TRADE UPDATE – OVTI
Took a 2.60 point profit on OVTI short at 29.71. All out. Original trade here: http://www.zenpenny.com/?p=1034
TODAY’S THOUGHTS
"Today's Thoughts" is a nightly email sent to Zenpenny "Fire" level members outlining different thoughts regarding the markets and our positions. At times, I will post a copy of the email to our site for blog readers. Here is tonight's edition: I think it's important to speak tonight of what is going in the overseas markets right now. The Nikkei is essentially crashing, posting a loss of 12%, following a loss of 6% during Monday's trading session. Dow Futures are currently down 300 points. It's tough to see the Nikkei putting up any fight given the disastrous circumstances facing Japan. Our portfolio is well insulated from this type of move down and yours should be too. Our only short-term trading position is a short position, which I may cover if we gap down excessively tomorrow morning. The remainder of our positions are long-term investment positions that have minimal correlation to the general market. There are many changes that will come out of the destruction that Japan is facing. It is after all, one of the largest economies in the world. They hold a significant amount of US debt. They are also a key ally for the United States in Asia. The ramifications of what is happening there and the changes that take place as a result will be far reaching. One of the earliest assessments one can make is that nuclear energy will come under massive scrutiny following this disaster. I cannot see any nation with a semi-conscious population allowing for a nuclear power plant to be built. Even those that in the process of being built may come under attack, with plans being changed, leaving them uncompleted. The alternatives to nuclear energy must be considered. Three common alternatives are coal, solar energy and natural gas. - Coal has as much environmental opposition in developed countries as nuclear power. The cost of coal itself has increased dramatically over the past few years. - Solar energy is a viable alternative. I believe it will see greater use over the long-term. At one point, perhaps, becoming a widespread source of power for developed nations. There are already projects all over the world that are planning for widespread use of solar for future energy consumption. From Desertec in the Middle East to the Blythe solar power project in California. - Natural Gas is also a viable alternative as it is the cleanest burning of the fossil fuels. We have an enormous supply of it here domestically. There are also massive supplies throughout the world, which may explain why the price has been floating at multi-year lows in the futures market. However, this may...
THE GUN – NO NEW UPDATES
Trading opportunities across all sector remain sparse. The risk/reward equation that we search for in order to enter trades simply doesn't exist with all the chop we have seen recently. Ranges are expanding. Risk is increasing. We'll wait it out. Still in OVTI short, of course.
7 CHARTS TO KEEP YOU IN PEACE AND NOT IN PIECES DURING THE WEEK AHEAD
Whenever the market situation sends confusing, mixed signals, I like to go weekly. By going weekly, I mean zooming out on things a bit and looking at the price action from a weekly basis. When I started reviewing the charts this weekend, I noticed a ton of crosscurrents. The weekly view will hopefully help clarify some of the crosscurrents for everyone's benefit: (click on the charts below to...
TRADING PSYCHOLOGY 101: RECOGNIZING AND CONTROLLING EDS
This article also featured on TheStreet.com The battle with yourself is never-ending. The more you become involved in activities that tend to press your emotional weak spots, the more you will experience inner-turmoil as you are delving into an area of the psyche that is uncomfortable being in the spotlight. Activities that involve speculation of any type, whether in the stock market, poker, sports handicapping or horse racing will involve diving into those emotional dark spots (EDS for the purposes of this article) on a fairly consistent basis. In fact, what is at the core of many traders or investors frustration during their first 5 years in the financial markets is the fact that they are not able to resolve the inner-conflict that develops when you probe those emotional areas that enjoy remaining shrouded in darkness. I'll give you an example of this conflict to illustrate the point. Let's say that you have Joe Investor. Joe enjoys trading and investing in the stock market on a regular basis. He has been at it for a number of years with mixed success. He is cognizant of risk, which has enabled him to avoid any stupendous blowups to date. He finds himself consistently getting into positions too late and out of positions too early. He trades based on a combination of technicals and fundamentals. Day 1: A trading opportunity arises in the stock of XYZ corp. trading at $15 per share. Joe Investor decides that there is an opportunity for 20% upside and takes a position at $15 per share during the first hour of trading. At the market close, XYZ corp. is trading at $14.90. Although it would have been nice to close the first day with a profit, Joe Investor remains comfortable with the trade. He goes to sleep that night thinking of how good it is going to feel when XYZ is trading at $18 per share. Day 2: XYZ begins drifting downward right from the open. This is beginning to make Joe uncomfortable, but nothing that is causing him a great deal of concern. Past mid-day, XYZ is trading at $14.35. The pressure is beginning to build on Joe Investor. His mind begins accessing his EDS (remember? emotional dark spots) creating great turmoil from within. Despite this inner-conflict, Joe takes another look at the chart and sees a great deal of support around $14.25. He sees that the CEO of the company was recently out with some very positive words. He takes solace in these two facts. He goes to bed that night thinking of how nice it will be to be able to get out at...
