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Friday, November 9, 2007

Market 11/09/2007











9 comments:

barkingdognyc said...

just a quick question, what does the p&f mean, and what do you mean about the antlers in the woods. I'll look up the chart when I return in the morning. I appreciate your views on beanieville's blog. Keep it up......

Samson84 said...

I saw your post on beanieville. I'm in same boat as you are, where my average cost for vmw is 99. Wish I cut losses, while I had a profit, but now I don't want to panic sale.

Where did you learn all your technical analysis? I'm kind of new to investing.

fortune8 said...

P&F is a point and figure chart. It tracks up trend and down trend.

Cut and paste this link and bookmark it. Later on you can go back and use the same type of chart for a different symbol.

http://stockcharts.com/def/servlet/SC.pnf?chart=VMW,PWTODANRBR[P][D][F1!3!!!2!20]&pref=G

Columns of X represent the stock going up and O down.

The number in the box represents the month 0-9. A=10, B=11, C=12.

See how in Sep (9), VMW ran to 85 and came back down. It came back down to 82 before it ran up again.

And before that it ran up to 82 before it came back down.

The previous resistance becomes support. Notice how VMW came down to 85 and bounced. It may have bounced; however, the trend has not changed. Not until you get X in columns.

So unless it continues to trend up, it may trend back down again.

Now look at the column in Oct(A) when it ran up to 93 and only fall back to 88 and not 85. It does not have to, but it can.

Let's take an example. VMW is going up, you don't know where it is going to stop. You buy at 122 and it starts falling. How do you know when to sell. It should hold at 114, but it didn't. So you keep the stock because people are saying buy and I respect that. But what is the risk of holding it now? You risk it dropping to 104. That did not hold. Now what is the risk? 96 did not hold, 93 did not hold. You get the point?

Ultimately, it's about managing riks and managing your money.

fortune8 said...

bk,

If you go deer hunting and you have antlers on your head, then what do the other hunters think you are?

http://clearstation.etrade.com/
is a good website for learning technicals analysis.

I don't read the RSI very well. I just look at moving averages and on balance volumes mostly.

samson

I panic sell more often than I should. I sold CROX on Thursday and the next day it bounced up. Not sure if it was short covering or a turn around. Just have to wait and see. Did not want to hold on to it and watch it drop because I had a large position. Another misake.

VMW is a smaller positinon so I can tolerate a little more pain. But not sure how much.

cameraguy said...

I appreciate your views as well, f8. I don't know how much longer I'll be in this game, but I certainly appreciate your insights and commentary.
A quick question. What does it mean to hedge? If you bet both ways, it doesn't sound like you can gain anything, since profits would be taken out by losses, right? Or does that have to do with using options?
Thanks.

fortune8 said...

cameraguy,

beanie was hedging with put options.

http://finance.yahoo.com/q?s=VMWWR.X

The above is a quote for NOV 90 Put as an example.

That is a 42.05% gain from the previous close.

VMW drops 5% in stock, option price increase 42%.

Options is very risky and you can make money fast or lose money fast.

cameraguy said...

Thanks, f8. I'll have to check that out. Do you know of any blogs that cater more to noobs, or is that a short-lived endeavor ;) ! You did mention somewhere that you'd help someone by email, but you'd be overwhelmed if you offered that to everybody.
Good luck to you, this week. I'm holding STV for all I'm worth, and pretty happy with how stoic it seems to be holding when compared to AAPL and VMW. I wish I could meet the other 10 people who refuse to sell it during these times! I feel like I'm in a battle and my buddies refuse to let the price drop.
OK, too many scripts in my veins, but it goes with the territory.

fortune8 said...

camera,

There are lots of blogs out there that will cater to new investors. Don't get me wrong, but I think a lot of people are feeling the pain of this marke, myself included. The retirement funds for a few people I oversee are in mutual funds getting hit by the market as well.

I am not sure what your investment style is. Day trader, swing trader, longterm investor, etc...

Look at VMW put option, up 87% today.

Look at the P&F chart for VMW today.

http://stockcharts.com/def/servlet/SC.pnf?chart=VMW,PWTODANRBR[P][D][F1!3!!!2!20]&pref=G

See how it came up to but never pass 93? That is because it is the resistance. It came down from 93 last time.

See how VMW broke thru support at 85 and 82. The next support is 73.

cameraguy said...

Yes, I get the trend and resistance and support. I just have a lot more to learn about puts and percentages and what that has to do with dates, etc.
I'm wanting to be a swing-trader -- long-term is too off-hand for me, and day-trading interferes with my regular job too much (although I would prefer it).
I was reading an Idiot's guide to daytrading book, but lost confidence in the author when he started mocking the idea that the dot-com bubble might burst (it was printed 6 months before the burst ;)

I'll just keep reading your posts and looking things up.

Thanks.