6-11-08:  Using options, we've more than doubled our trading accounts since mid-March using the trades we give away for free in our live email updates.  The trading history can be seen in the portfolio section.  The markets have seen a lot of volatility over the past week, primarily driven by fluctuations in the price of oil.  While supply and demand have played their role, recent heated speeches between certain countries in the Middle East have played a larger role in the recent upward price spike.  Our choices have fared well for the most part.  We closed out our KWK options position for an 8.8% gain on the stock - and a 37%+ gain on our Jan '09 Calls.  The last two days have been difficult, and we closed out CALM for a small gain.  This was done reluctantly to create a larger cash position, and in the end it was the right move.  Still, CALM is a very compelling stock.  It is the largest producer of eggs in the U.S., and the only publically traded egg company.  When the market makes a clear interim bottom (could be soon), we're looking forward to reestablishing a long position.  DRYS has moved against us, but its lower price is only making it more attractive.  We may double up on this one when the time is right, or consider purchasing an industry peer, NM.  If you have already signed up for our free mailing list, you will receive these trades live.  If not - please sign up from the home page.

5-22-08:  The SRS and DXD positions proved to be quite profitable in a rather short period of time.  We entered DXD on Monday within 15 minutes of the best price of the day, and had entered SRS on the Friday before at an excellent price as well.  There may be more left to run but we're going to close the positions today at the market's opening bell.  We're also closing SD and taking our loss now.  If oil continues past $135/barrel to $150/barrel, our short position in SD will deteriorate rapidly.  The ETF traded as DBA will also be purchased - one of the few issues we feel can be purchased safely in this presently uncertain market.  DBA is an agricultural ETF that has fallen a bit lately in part due to falling wheat prices.  The current global food shortages are not expected to subside anytime soon, and pressure on wheat, sugar, corn and soybeans should continue to mount.  These are the four commodities that form the basis for DBA's price.

Since mid March, the DOW has risen approximately 6.8%.  In the last two months, our trades have produced a whopping 75% gain.  Not 75% annualized, but an actual 75% gain.  Look at our portfolio page one may find this hard to believe based upon the disclosed returns.  Our use of options has magnified those returns many times over.  We only publish the straight return of the stock, not the traded options.  A recent example of this is our trade of RIG from May 14 through May 19.  A brief trade even by our standards, we entered our option positions while RIG traded at $151.20 and sold at $162.51 a mere five (5) days later.  That trade alone generated nearly 7.5% in only 5 days.  We purchased the Jan '09 $140.00 Call instead of the stock for $2650.00 per contract - and sold it in those same 5 days for $3410.00.  That gain is over 28% (almost four times the stock's gain), excluding trading costs.  Yes, the volatility of options are higher than stocks, but the rewards can be much greater as well.

While we're on the topic of oil - yesterday top oil executives were paraded in front of some members of Congress to 'answer' for the high gasoline prices.  "People listening just don't get it ... when demand isn't going crazy, why are prices going crazy?" asked Sen. Herb Kohl, D-Wis.  You see Senator Kohl, Democrat from Wisconsin, the answer is multi-faceted and goes far beyond the supply/demand issues.  We have a central bank that's printing money out of thin air and creating inflation.  We have environmentalists preventing America from drilling offshore and in ANWR to improve the supply/demand issue, and finally we haven't built a new refinery in over 30 years.  So, dear Senator, I'm afraid it's YOU that doesn't get it.  Fearing that Sen. Kohl's superlative ignorance (or possible intentional obfuscation of the truth) would steal his thunder, Sen. Dick Durban, Democrat from Illinois, childishly asked the oil execs "Does it trouble any of you when you see what you're doing to us?" Senator Durban, please look in the mirror when you ask that question. If anyone is doing a disservice to the American people regarding this matter it's Congressmen like you that vote against real solutions and then pass the blame on to the oil companies......

We're in a few positions at the moment, and our closeouts tomorrow should give us an ample cash base to make a move at the next market extreme.

