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What Do We Do Monday Morning?, Issue #329 - Art of the Hedge
July 21, 2012
Jul 23, 2012 - Issue #329
Art of the Hedge
Art of the hedge. Instead of win big/lose big, hedging lets you win big/lose small or not lose at all. Big difference.
Institutional investors hedge their risks using options. Shouldn't you? Many individual investors have made the effort to learn exactly how to do just that by taking online courses from IONOPTIONS Ron Ianieri (myself included). Money well spent.
MarketClub 'Trade Triangle' technology is all about timing. It will keep you from making serious mistakes. Their $8.95 30 day trial lets you explore every weapon in their arsenal of goodies. Learn to anticipate important market signals ahead of the crowd.
MarketClub Primary Trend (monthly algorithms) on DJ-30 stocks:
UP (15) 50%:
AXP, CVX, DIS, GE, HD, JNJ, KFT, KO, MMM, MRK, PFE, T, TRV, VZ, WMT.
DOWN (15) 50%:
AA, BA, BAC, CAT, CSCO, DD, HPQ, IBM, INTC, JPM, MCD, MSFT, PG, UTX, XOM.
Dow Dogs (10 highest yielding):
T, VZ, MRK, PFE, JNJ, PG, DD, JPM, GE, INTC.
Dow Small Dogs (5 lowest priced among the 10 highest yielding):
T, JPM, INTC, PFE, GE.
As of 6/29, corporate stock earnings yields on the S&P 500 (SPY) still above corporate bond yields (7.34% vs. 1.96%) thus favoring corporate stocks over corporate bonds 3.74 to 1. Keep your eye on earnings yields. That's what you're being paid to take risk. Dividend yields are only part of the picture.
Obama spends all his time fund raising and playing golf, not governing. He only cares about getting re-elected. Nothing else matters to him. Obama mocks entrepreneurs and capitalism.
Democrats who couldn't wait to have their picture taken next to him now avoid him like the plague and are boycotting their national convention.
Countdown till 2012 elections: 15 weeks.
W. D. Gann, a keen market observer, although not an astronomer, nevertheless, was fascinated by the apparent coincidence of important market 'pivot points' and astronomical dates. Theories exist for estimating time and price of important market turning points but astronomical occurrences are computed with mathematical certainty.
There is no logical reason why these occurrences should coincide yet, empirically, they have.
The 'Full Moon' and 'New Moon', among others, have been cited. Therefore, one might be well advised to be aware of their occurrence. Note: The first 5 business days of 2008 concluded on a 'New Moon' and we all know how that worked out. Coincidence?
7/3 Tuesday - Full Moon.
7/19 Thursday - New Moon.
During the next two weeks, the following DJ-30 components report earnings. Keep a sharp eye out for price swings, up or down, (possible trading on 'inside information'?) leading up to 'earnings day' (Subject to revision):
7/24 DD, T.
7/25 BA, CAT.
7/26 MMM, UTX, XOM.
7/27 CVX, MRK.
Dow score card for the week ending 7/20/12.
DJ-30: 12822.57 +45.48 +0.36%. The Real World (arithmetical) DJ-30: 56.48 +0.21 +0.36%.
UP: 15, Down: 15.
Trends (weekly charts): This is the subjective part.
Rising (Generally Higher Highs/Higher Lows) 8 (+1) 27%:
+*BA, +*CVX, +*DIS, JNJ, KFT, +*MMM, +*PFE, +*XOM.
Consolidating (Generally Lower Highs/Higher Lows) 18 (+3) 60%:
+*AA, +*CAT, +*CSCO, +*DD, GE, +*IBM, +*INTC, JPM, KO, -*MCD, -*MRK, +*MSFT, -*PG, T, TRV, UTX, -*VZ, -*WMT.
Declining (Generally Lower Highs/Lower Lows) 4 (-4) 13%:
-*AXP, -*BAC, -*HD, HPQ.
+/- denotes change of direction.
* denotes change of category.
Comments? Ideas? Feedback? Let me have it, right between the eyes! I'd love to hear from you. Just reply to this zine and tell me what you think!
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