My New Position...

After my failed attempt to add insult to injury last week by trying to buy HWD at $9.99 and selling BAC way before its time, I felt dumb and dumber. So I spent part of my weekend looking at some balance sheets - not many, but just enough to ascertain that there are still good buying opportunities in the market. My biggest criterion: to look for a stock that still has a very big 52 week decline. Due to Santa's imminent arrival, I've got a bullish bias for the rest of the year as I did the whole year. What went down must go up!

So I started off the week with some more market confidence. In addition to receiving an invitation to an interview with a second company, I decided to hop into a new position today. I bought HERO at $2.9695. I initially wanted to get in at $2.50, but then decided: if I don't do it now, I'm never going to do it. I'll be waiting and waiting for the right moment and sooner or later, Santa's going to pass me by. So, I ignored my trading discipline and got in at market, but only invested the original amount I allocated for this position. I have a plethora of reasons for getting into the trade, including but not limited to:

1. the 52 week change on HERO is -39.19%, which means that if the stock market continues to go up this year, the reversal that has already started taking place on HERO will rapidly intensify - with me being one of the main beneficiaries
2. relatively high beta on HERO of 3.04
3. P/B and P/S are both way below 1. In a bull market, sales will start to count. In a bear market, people are more concerned about debt.
4. only has 114 million shares outstanding, which means that this could move as fast as Harry when the bulls take control
5. Insiders have purchased from $2.60 to $2.86 earlier this year
6. last but not least, a good risk:reward scenario... if it hits the 52WH at $5.85, that's about a +97% gross profit. Longer term, HERO was near $40 before Lehman hit. Oil prices continue to defy gravity. If I know miners like I think I know miners, then they're going to start striking whilst the iron's hot - meaning they'll produce more when prices are high. This, in turn, will benefit my shovel seller, HERO.

Shanghai was the most alpha today with a +2.88% move, nearing the 3000 level I have been waiting for. S&P looks slightly droopy on the 5-day and 10-day charts though. Could it be an Andrews Pitchfork in the making? I hope I didn't just buy a top since my portfolio is lagging the market!

-0.29% on the SBA (SBA percentages are slightly messed up as I added some cash to it - probably would have been a bigger decline had I left it alone)

+0.29% on the Roth IRA

Honestly, I'm not crazy about my two interviews. They just sort of make me feel better about having something. So, I promise myself that I'm not going to apply to every job I can find now. I'm only going to go for the ones that I really want.

There, There, Harry...

Harry basically stood in position for the rest of the session, not moving any further south - closing the day at -12.87%. Oh, my love! We're going to get through this - and together, we'll achieve market bliss once again when retail sales come in better than expected after the Santa Clause Rally. Don't you want to fill my order at $9.99?

This year, the US economy created 668,000 net NFP jobs, which means people with jobs will want to buy Made In China stuff. China managed to make it through relatively unscathed, so I'm looking for further growth in China now that job creation is back. Recall I mentioned that I thought China's economy has now reached the point of no return a few months back. Now that the US economy is stabilising, this will add to the global momentum.

This also means that I'm going to have to get myself a new job before the new MBA class graduates in May. I did some fun analysis and if job creation continues at this pace, I may find myself a new job just before the MBAs hit the ground running. If we take the top 10% of all MBA graduates from the top 15 universities in the world, I'm competing against about 4800 people. Not all of them will be looking for marketing jobs. 8-10 six figure marketing jobs are being added on a daily basis. If all these 4800 people look for marketing jobs, I'll have to spend about 11 to 20 months looking for a new job. However, it would be a stretch to say that even 45% of these people have majored in marketing. So let's say they did. If so, then I'd be competing with 2160 people, which means that I could be looking at 5 to 9 months of Do Not Pass Go, Do Not Collect Six Figures, Go Straight To Yale.

