stock forecast

Markets jump on HPQ share buyback, but what about all the other bad news?

I’m a bit blown away how the market pops open so high, to trade higher, then fall, and finally to look like a last buy back in. The market sure is choppy for the fall time. The majority of the PUT positions I practiced on Monday actually sold out by the end of the day profitable 10-30% up then closing negative. Apple for instance – if you check out the charts it shows many doji-spinner stars showing indecision. The stock doesn’t know to go up or down, but from the fundamentals, 50-day MA, 200-day MA, and current trend it could be moving down much further soon, or at least this is what I believe especially during December.

The last 30 minutes the market shooted up then suddenly sold off I guess the last 10 minutes of that 30 minutes of the day. My predictions would be that the market will drop lower tomorrow if it was a quick sell off because the Fed’s say, “hey the economy still is having slow growth” + Oil going to higher levels + bad home constructions and sales + did I say unemployment is predicted to raise because of the slower growth. Remember when you have slow growth or slow sales especially in the resturant industry you need to start letting people off their usual shifts early. If the store is selling it can’t keep its workers on the clock if the sales are coming in to use the labor. This is just plain economical common sense. So it does make sense that unemployment should rise if sales are down, construction is down, retail sales are down, because employers should be cutting hours short or laying off workers.

Recession? Likely, but technology is still growing getting positive results. Retail is very much sold off way below 50-day and 200-day averages with favorable PEG scores even if earnings are slow (SHLD @ $111 and M @ $28). So I don’t think recession is coming yet, but cycles are starting to change. The Fed can’t keep cutting rates forever and will likely soon raise them probably next year to manage inflation because currently with super low rates we are generating stagflation with slow growth. I maybe wrong, but at least in textbooks usually after the 4th cut on interest rates then rates will start to rise again. Some Financial stocks are really favorable right now (GS @ $212 – PEG of .69 and BSC @ $93 – PEG of 1.10 and book/sales price of $86, it is almost worth its BOOK PRICE!)

As for my options. My DEC 125 AAPL Puts are down around -60%. Not good. It will probably be my last trade for a long time. So if it doesn’t work and Apple Inc. doesn’t fall then I think I will be just practice trading for a good year or until the entire market down trends with a firm trend and the indecision is gone and the decision to SELL SELL SELL in investors eyes will be common commentary on Yahoo! Finance’s frontpage.


Stocks will continue to fall – PUTS – AAPL, RIMM, BIDU, GOOG, C, SHLD, RIG

The stock market had a small run this week, but not enough to make back the money I lost in my huge Nov 07 call positions. I tell you the most annoying thing that can happen to you is when your co-worker rubs your lost in your face. My reaction like any other trader is to want to beat his ass and prove him wrong, but I have to admit he’s totally right. I did lose some big bucks, I told him, and now he’s rubbing it in my face. I suppose I deserve it in a little way just to have this 3rd party in retrospect show me “you are trading crappy and until you prove me wrong I can joke and not believe you” and I probably shouldn’t of told him. Recently my co-worker has been trading real money. He has already told me he has lost -$3500 real money. Of course he is blaming the brokerage website, the stock (BIDU in this case), and everything else except his own trading actions. I think the only real bright future I have going for me is that I can handle the loss and can take responsibility for my own actions. I lost the money because I waited waited waited just to see it vanish when I could of took a big loss, but still had money left over. I also noticed he has been depositing more money into his account after he loses. This is another thing he doesn’t understand about me. I have not deposited money into my account. I use what I’ve got or else you lose more. His wife does not know about this, I’m sure. He is newly married and even though I shared options investing with him I’m not going to take the blame for any of his future dumb actions. He will not practice trade, he doesn’t read up about market history, and he doesn’t listen. He’s very scholarly, but as he will find out it’s not about being smart it’s about trading with as much information to make the probability in your favor to be right and not just trading off “feelings” or acting cocky.

Speaking of “feelings” I have to say I’ve been overwhelmed with them recently. It is almost as my dreams have be yanked away from me. Paying off that $35,000 note would of been huge for me not having that payment making owning that trailer park much easier. So bad decisions create dead dreams, not to say it won’t be a success, but it would have been a better success paying it off and not trading the markets as I did.

As for real estate I’m suppose to be selling my 2bed/1bath home in Hampton, VA for $105,000 down from $119,900 to an investor who says he will pay cash (equity). This will be good so I can finally close on my second mobile home park. Hopefully, God, yes that great universal truth will be at my side on my next deal. I will be putting around $40k down from my home sale.

