Monday, February 23, 2015

$SPY, $STUDY, Todays trade SPY150417C210 entered @ $4.35, exited @ $4.27..not all trades are winners.  I did not feel strongly about todays market so I set the downside exit alert a little tighter than I might normally.  Fortunately for me the $VRX (Valeant Pharmaceuticals Intl Inc) which was put on 10/27/14 is more than making up for the trading loss.  Rather be lucky than good any day….

Saturday, February 21, 2015

$SPY, $STUDY, Last week was another very profitable week for the Alpha One Model although the lion share of the appreciation came from the portfolio holdings rather than the day trading activities.  Outside commitments had me away from the desk most of the week. Currently the portfolio is allocated at 55% long 45% cash versus the recommended level of 75% long and 25% cash.  There may be a few trades in the coming week from the Watch List but again I am not going to aggressively chase return when the day trading is doing well.

The shorter term Active Traders Model is very Bullish as you will note but here the model is extremely short term and totally technical in nature.  On the intermediate term side the Allocation model is also Bullish but not at yet at the level of the Active Traders Model. While it is also technical in nature it does analyze both Interest Rate and Investor Sentiment data in formulating its output. For me the combination translates into an exposure level between 55% - 75% along with hedging activities (Day Trading the SPY) to protect the YTD gains.  It remains a stock pickers market, earning season is most done with about 62% of the announcements beating estimates thus far.  The remainder of the quarter will be driven by news and those that know me already understand that I do not let blind people drive my car, enough said on that subject.

With the Greece problem getting kicked down the road and the ECB to start its own QE in March, stocks are set up for more short term gains. Like what we saw in the past two sessions, pullbacks are likely to be bought. The lack of selling pressure, coupled with eagerness from those underinvested to buy in, is likely to allow stocks to melt up further into record territory.

Friday February 20, 2015

$SPY, $STUDY, Today’s trade SPY150320C209, entered @ $3.24, exited @ $3.49….

Tuesday February 17, 2015

$SPY, $STUDY, Today’s trade SPY150320C209 entered @ $3.54 and exited @ $3.86…

Saturday February 14, 2015

$SPY, $STUDY, The Alpha One Model continues to grow both on the appreciation of the portfolio holdings now at eleven positions or 55% invested and the daily trading of the SPY options.  This past week I added five names to the portfolio $DAN, $ICLR, $ORAN, $SKX and $UA.  I most likely will hang around this level as the quarter unwinds.  We are now past the peak of earnings announcements and the media faces will begin to hyper report on geopolitical events which will most likely cause market volatility to remain high. If there were only a news source less interested in selling minutes and more interested in reporting factual news without ‘hyper opinion’ the world would be a better place.

In addition to the S&P 500, both the small-cap Russell 2000 and mid-cap S&P 400 indexes are at fresh records. Stocks are overbought on a short term basis but not on a medium term basis. There is more room to go on the upside. Momentum is bullish while sentiment isn’t overly complacent yet. Those that are underinvested are likely to start buy in on pullbacks, keeping downside limited. Technology stocks have outperformed lately. The NASDAQ looks to be making its way back to 5000. It is truly a stock pickers market so measure twice and cut once.  Enjoy the long Presidents Day weekend!

Tuesday February 10, 2015

$SPY, $STUDY, Today’s trade was SPY150320P206 I entered at $4.63 and exited at $4.95 using an alert which was set at SPY at or below 204.83 which touched at 10:46 AM.  Yes, I know the market is up at this time (1:05 PM 2/10/15) but I was not buying the market I was trading the SPY.  My Entry Signal which is driven by the trend in the underlying told me to follow the Puts this AM, see chart below.  I calculated my profit points and set my exit alert based upon the Profit target which I was seeking for the trade.  There was about $10,000 committed and a profit of $651 or 6.5% on the trade today. 