5-16-08:  Although we only recently took multiple long positions, we have decided to close them at tomorrow's opening bell.  While they are all strong picks, certain general market indicators suggest a downturn is at hand.  After we sell RIG, OI, FDP, PRGO and TKC at the open, we will analyze the market further and possibly take a short position in SRS.  Those on our free mailing list will automatically receive our course of action.  If you haven't already, please join the free list on the home page.

4-25-08:  We have placed orders to sell QID at the opening bell.  The futures markets are rising strongly, most likely due to Microsoft's gain.  It appears that the market may not be ready to sell off yet.  We are holding our other short positions as we believe they still have a greater opportunity produce profits.  Since QID is a general market ETF and the general market is rising (moving against QID), there's no point in holding out.  We can always re-enter this position at a more advantageous time.  We do have some concern about our short GM position.  Ford's good earnings day translated to a windfall for GM.  It's hard to believe that a company with such severe debt could rise at all.  However, it must be acknowledged that even companies with severe problems can still rise against the odds.  GM's price is about half of what it was six months ago, so obviously there are investors that understand its weak valuation.

The market's signals have been meandering a bit, probably because of various small surprises in the recent earnings reports.  Maintaining a large cash position will allow us to make a big move when the time is right.  Fundamentally, the Fed continuing to print dollars is weakening the currency and at some point the market will reflect this.  Commodity prices have pulled back off of their highs in most cases.  Technically, they may have further to go, but from a fundamental standpoint they should do nothing but rise.  Worldwide demand is increasing for resources, our dollar is being devalued, and these trends should continue for some time.

If you've missed any of our trades, it's probably because we usually announce via email before they happen.  Please return to the Home page and sign up for the free mailing list.

4-6-08:  Most of our long positions have been closed, showing an aggregate profit, albeit small.  In this wild market, a small profit is better than losing your shirt, which is what a lot of traders are experiencing.  We are executing some trades on Monday to short side of the market.  We recently touched the DOW's 12,800 support/resistance level, and pulled off of it by 200 points.  There is a strong possibility we could enter a sideways pattern for the next half year or so, where the DOW trades between 12,800 and 11,700.  Of course, such predictions can be easily thrown off course if there is either major governmental/Fed intervention, or more surprises like the Bear Stearns debacle.  Speaking of investment banks, our first new short this Monday will be Morgan Stanley (MS).  Additionally, we are selling short NCI and PLCE.  We are also buying some UltraShort ETF's, SKF and SRS.  For those that like options, we are substituting the SRS trade with puts on IYR for more leverage.  Our choice is the Jan '09, 75 strike, symbol ZPEMW with a limit order of $12.20.  We'll most likely trade options (puts) on some of the other positions as well, such as ZYTMD, the PLCE Jan '09, 20 strike, with a limit offer of $2.70.  Also, MS's Jan '09, 60 strike put, VWDML, with a limit offer of $15.10.  We will be using 20% trailing stops on the stocks, and 50% trailing stops on the options.

For those without a margin account or the ability to trade options, the best bet is some large long positions in SRS, SKF, and even DXD (a double short on the DOW).

3-12-08:  We just closed out our last short position from the prior round of buying.  Most positions were closed in positive territory.  Our normal move here is to go long.  Yesterday's 400+ point gain was the result of more Fed action, and not primarily the result of technical indicators (market was getting oversold).  While technical indicators are suggesting this is a full rebound, we question the "authenticity" of this upward move and do not know if it can be sustained.  In times of such uncertainty, we remain in cash or buy what we feel is an anti-inflationary ETF such as SLV, GLD, DBA, DBC, or DBB.  At the moment, however, we feel that all of those ETFs may be at or near their tops, so we will remain in cash until we have more clarity with respect to the general market trend.

3-1-08:  February 2008 saw the DOW drop another 3.2%.  We managed to squeeze a modest +2.0% from a rather unpredictable market.  At one point during the middle of the month our margin account trading had swelled to +19% before profits were returned to the market.  January and February of this year have proven to be some of the most volatile months traders have seen since the tech bubble burst.

