You need to understand these things before trading (I was scared to death to make my first trade...) Say you buy a stock XYZ for $1000... you hold it, make a profit of $100, and now you want to sell it. You sell it for $1100. This is now like money in limbo until it "settles" which is 3 days later - you don't have it yet. But you want to buy stock ABC now. If you're out of money in your account, you'll be using money you won't have for 3 days to buy this new stock. They'll allow it, but selling the new stock before your previous trade is settled in this scenario is considered a no-no.
Any of you guys looking into commodities/precious metals? At least dipping a toe in for the rest of the year? I keep seeing these things pop and people saying there could be a short-term rally in them.
so robbie, back when we were under 8000 the last time, you said things were going lower. but a few pages back you said the government interventions had probably put a floor under the market for now. so do you not see us going under 7500-8000 any more? at least not for the near term (6 months). and i know you and JeopardE were talking about a short squeeze, and on fast money guy said if the S&P went over 900 (this was a few days ago before it did), it would go to 1000. and now i hear more people talking about a big bear market rally. but is there much threat that we're just going to be flying way past 1000 here and not coming back? i just got my dad out of the market today (he had actually stayed out from almost 1400 down to about 1000, but got back in with SSO and way too early and had lost a decent chunk) and i don't wanna end up making him take all these losses (not that he only did it b/c i thought it was a good idea) when he could be getting a gain if he just waited, but the situation just seems way too dangerous for retirement money to be on the line. thoughts?
First thing I'd tell you is that it is rather difficult to make these forecasts. I believe my forecast has a higher degree of probability than average, but things can go horribly wrong (and often do). In the past few months I have seen bulls get slaughtered, and I have seen over-eager bears get creamed as well (latest case is the famous trader called Atilla). Based on my technical analysis of the market I do believe that we are looking at a medium term rally that will take the S&P possibly all the way to 1100. I think there are a few mitigating factors -- the auto bailout being the most immediate, how Obama's infrastructure plan unfolds and the housing market. In my last detailed analysis I showed evidence that we may have in fact bottomed in housing, and today I saw some encouraging news there: apparently the TARP modifications have resulted in a 110% increase in mortgage applications in the past week alone. That all said, I doubt we have seen the worst of this economic crisis, and it is still highly likely that when we get up around 1050-1100 we will see another major market crash. Having said all that: this post is for entertainment purposes only, and should not be taken as investment advice.
Anyone have any suggested reading? I'm particularly interested in how to identify potential stocks and how to identify buy and sell points.
jeoparde, are you into SSO now then? Also, JASO tanked at the end of day/after market today.. any thoughts on if it will come back up or if it's in trouble? I did a little reading but I'm not sure.. I have some at 3.05 and wondering if I should just drop it in the morning for a decent loss..
I bought a ton of SSO last month at $29.85, rode it all the way down to $18.00 (didn't sell any), and still hold my original position today. At this point, I'm just waiting for it to reach $30 so I can get out (and hopefully get back in in the next few months at a lower entry point).
I understand that. That's pretty much what they said online. But I'm wondering what's the deal with the transaction taking 3 business days for the money to "settle"? Why can't this just happen instantaneously?
Because you invested money into an actual company, so you have to wait to get it back. Your broker is only the middle man.
This isn't the case - when you buy stock on a stock exchange, the company gets no money. It's an entirely secondary market - the company isn't affected at all It's a time period allowed for the transaction to officially complete. Records have to be changed, and historically, not all trading was/is done online. So there is a 3-day period specified for the broker to complete the transaction.
I see that JASO cut their 4th quarter outlook. I was dumb enough to buy JASO at $6 right before the solars all blew up in Nov, but still managed to make a nice profit by averaging down at $2 (I think their cash on hand puts them at $2 a share). If you're patient you'll probably see $3 once another solar bounce occurs. Otherwise you can take your lump and try to make it back somewhere else.
I'm hoping that it plays out like that. I'll probably start getting pretty conservative once we start peeking above 1000, and prepare to position myself for a ride into the cellar
FWIW, I suspect our big oil bounce is about to happen ... noticed on one of the blogs that we have a doji on the USO daily chart, with heavy volume. I'll probably be loading up on DXO in the morning. An oil bounce should take other commodities and solars with it to the upside.
DXO did 10x it's normal volume today. I'm kinda kicking myself for not reloading again (my buy order missed by 2 cents) after dumping my $2.60 shares @ $2.95 today.
Also ... I'm surprised I haven't seen this pointed out anywhere else, but the 30 minute and hourly charts so far this week are forming into a classic bull flag pattern: a gradual, slight retracement of the previous rip up, but with strong support (for the SPX, at 887).
well things develop very quickly in this market where the rules are constantly changing. i still believe the market is overvalued and will go lower over the next year but for now the govt is willing to step in and prop up anything that is ready to fail so that helps put a backstop on the market...even if it is faulty backstop in my eyes. there is no threat that this is the bottom and your dad is missing it. i would continue to avoid the overall market and if you want to get your dad into anything then tell him to look to buy energy related stuff on deep pullbacks (like if oil gets in the 30-35 range). also i believe averaging into TBT (the ultrashort of the 20+ year treasury etf) when it gets below 40 isn't a bad idea either. yields will not fall forever with how much debt we are issuing. it is a very odd situation where there is huge demand for u.s. govt debt, due to our perceived safety, at a time when we are selling massive amounts of treasuries and have plans to flood the market with tons more in the near future. to summarize...nothing points to this rally being the low of the bear market.
yes we are setting up nicely for a nice rally into the new year that should get the crap sold out of it. i really hope this dumb buying continues because i am killing it by shorting the excessive strength when it presents itself. and also a lot of the buyout plays i am in should close before the new year so a less skittish market helps ensure they get done.
