I use some of the equations used by meteorologists to model the weather. The answer is no.
To me the weather and the markets are very similar. The weather encompasses the fields of engineering I specialize in. I have applied that knowledge to the markets. I will be honest with you – I am really enjoying myself. I went public with my project about 1 year ago. And then on Nov 1’06 (about ½ year later) I took the plunge. I began My Journey – live for all to see. It is now almost 5 months later and as of the close today my initial investment is up about five fold. What a ride it has been and what a ride it will be. It hasn’t been easy. But, it certainly has been a thrill.
There are times when things don’t look great but there are many other times when things look good. There are people like Pantone, Sergio, Wayne, ipod, oakseller etc.. who are terrific in their support. God bless you all. You guys have been real inspirations. You would be surprised at how important constructive comments are. I recall an individual ‘tfv’ writing horrendous comments (some were blatant lies) about myself, my work etc.. That, I will admit was a low point in My Journey. But, a number of you have told me to forget these individuals – they are the annoyances we have to deal with in life. Focus instead on those who appreciate what you are doing. And that is what I am doing. There will no longer be exchanges with these people. They can go on and bash all they want. But, as I say, ‘What goes around, comes around’. Good luck to all my friends.
My Comments after Tuesday (March 20):
Tuesday was another good day. The markets were up nicely. But, as I pointed out yesterday, there is something brewing on the horizon. It does not look good for the longs. Remember, I focus on short term moves. If you are long a stock, my analysis should be of little concern to you. However, if you are involved with options, you may wish to consider what the model is saying.
At this time, we are starting to see white down arrows. The first appeared for AKAM (in the Friday, March 23 box). During the next day or two we will see these white arrows, which are reversal arrows, for all of the 5 issues. The bottom line is that something significant to the downside is coming. At this time, it looks like it may begin in the Friday/Monday window.
By Friday I will be out of my long positions. On Friday, I will start taking short positions. The first in line is AKAM. And then I will go short AAPL, SPX and NDX. Now isn’t life exciting.
One last point needs to be made. The current outlook I am presenting is tentative and will be revised as new data is fed to the model. For example, if the market is up 400 points tomorrow, it will have an impact on the projected down turn. That is the way life is. The model is not a crystal ball – it’s a hybrid timing model. Enjoy.
My Comments after Monday (March 19):
Monday was a good day for longs. The model had said that there was upside potential. We saw some of it today. However, I do not want to delve on the past. I’m interested in the future. Unfortunately, the model has started to pick up a ‘storm’. All 5 issues will be affected. At this time it looks like landfall will be the Friday/Monday window.
I do not like what I see. I think the decline is going to be of significant proportions. Those who have been with me a while know I don’t like to predict magnitudes. And I am not. But, when the data for the issues is aligned like it is now, there is a high probability that something of ‘significance’ will happen.
I am not taking on any new long positions at this time. I will be looking to get out of AAPL when the model says to and I will go short across the board when the model signals the reversal to the downside. So stay tuned – the fun which may start happening by the end of the week or early next week should keep us ‘amused’. Before you depart, you should know that the markets are like the weather. You make your plans but you stay tuned to the latest updates. Nothing is set in stone. Revisions to the current forecast are a fact of life. This will be an interesting week. The way I see it – we will get the opportunity to track the storm or at the very least see how ‘accurate’ the model is. I can’t wait.
My Comments after Friday (March 16):
We close out an interesting week. We had a major drop on Tuesday but in the end, life in the markets was a bit more stable. At this time, of the 5 issues I follow, only GOOG is pointing down and on Tuesday morning (tentative) it too will reverse to the up side. AAPL reversed to the up side on Friday. Note, I no longer look at long term and short term. I simply look at the ‘current trend’. The length of most moves will range from several days to several weeks.
Friday was also the date for options (and futures) expiry. The event was relatively non-eventful. I had QQQQ and SPY spreads that I let expire – they had become worthless (I maxed my profits on them). On Friday I got into the equivalent of ‘long’ positions in AAPL. I got 2 spreads. One is a bullish credit spread based on puts while the other is a bullish debit spread based on calls. Normally, I would not get a debit spread because it needs more stock price movement to make a profit. However, for the next week (or 2) everything is aligning to the up side thus the added risk. The Nasdaq and S&P are lined up and are identical in terms of the graphics I produce. This is good because they tend to reinforce each other. I don’t like the scenario when one is pointing up and the other is pointing down.