One thing that has made this a particularly difficult market to trade is the constant novel intervention from the government, the Fed, and even the companies themselves.  No amount of fundamental and technical analysis can predict a surprise rate cut from the Fed.  Nor can it predict a consortium of banks plotting together in an effort to save their own hides from the mortgage crisis.  But that's exactly what has been happening, and unfortunately it is usually to the detriment of our trades.

This new heightened level of activism throws a wrench into the system.  Many would argue it's for the good of the market and the investors.  Their may be some truth to that.  Others believe the intervention is only prolonging the problem and not allowing things to "get worse before they get better."  Whatever the long term end result will be in unknown at this time, however the short term result is extra twists and turns in the market.

For us, February ended on a high note, keeping us positive for the month.  We are currently short and  feel the market my finally make a move down to the 12,000 to 12,100 level.  We believe that aggressive traders should maintain short positions at this time.  More conservative traders can play the 'inflation card' if they prefer.  There is no doubt that inflation has been rising and should continue to do so.    The Fed has signaled more rate cuts to come, which helps create additional money to the overall supply.  It's very simple:  More paper money, not backed by gold or silver, contributes to inflation.

The thing we know about inflation is this:  Not only is it a near certainty that it will continue, but nearly any action the Fed or Government plans to take at this time will increase it, not prevent it.  Therefore, traders that may want move away from active trading can buy and hold certain ETFs that are prone to perform well during inflationary periods.  These include:  DBA, DBC, DBE, GLD, and SLV.  These ETFs play off the prices of individual hard commodities like gold and silver, or baskets of commodities like agriculture and energy.  DBC is large, generic basket of commodities.

We are not moving our portfolio into any of these at this time as we wish to remain short in certain issues, but if we were in the mood to be less active these ETFs would be a great place to sit and wait while the rough patches in the market work themselves out.

2-11-08:  Tomorrow may be a positive day in the market, which would most likely reverse the current bearish trend.  Because we suspect we may be close to a reversal, we will tighten all of our stops to 5% (trailing).

2-7-08:  Today we closed out a short position (IFX) that we entered only yesterday morning for a profit of 15.7%.   Not bad for less than two full trading days!  It's easy to find out about trades like this beforehand.  Simply join our FREE email alerts from the Home page and receive periodic updates.

2-5-08:  Subscribers to our FREE email alerts were notified mid-day that we shorted HBAN and closed our SLV at the market open.  We consider the SLV an "off the books trade" that was a substitute for cash, so we're not including it in the portfolio section even though we profited.  Today was the kind of day we've been waiting for.  Most of our technical indicators tripped, indicating a strong general sell signal.  The question always lingers whether or not this is the beginning of a true interim downtrend or simply a negative blip in the big picture.

Enough negative news exists that when combined with the indicators, points strongly to a new bearish trend.  Accordingly, at tomorrow morning's opening bell we are selling short RWT, XMSR, JRCC, IFX, and LZB.  This is in addition to the HBAN that we already shorted today.  All stocks will utilize 15% trailing stops.  As of this writing, the Asian markets are down nearly 5%.  We may get a bullish bounce after a day like today which could harm short positions, but this is a chance worth taking.  The market could move down 750 points in the coming weeks to retest the recent lows in the 11,500 range.

2-2-08:  We're still holding onto the precious metals (actually, SLV) and will continue to do so for a short while longer.  The governmental and Fed intervention has lifted the markets off their recent lows, and I expect we'll see the DOW break 13,000 and possibly pause in the 13,100 to 13,300 range.  Once there, it would not be surprising to see the market become overbought and signal us to sell short.  Though there probably is a little more upside left in this interim bull run, we'll wait for the strong indicators to make our next full move into equity positions.

1-24-08:  The surprise rate cut earlier this week and the new stimulus package are definitely "working" in the short term.  The market has seen some recovery.  The upcoming Fed meeting at this end of this month still leaves major questions as to what they will actually do, and how the market will behave.  There are still hundreds of billions of dollars in adjustable rate mortgages waiting to unwind and pounce upon unsuspecting borrowers.  Such loans may raise house payments by as much as 100%.  We still have a ways to go......