You do the math for your portfolio…

Friday February 6, 2015

$SPY, $STUDY, Today’s trade SPT150320C206, entered @ $4.23  exited @ $4.59… used the forecasted price from the spreadsheet to exit … 

Wednesday February 5, 2015

$SPY, $STUDY, Today's trade SPY150320C204 entered @ $4.95 exited @ $5.40… was away for most of the afternoon relied on an alert calculated on spreadsheet below to exit.  

Tuesday February 3, 2015

$SPY, $STUDY, Today’s trade SPY150220C203 Enter @ $4.70 and Exit @ $4.70…not every trade is a winner….. 

Monday February 2, 2015

$SPY, $STUDY, Today’s trade SPY150220C200, Entered @ $3.21 Exited @ $3.58…

Saturday January 31, 2015

$SPY, $STUDY, January ended with a very strong overall performance in the Alpha One Model portfolio which is up 30.5% YTD.  The major portion of this gain comes from the Options trading which is undertaken as the portfolio holdings are trimmed back by the Asset Allocation model.  Options trading contributed $15,220.82 (25.4%).  However, the holdings have appreciated very nicely contributing an unrealized net gain of $3,052.91 (5%) on the beginning balance of $60,000.00.

Please note that the Alpha Master List has been refreshed and the new list posted on today’s blog along with the new Watch List.  Monday we will be closing $AGN, $ALGN, $CBG, $PZZA, and $TMO all of which are no longer on the master list.  These positions will be replaced from the watch list as the week moves forward.

Last week was truly an eventful one for investors and traders alike, finishing in a volatile fashion Friday, reflecting indecision among investors amid mixed signals from the market. Earnings were mixed as many were affected by a stronger dollar. The Fed’s latest statement released on Wednesday sounded a little hawkish, but the Fed Chair’s comment on Thursday was dovish. Consumer sentiment and confidence readings were strong but durable goods orders, as well as Q4 GDP (2.6%) were weaker than expected.

While the weak finish to January has left the market with a downbeat note going forward it is not all that bad at this juncture. After coming off the record highs reached at the end of the last year, the S&P 500 has pretty much gone sideways. Although short term volatility has been high and the risk of a correction has increased, the longer term uptrend is not broken. Of the 227 companies that have reported earnings to date for the quarter, 80% have reported actual EPS above the mean EPS estimate. Barring an unusually high number of companies reporting earnings below expectations in the second half of the earnings season, it appears likely the S&P 500 will report year-over-year growth in earnings for the quarter. Thus, the fourth quarter will likely mark the 8th consecutive quarter of year-over-year earnings growth for the index, after a year-over-year decline in Q3 2012 (-1.0%).

With no QE from the Fed, it is a stock picker’s market and so far this earnings season has demonstrated just that. Be very careful in this roller coaster market. Pullbacks will provide opportunities for stocks which have received positive reactions to their earnings.

Friday January 30, 2015

$SPY, $STUDY, Today’s trade SPY150320P201 Entered @$5.54, Exited @ $6.18, I had to stay in the trade longer than I normal today but by patiently waiting for alert signal triggered at 15:21 PM the trade was closed profitably.  

The alert level was determined when the trade was originally entered using the spreadsheet below. 

Wednesday January 28, 2015

$SPY, $STUDY, Today’s trade SPY150320P205 entered @$5.28  exited @$6.07…

Tuesday January 27, 2015

$SPY, $STUDY, Today’s trade SPY130520C203 entered @$4.63 exited @$5.05.  I was hesitant to trade the opening decline without a current Sell signal.  There was a Sell signal generated at 4:00 PM 1/16/15 but not repeated in today’s premarket.  So I practiced what I preach and was patient taking advantage of the mid-day reversal for a brief trade on the Calls.  Not sure what will happen into the Close but I am out for the day.

Saturday January 24, 2015

$SPY, $STUDY, The Alpha One Model continues to perform as designed, up in excess of $13m YTD from the starting portfolio balance of $60m.  The lion share of the gain has come from the hedging activities which use intraday trading of Options to offset market swings which may impact the portfolio holdings.  The model holdings are now at Long 52% with Cash of 48% which is slightly lower than the recently raised recommendations generated by the Asset Allocation model which are at 75% Long and 25% Cash.  There are several names on the current Watch list that I will be watching in the coming week, albeit with a conservative eye.