I think (and pray) that I'll find a job much sooner. My backup plan is to line up my ducks and look for an internship within the financial services industry once I get back to my home sweet home. I've also got about a year of expenses saved up, so bet your market bottom I've got a trading ego the size of Belgium. LOL.

All my analysis amounts to null today. My dear Harry ran the other direction, leaving me with a pitiful:

-6.22% on the SBA (yes, unfortunately that is a 6)
+0.83% on the Roth IRA

Happy, Happy Weekend my fellow HSFTs / Professors of Finance!

My Prices... They're Self-Righteous...

The love of my portfolio, Harry Alpha Winston, is being sold like there's no tomorrow. Am I going to stand by and do nothing? Or am I going to stand up for my man and try to touch his market bottom with some more crazy prices? I put in a buy at $9.99 even though we're at $12.55 as we speak.

What am I thinking? HWD missed analyst expectations by 2 cents, but Frederic De Narp was clearly a good hire, driving revenue growth by +88%.

If S&P continues to go up the rest of the year, then this is one ride I don't want to miss.

I also view today's news from China's bank reserve requirements as a buying opportunity for commodities in general - especially after speaking with my friend, Tim.

That Grand Ole Bull Flag I was looking at on the 3-year S&P a while back is not over and done with yet. If the bulls get their way, 2011 is going to be one of the most poetic years yet.

Previously On ForexDiva...

... bridges were burned... tables were turned... lessons were learned.

Why, oh why did I sell BAC? It closed at $12.65 today, which would have put me so close to the $12.87 resistance I was watching. If I had only taken profit two days later, I would have been +13.15% in two weeks. Instead, I was content with only a little more than +3%. It was mediocre. It was fraidy. I condemn myself for giving into the bears and yielding to my fears, but now I know better for next time! Resistance doesn't always foreshadow a sell-off. We need to see what's happening with support as well. In this case, it was clearly the bulls saying: "Hit the brakes and fake out the flakes." And I was a flake.

Up today: Harry set a new high and made me sigh. I'm waiting on Harry's earnings announcement and will be monitoring extracurricular price action during Extended Hours Trading.

+1.07% on the SBA
+1.25% on the Roth IRA

I outperformed all major market indices around the globe once again - not that I'm bragging (well, maybe just a little)! Now, I'm waiting for Shanghai to break above 3000 again. Will it happen? Will the GOLs be alpha enough to test the 6000 pre-crisis level on FTSE? They're already so close to levels we haven't seen since Bear Stearns and S&P 500 seems to be holding onto the Lehman level as well. I don't feel smug yet, so I'm not going to sell until my trading ego reaches epic proportions.

Word To Your Mutters...

In the Confessional Booth here and... I got it all wrong with BAC! I own up to it, but it doesn't stop me from being upset. What I'm most upset about is not the fact that I let fear override logic, but the fact that I didn't believe in myself enough. I took the emotional approach. I did the analysis, but I went with my feelings. Based on today's price action, I made the wrong choice yesterday with BAC.

My portfolio has been comprised of mainly financial sector stocks since Lehman hit and I wasn't scared before, so why am I scared now?

But most of all, here's what I think went wrong analytically.

1. Price Action. There was resistance at $11.87, but price wasn't breaking at $11.50. In hindsight, this could have just signified a buyer stepping in who won't pay above a certain price. If we saw any further price declines below $11.50, then I would have been spared instead of seared. As of now, I missed out on at least another +4% gain. Now that's lame...
2. Three fundamental shifts in the market: 10-Year Treasury Yields moved up sharply yesterday to close above a 3% yield; optimism due to tax breaks from our FWFOCH; plus Nikkei continued to hold its own above 10,000.

I failed to see what I'd been wanting to see all year - that exodus from the bond markets that would signal the potential beginning of another bull run, but hopefully it'll be a lesson learned. Given the one step forward and three steps back we've been seeing all year, I may just be setting myself up for more disappointment, but we're Generation Y... we're not just pie in the sky!