On Monday, I will look at getting (long) into the SPY and QQQQ (even if the bullish credit spreads based on puts currently have a terrible pricing structure). In addition, on Tuesday (all things being equal), I will go long GOOG. So, it looks like we will have an action packed week. Stay tuned.
As a final point, I can’t believe how many commentaries I have accumulated on this page. I will erase a number of them in the next day or 2. There is no need to keep them indefinitely. I do keep an archive and thus have them all.
My Comments after Thursday (March 15):
It is Thursday. Yesterday I screwed up the date on this page. Sorry. Today (Thursday) the markets were calm – we got some breathing room. As of the close on Thursday we have the S&P500 (SPX), the Nasdaq 100 (NDX) and AKAM pointing up as they have been for a number of days. At this time, I cannot see reversals on the graphics for these 3 just yet. That leaves us with GOOG and AAPL. GOOG has been pointing down for a number of days and it continues to do so. However, the graphic for GOOG reveals that a reversal to the upside may happen on Tuesday, Mar 20 (tentative of course). Meanwhile, everyone’s favorite, AAPL, will reverse to the up side tomorrow morning (Friday) assuming AAPL isn’t knocked down too much. For the green daily box to stay green requires that AAPL close above $88.95.
If AAPL is stable tomorrow morning, then at 10:30 which is the end of the first hourly slice, I may go long AAPL (April options). I may also go long QQQQ. Stay tuned.
My Comments after Wednesday (March 14):
Today is Wednesday and I am changing my mind again. I will not remove any of the 5 issues. I will not stop trading options and I have modified the graphics presentation to make it more useful (and less confusing). I think I got carried away, in part because of some of board posters. From now on, if I do post and I get negative comments which you know I will, my response will be ‘LATD’. Soon I will reveal what this means unless someone can guess what it means. I made it up so I don’t know if is listed somewhere. No, it’s not a ticker symbol. I feel good and ready to get back into the options game. Stay tuned. Tomorrow I will post on my main page some text I wrote about the changes I am making.
My Comments after Monday (March 12):
Monday was an up day. Going into Monday we had 4 issues with short term up trends. Remember, I play the short term trend only. When your investment horizon is measured in weeks (1 to 3 weeks, for example), then the primary trend is ‘irrelevant’. It is the short term trend (as indicated by the colored arrow on the left of each graphic) that counts. The short term trends were up for SPX, NDX, AAPL, and AKAM going into Monday and also at the close on Monday. The issue with a down short term trend was GOOG.
On Tuesday, we can have AAPL also reverse on the short term trend to the down side. IF AAPL closes on Tuesday below $90.80, then the reversal will have taken place on Tuesday. You should assess the situation and act accordingly. This weekend I will discontinue analyzing AAPL, GOOG and AKAM. In all fairness, I will have no regrets for getting away from AAPL and GOOG. The jokers on those boards have totally disgusted me by their arrogance and childish behavior. In short, some of them deserve to lose because they are losers by the way they act. Their investment strategies are guarantees to failure. Such is life. You have to make mistakes to learn. Many seem to be in that mode.
My Comments after Friday (March 9):
It’s Friday. I have been out of the options game for a few days. Why? Because options are simply too difficult to deal with. I have done well. BUT the fact of the matter is that the options playing field is skewed towards the writers of options. The pricing of options is crazy. I trade spreads and the gap between the bid and ask can be 10 or 15% (to get in and the same to get out). At this point I have quadrupled my options account in 4 months but, I have to reflect on this strategy. Deep in my heart, I feel it is the wrong strategy. Meanwhile, I have a futures account which I have not done as well with. BUT, I enjoy the futures game. It is simple. The pricing could not be better. The issue of expiry is a non-issue. The fact that there are margin calls means that there is someone looking over you (and protecting some of your capital). And best of all – you get to play the market and not individual equities. In addition, it is open 23 hours a day. In reality, I think I can match my options performance with a lot less hassle. Anyway, these are simply some of my thoughts going through my head.
