$30 Billion Solar Stimulus from Chinese govt.?

March 31, 2009, 3:58 pm
Solar: Piper Sees $30B China Green Stimultus Program
Posted by Eric Savitz



The solar stocks are having another big day, thanks to bullish note from Piper Jaffray’s Jesse Pichel on the prospects for a big Chinese subsidy program for renewable energy.

“While we can confirm that recent news about new solar subsidies from the [Chinese] Department of Construction is too premature to quantify, our checks indicate where there is smoke there is fire,” he writes. “Recent announcements are just the tip of the iceberg.” He writes that contacts at the National Development and Reform Commission say the country is planning a $30 billion, four-year green stimulus program. According to Pichel, the Chinese government at this point has not decided how to allocate the funds. He contends the program is a positive for solar stocks long-term, but that it is too early to quantify the impact on the solar sector, and that it will be “more of a 2010/2011 story.”

Pichel says the $30 billion would be about 5% of the country’s overall stimulus program, and would include projects that involve clean tech, renewables and environmental protection, and that increase energy efficiency and decrease energy consumption. All of the cash would be spent by late 2012 or early 2013.

Pichel says that “although wind may represent the majority of central government support, we believe that the Chinese government wishes to start developing its domestic solar market” and that the recently disclosed subsidy program is just the start. “It is no loner a matter of if, but a matter of when subsidies for solar are coming…and how much.”

He also notes that there could be additional spending coming from local authorities in China, with Jiangsu Province recently unveiling plans for a 260 MW solar subsidy plan over three years.

Investment Thesis in Solars Still Intact

I know, I know many of you want solars to go thru the roof and you're sick and tired of waiting. The nature of investing requires a little more patience than that.

I still own FSLR, ENER and SPWRA and plan on holding them "forever". My thesis in investing in them hasn't changed. I'm looking for the solar Intel and that has been my objective since I started investing in them two years ago. I do manage my positions occasionally but my goal is still to keep them forever, or at least 5-8 years. You only need 1 solar intel to massively explode your portfolio returns.

If you read Jim Rogers or Warren Buffett, they always mention that they like to hold onto stocks "forever" especially when the investment thesis hasn't changed. During bad markets like we're in, you can hedge your solars by shorting financials at the same time. Jim Rogers is long lots of commodities. Though his commodities index is currently down 50%, he isn't the least worried. He thinks commodities will go thru the roof in the years ahead. His investment thesis hasn't changed. He is also heavily invested in China.

He has shorts in USA financials currently, to hedge. He thinks financials have nowhere to go but down and don't see any long term bullish scenerio in the sector. Intermediate term, he will make money in shorting financials and longer term he will continue to make money in commodities. Note that Jim Rogers have been invested in commodities for awhile now.

I have a similar long term game plan. I believe that Alternative Energy will be the wave of the future. Because we have limited oil (and thus higher oil prices in the future), because of global warming, and because of solars' technology inching closer towards grid parity, there is a good chance we will have a huge solar bull market that will last for years to come.

The Solar Rally will continue!

Watch the solars. They are gonna fly in the coming weeks and months. Get them hotcakes before they disappear!

FSLR, SPWRA, ENER.

The chinese subsidy is the driver for the solar rally. So get excited about chinese solars like STP (i don't like chinese solars but this one is my favorite if i were to buy some) and LDK.

The Real Test Of A Great Trader/Investor

Most traders have an inborn tendency to be either bullish or bearish in their market outlook, but rarely both. I would even dare to say that most people are either permabulls or permabears. They pretty much trade the same way regardless of market conditions. Traders either pretty much short most of the time, or they long stocks most of the time. There's nothing wrong with that because it's natural to gravitate towards what's comfortable for us. However, there are times you need to make some adjustments to "survive" the bad times.

I've seen a number of bears caught the crash of 2008. I didn't, but I did take lots of protective measures in my portfolio. A bear catching the terminal crash last year is equivalent to a bull trader catching the terminal rally in the year 2000 (like from nasdaq 3000 to nasdaq 5000). Btw, as if you don't already know, I'm generally a permabull (who does awesome in bull and sideways market) and not really that great trading bear markets because i was hardwired to have a bullish nature. I make that shortfall up with decent risk/money management and micromanagement. That keeps me still profitable in bear markets. Seeing companies being destroyed from bear raids is just not my cup of tea.

Bull traders tend to do well in bull markets but horrible in bear markets. Likewise, bear traders tend to do well in bear markets and horrible in bull markets. The real test of a great trader is how a person does in markets that are not congruent with that trader's general nature. I doubt there is a such thing as a perfect trader, one who catches both gigantic rallies and mega crashes. It's usually one or the other.