The technical condition of the market improved last week as evidenced by the Alpha Market Model summary.  The OTC returned to a Buy Status but all four members still carry a neutral opinion. The first two weeks of the earnings season have been lackluster with only the OTC carrying a positive YTD return. The overall technical indicators are telling us that near term downside is likely to be limited. For the next week it is up to the tech companies to brighten the earnings picture – MSFT on Monday, AAPL and AMGN on Tuesday, FB on Wednesday, and AMZN and GOOGL on Thursday. Overall, the short term momentum favors the bulls. However, we are in earnings season, as we know it is up to earnings to determine each stock’s fate.

Last week the scenario set up by the technical indicators was slipping into bearish territory but at the end of the current week the scenario has reversed course finishing mostly bullish territory.  Confirming the change of direction was a new all-time high by the NYSE Advance/Decline line and an expansion of the NYSE new 52-week highs vs. new 52-week lows. This week’s jump was expected as the market has rallied on every instance of quantitative easing. However, the outlook is still cloudy looking out over the next week or two. While low interest rates continue to keep a floor under the market, earnings season has been mixed and the fall in oil related stocks is weighing on the broader market.

If the market stalls over the coming week or two it could still be susceptible to a further pullback based on high valuations due to the cuts in fourth quarter earnings. As was mentioned last week, volatility should continue going forward. The next FOMC meeting convenes on Tuesday and Fed chairperson Janet Yellen will give an update on our economy. If the Fed hints at a bump in rates (unlikely), investors could use the change in language on the economy as an excuse to take profits.

Thursday January 22, 2015

$SPY, $STUDY, In both my intraday trading and the long term investing I am a true advocate of systemic (Rules Based) investing.  The following article from “TraderFeed” is both on topic and timely, I hope you benefit from it.

Best Practices in Trading: Using Rules to Achieve Consistency of Performance

Thursday January 22, 2015

$SPY, $STUDY, AM trade SPY150320C24 Entered @ $4.78 exited @ $5.25.  Today since I have a noon commitment the exit was calculated using range forecast for the SPY which is set up in the lower left corner of the picture below.  Had I been available to watch the trade the more aggressive upside of $5.38 would have been my target, however if I am away from my desk conservative is the game plan.

Tuesday January 20, 2015

$SPY, $STUDY, AM trades Closed AAPL @ $107.61 on Opinion Downgrade and Option Trade SPY150320P202 entered @$5.77  exited @$6.45. 

Tuesday January 20, 2015

Worth reading...
http://traderfeed.blogspot.com/2015/01/best-practices-in-trading-accepting.html?m=1

Saturday January 17, 2015

$SPY, $STUDY, Alpha One Model had a profitable week albeit on the back of Options trading, but in general the equity holdings and the portfolio process are working as detailed in the Alpha Process document.  The system continues to downgrade names on technical weakness and they are then closed out.  The exposure is limited to approximately the level of the recommended allocation levels which remain at 62.5% Long and 37.5% Cash.  While the portfolio is at little less than that level currently, we may add either $CAVM or $CTSH from the Watch list in the coming week, should the major’s react positively to the forth coming earnings releases.  The $AAPL position will be closed this coming Tuesday as the Opinion was downgraded Friday.

As crude oil prices continued to rise steadily throughout Friday’s session, stocks followed. There are some indications of positive divergence developing between the price levels of the major indexes and their technical indicators. With oil prices stabilizing, we are likely to see higher prices in the near term while volatility retreats.

However, the markets will remain volatile going into the shortened trading week and the probable direction for the major averages over the next few weeks is most likely lower. We have a busy earnings report week coming up, so remain nimble as it is going to be a stock picker’s market.

Friday January 16, 2015

$SPY, $STUDY,  AM Trade SPY 150320C200  Enter @ $5.56, Exit @ $6.15..