Incidentally, I am also fed up with a number of the posters on the boards. They lack RESPECT. They are not the only ones. The world (mankind) could use more respect. If we valued respect more – we would have fewer problems. Respect is the key. When you take a good look at yourself and others and think in terms of respect, you see that if we had more of it, we would not do some of the things we do. Back to the posters, some of them are naïve. I realize they are young and think they know it all and, as a consequence, respecting others is not in their vocabulary. But, as I say, ‘What goes around, comes around’. Respect is manifested in treating others as you would like them to treat you. My belief is that if you can do that, you will be a ‘success’. If you can’t, then disappointment and failure will follow you around. Good luck to all.
On Sunday evening I plan to make an announcement on my main home page about what I plan to do in the future. So, stay tuned.
My Comments after Wednesday (March 7):
On Wednesday, I took a rest from the options game. I plan to go back in Thursday afternoon or Friday morning. My plan is to go into the indices and perhaps AKAM. I am referring to long positions, of course.
Remember, the primary trends for all 5 issues are down. But I play the short term trend. The two should not be confused. One point to note that came out of tonight’s analysis is the fact that AAPL is starting to assume a leadership role in reversing the primary trend. If you look at the last box of row 3 (7 days away), you will see green in the primary trend for AAPL. That happens to be OE. So for all those conspiracy theorists, the MM’s will hold AAPL down until expiry and then let it move up. Now how does that sound? I don’t believe it but some do. Stay tuned.
On the trading side, I want to put more time into the trading of index futures. They are so easy to trade that getting a handle on a good strategy is worthwhile. I am now trying to formulate a good and viable strategy for the trading of futures. The account I started on Dec 22’06 (with about $5K) today was at $8.2K. Not bad given I only traded one contract and for only about 2 months.
As a last point, I want to remind all that read my posts that the options and futures arenas are very challenging, demanding, and dangerous. It is easier than you think to be wiped out. If you choose to trade these products, you have to be prepared to lose ‘everything’ and in the futures game, even more than that. So, good luck and be careful.
My Comments after Tuesday (March 6):
This is a special day. I ended the day with essentially no positions (there are a few worthless calls in my account that are from spreads I held). My options account today closed at $20.1K. That is the first time that it closed above $20K. I started ‘My Journey’ on Nov 1’06 with a bit less than $5K. So far it has been one heck of a trip. It has been a true adventure. I have enjoyed it thoroughly. I know that I have a lot of road ahead of me. But, I feel I am up to it. Hang in there with me.
So what about the markets? There are several points. All five issues are now in short term up trends. However, all 5 issues are in primary down trends. I trade short term and so I use the short term trend, BUT many look at the longer term and then the primary trend is of more relevance. So it all depends on your perspective. I will do little until Friday. Then, my plan is to go long NDX, SPX and AKAM. And then there are AAPL and GOOG. I plan to go short these two. At this point this is just talk – strategizing. Let’s see what happens when we consider Wednesday’s data. Good luck.
My Comments after Monday (March 5):
On the weekend I noted that there were short term trading opportunities which would surface by Tuesday morning. Well, we are going into Tuesday and what the model saw on the weekend is now materializing. In addition, AAPL with today’s gain actually reversed today. That is because today’s daily box for AAPL turned green (on the weekend I had it as red – but the inclusion of Monday’s data reversed the box to green.) In addition, some of the hourly slices for Monday were green. So AAPL closes Monday in a short term up trend. I anticipated this today and liquidated my short March 85 calls. But I kept the long March 90 calls. So I am now long AAPL (for a few days anyway).
On the futures side, I closed out my short position in NDX and I am now looking to go long the SPX. I have done well enough in the futures account that I can now get 2 contracts. Up to now, I have been dealing with one contract at a time. For tomorrow, I plan to go long AKAM and SPY in my options account. As I stated, I am now also long AAPL calls.
Before signing off for tonight, I have something on my mind which I discuss below. If you have comments drop me a line. Your messages are always appreciated.
Shelf Life of Posters Who Are in the ‘Options Game’
Many of the regular posters on the Google boards (I look at AAPL and GOOG messages when time permits) are involved with options. I am guessing that this is the case and your input would certainly be valued. I wonder how many of the ‘regulars’ are option players. If you look at the profiles of posters you will find that the majority last about 4 months. They come in at time, t, and about 4 months later they are gone. Several examples come to mind: ‘getn’ and ‘anblick’ and ‘cyberm’.