As mentioned in our email bulletins, the best thing to do right now is to remain in cash until the meeting is over and the unknown market reaction transpires.  Also mentioned in the email alerts, those traders that wish to have a position other than cash can consider SLV or GLD - the silver and gold ETFs.  The recent rate cut and the possibility of more cuts to come will further devalue the U.S. dollar.  This should ultimately cause silver and gold to rise in price.  This is not an official trade we're making.  We're just treating this as a hedge against all of the chaos out there.  Another nice alternative to the precious metals ETFs is an agricultural ETF called DBA.  This ETF has performed well through the recent turmoil.

1-16-08:  What a difference a week makes.  Massive problems in banking have halted the Dow from moving upwards.  Today we stopped out of ATW and NE, but added CALM and FSTR at the market.  The Dow is bouncing off a strong support line and we believe upward movement in the market is more likely than downward movement, considering the expected upcoming Fed action.

1-7-08:  That's the way to start the new year:  Up 12% (with help from margin).  While the talking heads groan about the worst start since 1932, our double-short positions racked in the profits.  For those without margin accounts, QID would have actually outperformed the basket of stocks, rocketing over 13% since we discussed it on 12-30-07.  Today we covered all short positions and went long on PGH, FCX, ATW, NE, CIB, and TM.  For those on our free mailing list, you were updated today as the trades were being made.  If you are not on our list yet, please go to the Home page and enroll.

12-30-07:  We are selling ALL OPEN POSITIONS at tomorrow's open.  Market orders have already been placed so they hit first thing in the morning.  There is a market bias to the down side, partially instigated by last week's political problems, and partially due to expected selling pressure for tax purposes.  The market is in a precarious technical position and it's time to close all longs and add some shorts.  We are adding the following six short positions immediately after closing our longs:  PDS, PHM, RDN, NCC, LEN, SLM and WM.  15% trailing stops will be used to cover these positions.  If we had not had a margin account and we were not able to short those stocks, putting the whole account long on QID would have the effect of shorting the market (the NASDAQ specifically).

12-27-07:  We sold RCI for a 6.2% profit in 16 days - annualized to about a 141% gain.  The markets are down today primarily due to a political assassination.  We're going to take advantage of this pullback and add SIGM at $54.65 or better.  Our "clear favorite" from yesterday, EXM, is currently up 3.5% today despite the negative market conditions.  Stocks that rise in big down markets are really demonstrating their strength.  Men's Wearhouse (MW) had also been in decline since we purchased it, but today it has risen slightly.  This is another positive sign for this stock suggesting we may have hit its true bottom.  UPDATE:  MW finished down for the day, but it still appears to be at the tail end of its double bottom.

12-26-07:  We are selling RCI at tomorrow's open.

12-25-07:  We're concluding our primary buying phase by adding EXM, STX, and NOV at the market using 25% trailing stops.  ACH should also be added using a day limit order of 55 or better with a 25% trailing stop.  If we could add only one more stock, EXM is a clear favorite with STX in a close second.  Of our 13 current selections, were up on 11 of them.  MW and ALV have lost some ground but seem to be demonstrating reasonable recovery at this point.  Holding them should prove to be the best move at this point.  Other selections such as VSEA, PCU, and HDB have had some serious short term positive gains.

12-21-07:  We added LPL mid-day at $24.95 using a 25% trailing stop.

12-21-07:  China's rate increase did seem to dent their markets.  In hindsight we wish we would have picked up LFC and PTR on the 20th, but they are still buys at the open.  Most likely they will open higher due to overnight trading in Hong Kong.  HDB was also picked up.  We added PCR mid-day at $46.09 using a 25% trailing stop.

12-20-07:  We will add ITU, PCU, VSEA and NOK tomorrow's open using 25% trailing stops.  This is a great blend of foreign companies and various sectors.  We seriously contemplated adding LFC and PTR (both Chinese companies) until it was announced that China increased their core rate.  We'll wait and see how their market develops and reconsider LFC and PTR afterwards.

12-19-07:  We added PCR mid-day at $46.09 using a 25% trailing stop.

12-10-07:  We will add RCI, MW, PCZ, and ALV at tomorrow's open using 25% trailing stops.