Oh yes, the stock market. I bought AAPL DEC 125 PUTS @ $1.17 today. I only had less than $1200 left in my account so it cost me just under that for around 10 contracts or a $1000 trade. This is my last money. In Pring’s Technical Analysis for Charting book it shows 3 trends from the years 1987 to 1989. The charts currently for November 2007 match exactly with this historical charts. Even some of the same things were happening like inflation, slowing growth, and selling less and less (such as homes in our case/construction). If this proves correct we just started to fall from the second bearish top meaning it will fall much more. Then supposedly it will have a run Dec 07 into Jan 08. In jan 08′ it will start to fall through 09′ a fall much steeper and longer then what has currently been taking place. If charts stick then I will be watching for short Call plays and longer Put plays. This AAPL Put option should only last until mid-DEC 07′ if charts pull through with all the negative news. Apple is a great company, but many great companies fall with the markets. It is when everything settles the best companies have unimaginable runs such is what happened in 2003 on after the big fall of 01′.

well later -fn


AAPL OCT 170 CALLS sold out up +25%, GOOG earnings

Okay so to finish from a few days ago I bought AAPL calls going up and I was sold out the falling morning for $2.60 up 25%. I wanted to trade into GOOG earnings, but with a small amount so I only traded $1000. Again I was probably being too greedy. I could only buy 1 contract and I did at $10 for GOOG NOV 690 CALLS, but I should of put my GTC order at $11.50 or $12 at the most. Early morning trading the next day the option only went up to $12.60 so if I only put it up a dollar or more I would of been sold out with a 10% profit. I put my GTC order at $15 because I thought GOOG which his $658 would of rose $5 since I was closer to in the money, but I was wrong. I also slept it! I put my alarm for 3:30 AM to get up right when the market opened so I could sell out, but I slepted in an hour and that cost me $300. I sold out at $7 with a $300 loss. I’m actually happy I loss only $300 because if I would of stayed in I’d lost a bit more. This is what is confusing: I bought my option when GOOG was at $639, but my option fell $3 dollars even when in the next morning it was up $9. You’d think my option would of went up with the stock instead of fell. How is this possible? I figured it had to do something with expiration Friday for options. My call option fell $3 even thought GOOG’s stock went up and held at $9 so like $648. I don’t know why my option fell so much but it did. I think for now on I’m not going to buy calls near expiration Friday. They must adjust the price or something. Anyway GOOG earnings should help the stock rise. The Dow drop of -$366 pts is termporary and I definitely expect Monday or Tuesday next week to have a pop and push the market higher after this big pull back.

Stocks I’ve been keeping a close eye on are FXI, GOOG, AAPL, NUE, SHLD, RIG
FXI is due for a correction with the asian markets. Just recently it has fell 18 pts within a week. If it breaks its major trend I might buy a crap load of Puts on it. AAPL’s earnings are OCT 24th and I might play Puts on it because historically Apple during earnings falls every time.
With NUE steel is starting a strong uptrend helped by X. SHLD is just very volatile and I’m looking for entry points since it is going sideways now. Lastly RIG had a peg of .41 does anyone know this? This stock has continually gone up its trend and if does at $112 it will start bouncing back up again to a higher price.


SouthWestern Energy Company (SWN) + Nutrisystem Inc. (NTRI) Forecast

Stock Alert: Southwestern Energy Company (SWN @ $40)

Search back the google chart from 2003 every end of Jul up to now and the only year that was not consistent was year 2007 when instead of moving up in Aug it moved up in Oct. My bets are on meeting its $50-60 price target before 2008. All profits are up, revenues are revised with previous shale mill up and running again, and its PEG for 5 year is down to 1.06 showing more value in the current price. I might also say its only receiving Buy and Buy with higher and higher target estimates with Oil moving higher and higher in price this company should still considerable profit from alternative fuels. Southwestern Energy Company convinces me through technicals, news, analyst upgrades, and low PEG with high PE and higher earnings predictions that this stock will move higher. If I’m write I should be a bit wealthier.

If you are thinking about buying Calls for Nutrisystem Inc. (NTRI @ $56) you are probably thinking right. I don’t own any options right now with NTRI, but waiting for charts to signal a buy after some movement. The PEG is at a staggering low .68!!!! Talk about value with growth and profits. I bought CALLS on NTRI when the stock was around $47 and sold after it hit around $51 because it was just jumping up and down. Now I kick myself in the balls seeing it hit over $65, but I sold and made some and “won the lottery” in the system. Now with the PEG which is my main predictor where or if they stock goes higher is in a great zone under 1.00. With summer trading I feel I should hold out until at least Sept. If I see some buybacking in it then I’ll buy Calls then. Right now the market is being weird as usually. It’s august a time I try to buy calls and lose all my money because I didn’t buy Puts.

What kills me even more are the gas drillers like NE and GFE and RIG which all PEG’s are under .40 and some .28!!! Almost book value growth to earnings. And there forecasts for earnings are higher then the PE’s shown which is a very good thing. I’m just waiting until I’m complete sure where I think the stock will go. RIG a hot stock is currently getting hit and its broken through a major trend pushing down. NTRI is a weightloss stock. I suspect nothing more then yoyo stock holders.