Académique Documents
Professionnel Documents
Culture Documents
Dan Shy
dan.shy@gmail.com
IN FOCUS:
Equities and Dividend Investing Outlook
Trading Outlook
Trading Outlook:
Note: By way of reminder, since the Model Portfolio has only $9,973.57 in the Commodity Futures and Stock Trading portion of the portfolio, there will only be 'brief day trades' at this stage of the game for Commodity Futures trading in order to escape the risk of over-leveraged gap opens in the commodity futures markets. Stock trades and option plays may last longer than one day, since the risk is lower. This is an attempt to demonstrate how account size relates to trading style. As I mention in my methodology series1, as the 'trading sister' reaches $30,000 I will graduate the account into 'swing-trading' and demonstrate how I would go about doing this. Stock trades may last more than one day. The Forex account has $66.63 and is considered a micro-forex account for the purposes of the model portfolio.
I would prefer that Waste Management (WM) continue to behave within the current channel between $34.75 and the high of $35.56. Or, if it does not stay within the channel, I would prefer the market to rally up to Tuesday. This would make the option somewhat cheaper. As well, this would make parameters a little easier to develop, as I would only buy that put option if Waste Management (WM) breaks below $34.56 by Tuesday. But the market does not often give us what we prefer, and I will have to remain adaptable to changing conditions. As this is an event driven trade, I do plan on buying this option, one way or another, at least by Tuesday. Naturally, I will do my best to keep you updated.
Such is the situation that I am looking to exploit with Waste Management (WM). I will be closely observing the price prior to their earnings release on February 16th, 2012. I will be looking at purchasing a Waste Management (WM) put option. Specifically, on Tuesday, February 14th, 2012 I would look at purchase a July put option. Which strike price? Either a July 37 Put, or a July 36 Put, whichever has the greater volume. Of course, I will also keep an eye on the smaller time frames
If I am continuing to look at a market from one week to the next in order to continue to exploit a trend, I will mention that in the newsletter. Thus, if you see me discuss a market one week, and do not see me discuss that same market trend the next week in the next issue? Typically this means that I am not continuing to watch the market. Ok now onto my trading thoughts and ideas
Commodity Market #2 March Soybeans (SH12 or /ZSH2 in the ThinkorSwim Platform): I have intoned on the Week in Review podcast2 and other updates to this newsletter that Soybeans is inside of a larger up-trend. And this is true. Seasonally, soybeans continues higher. But it is not unusual to see Soybeans to take a break around the middle of February. And as I mentioned in this weeks Week in Review podcast, all of the commodities markets were hit on Friday, and hit hard. Soybeans was no exception
So what now? At some point in the next week, seasonal metrics tend to indicate that Sugar will have put in it's top, and could begin to move lower. I will probably be watching the ten minute chart more than anything else for this move, as the one hour chart is somewhat choppy. At the moment, the chart is a little difficult to read for
This pause can at times last a while, sometimes a week or more. So at least for right now, as of this Sunday evening I am going to stand aside of this trend, and simply observe price patterns.
2 Exact Link http://airelon.podbean.com/2012/02/11/week-in-reviewfree-trades-pepsi-earnings-portfolio-management-andforex-possibilities/
Commodity Market #4 March Cotton (CTH12 or /CTH2 on the ThinkorSwim Platform): What to say about the Cotton market? Get long. Seriously, this is a beautiful pattern. March Cotton Daily Chart
As you can see, on Friday, we already began a rally. Hopefully, based on comments last week, some were able to take advantage of this, and end before trading ceased. But I have an advantage in that I understand seasonal and sector divergences, and therefore I favor the Soybean Oil market, over the Soybean market.