I call this period the shelf life. I know that some who are reading this have expiry labels already attached to themselves. Such is life. The options game is brutal. Based on what I see in some of the posts, I can’t help but think – “His/her shelf life is coming to an end”. What is also interesting is to go back in time and read some of the stuff they posted. In my case, I have been especially interested in what they said about me and my work. In most cases, the ones with the loudest and foulest mouths were the ones whose shelf life came to an end. While we don’t know for sure, I would suspect that the probable cause was that they lost their funds and then no longer had a reason (or desire) to post.
‘Getn’ is a classic example. While I do not know if what I am saying is completely factual, I can state that his/her last post was on Feb 16 (Feb options expiration). Getn had posted almost 1,000 messages in Jan’07 and then he/she simply disappeared. If you are playing options be very careful – stay close to the money. Don’t get caught up in the hype – devise a strategy. Otherwise, there is a high probability that you may become ‘expired toast’. Good luck.
My Comments after Friday (March 2):
This is a special entry I am making today (Friday). Some of you are here because you saw my post on a message board. I am the Engineering Professor who is seeking to quickly grow $5K into 1 million dollars. My identity and university are not relevant at this time. I am doing this outside of the university context (as a hobby) with my own resources. As it happens, my trading has evolved. I put $5K into one account in which I trade options and another $5K into a futures account where I trade stock index futures. To find out more, go to item 3 on the main page. There you can see copies of my brokerage statements.
Why am I doing this (besides the obvious million)? Why climb
Second to last question. How has it been going? Better than I ever expected. I am thrilled about the results and I am confident that I will reach my objective. Naturally, there are many obstacles. But, the great thing is I am learning to deal with them.
Last question. Why am I sharing this information with you? Several reasons. An audience brings out the best in me. It forces me to focus and to be disciplined. In addition, these web pages, board postings etc.. will constitute my portfolio for my next adventure. What that will be - I don’t know. But first, I have to prove to myself and to you that one can make a million quickly.
Now let’s move on to the markets. Today (Friday) the markets got hit again. I am following 5 issues and they are all in down trends. Today they were all down. Take a look below at what I wrote on Thursday night. My positions are shorts. I went short before the markets started to tumble. I will be closing out some of these shorts and will start going long on Tuesday. Friday’s results, as computed by the model, have 3 issues forming short term reversals on Tuesday morning (note this is tentative and may be revised as Monday’s data is included).
If you are looking for long term investment ideas, you are at the wrong place. I am like a weather forecaster. The only thing that counts is the short term forecast (let’s say a week). A long term weather forecast has limited reliability. I believe that the markets are in the same category. Short term assessments can be made with some accuracy. Long term forecasts are of limited value.
OK. Let’s get back to the markets. Three issues (S&P500, Nasdaq 100 and AKAM) will generate short term reversals on Tuesday morning (tentative). The other 2 issues (AAPL and GOOG) are holding back. But as sure as the sun will rise tomorrow morning, they too some time in the near future will reverse and create short term trading opportunities. So, hang in there and stay tuned.
My Comments after Thursday (March 1):
Thursday has come and it has gone. As we started the day all 5 issues I follow were pointing down. At the end of the day, 4 issues had gone down. However, the hold out, AAPL, had rocketed up 3%. And, my primary position is a short of AAPL (I’m actually short the March 85 calls). So, I took a hit – I gave back some of my gains. Such is life.
Now back to the markets. All 5 issues remain in down mode. That includes AAPL. However, because of its sudden jump, it is now much closer to reversing than it was yesterday. If it is down tomorrow, then the short term reversal is put on hold. If, on the other hand, AAPL is up, then closer scrutiny of the model’s results (the hourly values) will be required to establish if there was a reversal in the short term trend on Friday. Regardless, AAPL’s primary trend is still down and will continue that way for the next little while.
With regards to the 5 issues I am following, the model has red in the hourly slices for all of them for the next couple of days. Thus, I do not see much potential on the upside for them. Given that 2 of the issues are the S&P and the Nasdaq, there isn’t much potential for the markets as a whole. My reading of the data is that the correction will continue and I include Friday (tomorrow) in the group. Only time will tell, but at this point, this is my interpretation of the data. Let’s see what Friday will bring us. Good luck.