TOP 3 MOST POPULAR POSTS FROM THIS PAST WEEK
1. RESEARCH REPORT - NEW POSITION - 7 PAGES 2. 3 CHARTS FROM A WEEKLY PERSPECTIVE 3. THE LAST BASTION OF HOPE FOR THE NASDAQ IS BREACHED
MAMA ALWAYS TOLD ME THERE WOULD BE WEEKS LIKE THIS
To quote Hyman Roth in the Godfather 2, "this is the business we've chosen." As such, you're gonna have losing weeks. I lost money this week. I know a lot of other people did too. It was a rough week, no doubt. Over the past 16 years of having bad weeks, good weeks, followed by more bad weeks and then some good weeks. I have developed a routine to get me through the bad weeks. There are a number of things you can do to feel better in one hour or less: 1. Go to the gym. I can't emphasize this one enough. I usually spend two hours at my gym. I do cardio, weights, steam room, jacuzzi, and shower. Between the time I arrive at the gym and the time I leave, the difference in my personality, attitude and mind are night and day. It has never failed me once. I go in a negative, mouth-breathing heathen and come out a peaceful, joyous hippie. 2. Spend time with a friend. This business is one that tends to isolate you. If you are an independent trader or investor, odds are you spend most of the day alone. You need to get outside of your own head. The best way to do that is to get inside someone else's. Taking just one hour to sit down and talk with a friend about anything will go a long ways toward getting you out of that negative space. 3. Read a book. Not a book about the financial markets! Read books about life, spirituality, inspirational figures. I can't tell you how many times I have turned to books during periods of distress. No matter the severity, books have always helped. 4. Find a peaceful place to just sit. If you have a nice beach close to your home, go hang out there for awhile. If you have a peaceful lake, hit it up. If you have some mountains that take you to that place, go there. Any place other than your office or home. You won't find your peace in the places where you spend most of your days. Go to that place where every time you go that voice comes into your head saying, "I should really spend more time out here." 5. Write. I love writing. It puts me in a zone. I forget about everything during the period of time I am writing an article. Once it starts flowing, the words just pour out. I often times don't know what I'm going to write. I have a general subject in mind and then it just takes shape. It's like...
THE LAST BASTION OF HOPE FOR THE NASDAQ IS BREACHED
What is it about the Phase 4 types that makes them LILO? Yeah, LILO. That's "last in, last out". They always love to pile into the networking names and they are always reluctant to sell them until the markets have broken down completely and totally. Remember 2000? Phase 4 types were bidding up networking names as the whole tech universe was getting sucked into Greenspan's black hole. Anyways, here is a chart of the PXQ (networking index ETF). It's looking like the Orcs have penetrated the fortress and are about to have their way: click on the chart below to...
TRADE UPDATE
Adding to PSTR at 5.05 - 5.15. Research on the company here. This is a long-term investment for us...I am happy to be adding at these prices.