I also have setup a specific Forex monitor system. In the ThinkorSwim, I set this up under the Charts tab, on the Charts button. I trade commodity Futures on the Trade tab, on the Active Trader button, as I describe in the video that discusses my platform setup5. I use a four box setup for the Forex chart. But instead of one box being dedicated to the Bid x Ask / Time and Sales screen? I dedicate the upper left hand box to the Currency Futures of whatever forex market that I am trading. So the box setup, goes a little something like this
And that's where I am at at this point, in developing the Forex methodology. So what is the next trade I'm looking at? GBP/USD: Yes, I'm still looking at the GBP/USD trade, and I'm still looking at this to the short side. What parameters is this methodology telling me to look at? Well, the GBP/USD will open up on Sunday evening. I will be looking specifically at this market at 19:00 hours, or 7:00 pm EST for a possible short. That's a little early than I would like. I like to trade closer to Monday. But that's what the methodology is telling me at this time. This tends to agree with what the chart is telling us. We are in the midst of a rebound, but we are making lower lows, and not higher highs. So I will be looking to see if we can get a typical 'Dan' pattern. A rally up, and then when the market stalls, some sort of congestion, and then a break to the down side. S Swing is specifically telling me to keep an eye at the 19:00 pm or 7:00 pm time frame. It's a little early for my methodology, but I will keep an eye on this market at that time. It is important to keep in mind that if we do not make a higher high in this market, and we break below 1.5725(8), then we will be making lower lows, and the trend will have changed in the short term, which agrees with the seasonal metrics. When I short any rally in the GBP/USD, it would be a
S&P 500 Year to Date: +6.655 % AMB Total Portfolio Return Year to Date: + 3.61 % Investing Account Balance: $ 4,054.07 Return / Yield 0.06853 % Year to date 4.032263 shares of PEP (DRIP on Yield is 3.25 % )
4 shares at $63.31 on 11/15/2011 w/ $5.01 Commissions 0.032263 shares DRIP at $66.95 on 1/3/2012
As follows are the new Commodity Futures and Stock Money Management Performance Statistics
$503.49 available from Slush Fund (16.78 % ) Dividend Investing Sister Inception to Date
Stock / Futures / Forex Trading Balance: $10,049.25 ( Return / Yield up +5.851 % Year to Date ) Commodity Futures Balance: $9,973.57 Return / Yield up +5.947 % Year to Date Next Re-Distribution Goal: $10,700.00 Original 3% risk tolerance gives us approximately $282.54 for my drawdown tolerance. $503.49 available from Slush Fund We had one trade last week, that led to a gain for the trading 'sister' accounts, that I emailed everyone throughout ...
Long 1 August FCX August 45 Call from 5.35 on 2/6/2012 Exit 1 August FCX August 45 Call at 5.50 on 2/8/2012 PROFIT - $9.05 on 2/8/2012 (including commissions of $5.95)
$813.69 of this cash reserved for 'burn rate / maneuvering' capital ( 80.59 %) $120.00 of this cash reserved for CD Ladder creation ( 11.88 % ) - One $10.00 One Year CD purchased on 11/21/2011 at 0.60% - One $10.00 One Year CD Purchase on 12/21/2011 at 0.50% - One $10.00 One Year CD Purchase on 1/21/2012 at 0.50% $20.00 of this cash reserved for the first side-pocket purchase ( 1.981 % ) $20.00 of this cash I reserve for the second sidepocket purchase ( 1.981 % ) $36.00 of this cash I reserve for the hedging account ( 3.565 % )
$504.84 for Emergency Savings Getting Paid Fund: $10.00 Total Portfolio Balance: $16,132.69 - Total Inception to Date Return: +7.551 % Return / Yield up +3.61 % year to date) S&P 500 Year to Date: +6.655 %
If you have any questions regarding my personal outlook, or any other comments, please feel free to contact me at dan.shy@gmail.com. I will say that if you have questions about your own trading and you want to ask for my input? Please include your most recent money management performance statistics in any email correspondence.
Until next time, stay safe trade well, and remember that loving other people doesn't cost a dime.
Note: I, the author do not grant this work for wide distribution beyond any single individual subscriber as this publication is protected by U.S. And International Copyright laws. All rights reserved. No license is granted to the user except for the user's personal use. No part of this publication or its contents may be copied, downloaded, stored in a retrieval system, further transmitted or otherwise reproduced, stored, disseminated, transferred, or used, in any form or by any means except as permitted under the original subscription agreement or with prior written permission. The above statements should not be construed as an investment or trading recommendation. Aileron Market Balance is a newsletter that allows subscribers to look 'over my shoulder' as it were, for my own personal specific trading and investing ideas and thoughts for the next week. But they are only thoughts as of the moment of publication, and are subject to change. Any trades or investments that I discuss within this newsletter are simply my own thoughts regarding my own investing and trading outlook. Remember that entering any market is an individual decision. There is no guarantee that I will enter, or have entered any of the trading or investing ideas that I discuss in this newsletter; as larger accounts may require a different strategy as the ones presented here. This newsletter simply contains my trading and investing thoughts for the next week. I personally only enter any market after watching and reading the tape and I trade using