So I'm still going to try to buy BAC at $10.50, though I might do better looking into some other stocks that are still trading close to their 52WLs. Let's see!

+0.28% on the SBA
+0.82% on the Roth IRA

Oh, so close! Nikkei beat my Roth IRA by 0.08%...

Up tomorrow... earnings announcement from my honey bee, Harry!

Does Harry Have A Plan To Be My Man?

Seems like it... and I've not only got a plan to take the Series 7 exam so no one ever rejects me for not having financial services experience again, but I've also got a plan to $10.50 people on BAC. Let's see if I can get a sponsor for doing the Series 7, but it sure would beat doing an internship, wouldn't it? Someone invited me in for an interview, but the job will be mainly commission-based. Even though it's a small step in the right direction, it's a big deal for me since it makes me feel like I'm not an abject failure and my top 10(?) business school background counts for something on Wall Street!

As for BAC, I'm out of that position for the time being. I'm not sure if it was the right approach, but I sold BAC today at $11.60 after getting in at $11.18 on 23 November. This is the one I tried to do the Crazy Price Strategy with yesterday. It looks like $11.87 is proving to be strong resistance. BAC has tried that level a few times and it's been proving to be a hurdle it can't surmount. Recall I got $10.99'ed on some unsubstantiated WikiLeaks rumours last week.

I wasn't really paying that much attention to the Pandora's Box that WikiLeaks might open up, but after speaking with my colleague The PermaBear yesterday, I started getting scared. And the more I thought about it, the fraidier I got. So, I did my options analysis and all looks clear on BAC. In fact, calls look promising, but the $11 level looks a bit like a See Ya Wouldn't Want To Be Ya Level on BAC. My question is: will the $9.99 infomercial level I was looking at earlier in the year be in play for BAC - or was that $10.99 telling enough in and of itself? In hindsight, it was clearly a fake-out.

I looked at Insider Activity and noticed Donald E. Powell, a Director, recently purchased 5,000 shares of BAC. $11 has been holding and an Insider purchased BAC at $11.30, so based on these two elements alone, BAC would seem like a straight buy especially since it's been in a downtrend almost the entire year. Yet I'm heavily into the financial sector already and I'd rather keep my moola out of harm's way with support feeling so weak. Yes, I'm going with my feelings here. If I get in at $10.50 again and it tests $11.87 as resistance, then that's a 13% gain - if I manage to get in. If it takes off now like CENX just did after I let it go, I'm going straight in the Confessional Booth.

For now, my 17-day sprint with BAC happened to be only a +3.75% gross profit on a very small position. It doesn't feel like the high beta that I need to succeed, but I'm trying to develop some trading discipline and this may seem like the insane way to go about it. I am gaining some valuable practice here, right, Professors?

+1.73% on the SBA
+2.04% on the Roth IRA

Notice how my Roth IRA is starting to slightly outperform my SBA whereas most of the year, it's been the other way around. Could this signify a pivot point in the market as well? Time will tell.

Red alert on C! I saw some 10 million ask sizes on C today, which at today's prices was about $46.3 million being sold. That certainly added to how jittery I was feeling even though my portfolio put in a good fight.

I'll Be In A Whole New Tax Bracket...

... the 10% tax bracket that is. But if you're stellar at trading, that's not necessarily a bad thing - keeping about 90% of what you make, that is. Today's market action proved that I'm not in that category just yet and the Professors of Finance out there may just get to have their way with me. I did far worse than the global market today.

-0.74% on the SBA
-0.64% on the Roth IRA

I have been researching some $5 and under plays and I found several shovel sellers that hit their 52WHs in January. If seasonality repeats itself, then I'm in for some quick cash if I manage to get in. I'm flip-flopping though. Do I buy now or do I buy after the Santa Clause Rally? Is there going to be a SCR? One month is getting to be too long to tie your cash up in the market. I'm trying to time my trades for quicker gains rather than staying in one sector for an entire year (or three).

I'm also trying out a few crazy prices on Extended Hours Trading. See if you can catch me there.

Are You Positive It's A Negative?

As every major business Web site reported on the poor NFP numbers, I caught a glimpse of the fact that the private sector created 93,000 jobs in November and that was the overlooked number that mattered to me. When I did my NFP analysis a few weeks ago, I noticed that the economy is at a critical level. Net job growth since Bear Stearns has reached 668,000 - equivalent to a little over 10% of all jobs shed since February 2008 - and this is the first December since Bear Stearns where we've seen any job growth. The 39,000 additional growth in NFPs adds to that support level. So, are the bears out there sure this is a negative? If we see another month like June 2010, we'll be back to the psychologically important 1 million level. So your choice: buy now, or pay up later?

On a personal note, I've been actively applying for jobs in the US as well as London and every day, I'm seeing some new six figure marketing jobs being posted to various job sites. On a good day, about 8-10 marketing director level jobs are being posted. On an uneventful day, you'll see a repost of some old jobs that haven't yet been filled.

Talent is a scarcity, and I'll admit I've got talent, but I got rejected with this job I really, really wanted in the financial sector. Apparently, my 12 years of experience means nothing on Wall Street since I haven't had any financial services experience. So my business school education means nothing either. If there's any Professor of Finance out there looking for an intern, let me know. I'm serious here. Don't expect me to get you coffee though. I will test your support and resistance if you'd like.

My short term goal involves getting a job in either NYC or London and then simultaneously doing an internship within the financial services sector so that I can gain some credibility there. Wall Street is going to be back in the biggest way... I can feel it.

After being back in a very big way yesterday, my SBA once again outperformed all major market indices around the world. Woohoo! However, I would have liked it even more if the Roth IRA had followed. I am now faced with a very interesting decision: should I rebalance now or should I rebalance later? The Roth IRA has been an underperformer for a while and it's typically when you get fed up with the market that a rebound is imminent.

+0.67% on the SBA
+0.06% on the Roth IRA


Happy Weekend, Professors of Finance! I hope I'll get an even better report card next week... otherwise, you can tutor me!

A Sight for Four Eyes

LOL. That's not my joke, but I wish I'd thought of it. My portfolio got so steamy it would fog up the Professor's glasses!

Dean Harry Winston led us to victory today, moving up +7.10%. My E*Trade platform says 9 December is earnings announcement time for Harry. I can't wait! What other surprises would Harry have for us? Hopefully, it'll be the carat rather than the stick.

Today's report card was stellar! I once again outperformed all major market indices across the world - but only with one portfolio. FTSE beat my Roth IRA... And brent crude broke above $90.

+5.04% on the SBA (that's really a 5 there in case you wear glasses...)
+1.96% on the Roth IRA


Since ABK filed for Chapter 11, I've been thinking... why not buy the dip on the strongest competitor in the sector that's affected for a short term play? Obviously, it would only be a good strategy if the strongest competitor is actually strong to begin with. If the weak are going down, the strongest will always benefit most and that's where the money is. Let's see if this strategy actually works in real trading...

Who's 10.99'ing Us Now?

The Bwahaha's loud and clear! Even though I had a remarkable day, what I don't get is how an 83 billion EUR bailout spurred a multi-session sell-off whilst an 8 billion EUR rescue programme could cause an across-the-board cover your assets type uptown girl move like this? That's been the theme of the year - fake everyone out both ways.

Thank God I didn't fall for that $10.99 move on BAC, although I was watching that a while back. Recall I even wanted to $9.99 people for some infomercial level success. So far, it seems my $11.18 is still in play and I'm still watching that $12.70 something resistance, hoping for $15 and eventually aiming for a slight break above the ultimate 52WH level of $19.86.

No real trading insight today, just a really good report card, Professors:

+2.93% on the SBA
+2.41% on the Roth IRA

Looks like my portfolio outperformed every major stock market index around the world - for a day! Now, let's see if I can do this a few more times...