It all comes back to risk/money management. Make sure you focus on that. It's the only difference between a successful trader/investor and a failing one.

Wallstreet Meltdown II

Bad For Bears

I think we will get some sort of rally on Monday. As for the rest of the week, we could certainly pull back and retest Dow 7500 or so; but then I think we'll be off to the races again.

The ginormous volume as shown on the chart the last 3 weeks is quite bullish.

STP: why it's flying

Make A Living Or Get Rich?!

Does one want to make a living or get rich? That's the question that every investor probably needs to ask themselves when they enter this business. If the answer is you want to get rich then there are basically three ways to accomplish that goal.

The first one is by compounding over a long term time frame. This is great if one is young and has plenty of time to work with. It will virtually guarantee that you will turn a modest stake into riches if you have enough time and patience to let the magic of compounding work for you.

The second way to get rich is to find a profitable mechanical system and then have the discipline to stick with the system through thick and thin.

The third is to spot a secular bull market, jump on board early and hold on till the secular trend is finished.

You will notice that none of those include timing the market. History has shown repeatedly that over the long haul investors are not going to be able to time the market with any long term consistency.

I know I'm going to get flack from all the pattern traders, technical traders, etc. etc. but I can assure you that history has not changed. The market still has too much randomness in the short term to successfully time your way to riches.

That's not to say that traders can't make a living trading short term moves in the market, they can, especially if they are very good at controlling risk.

However I'm not in the market to make a living or to satisfy an urge for excitement. I'm only interested in getting rich :-)

So decide what your goals are. If they are to make a fortune, then pick one of those three proven methods and get started!

source

Just pick one? Won't you know? The Beanieville System is all 3 combined!!!!!!!!!!!!!! Those of you who already owned a copy, I hope you make the best use of it and treasure its principles. :)

Another Leader of the next Bull Market?

NTES:

A Leader of the next bull market?

SNDA:

Solar and Financials

SPY, solars and, lately, financials, are pretty much all I follow these days.

The next few days should take us higher.

SPY, ENER, SPWRA, FSLR, LDK, STP, FAS. Note I don't play LDK or STP.

Force Fields Against Bears

Two important dates to keep in mind:

April 2nd = mark to market decision

April 8th = uptick rule congressional meeting

These are very important regulations with respect to the market. These dates are shields against bear attacks.

On top of that, we got monthly and quarterly window dressing coming up into the end of March.

Wednesday most likely a down day

It will probably be a decent-sized down day considering how overbought we are in the short term.

As a daytrade, I would be looking to short sometime early morning, probably pre market.

Game plan for Tuesday..

is to buy the morning weakness. I think what will happen is that we ramp up huge again into the close and probably pull back the following day or two.

If you're into leveraged etfs, which I'm not a big fan of, then FAS is where you want to be. Once it crosses 7.5, it should see 10 rather quickly.

Go get 'em!

Would like to re-iterate....

Please get your heads out of the bear camp.

Take any pullbacks if we get it maybe Tues-Friday to load up long positions (with proper money management though).

Yes, it's the right time to be long and very strong! This intermediate term belongs to the bulls. Period. No if ands or buts about it.

Again, do NOT short stocks other than for quick daytrades. This time, you do NOT want to fight the Fed. You do not.

This week I will be buying FSLR. I own ENER and SPWRA. If you ever want to own solars, now is the time to buy buy buy!

FAS should continue to do well.

CRM, the next Oracle, is an amazing play on the tech rally.

SPY is going to 87-90 by the first week of April.

More upside

Very strong rally today, on top of last week. We will likely pull back tomorrow morning, but every pullback should be a buying opportunity. The intermediate term rally has already started.

Though we could eventually pull back to spx 750, I think that is the worst case scenario.

You should have a long position in place for the intermediate term. Shorting is not a good idea aside from quick intraday trades.

I think we're headed to SPX 1100 in the next few months.

The Geitner Plan FAQ

source
Q: What is the Geithner Plan?

A: The Geithner Plan is a trillion-dollar operation by which the U.S. acts as the world's largest hedge fund investor, committing its money to funds to buy up risky and distressed but probably fundamentally undervalued assets and, as patient capital, holding them either until maturity or until markets recover so that risk discounts are normal and it can sell them off--in either case at an immense profit.

Q: What if markets never recover, the assets are not fundamentally undervalued, and even when held to maturity the government doesn't make back its money?

A: Then we have worse things to worry about than government losses on TARP-program money--for we are then in a world in which the only things that have value are bottled water, sewing needles, and ammunition.

Q: Where does the trillion dollars come from?

A: $150 billion comes from the TARP in the form of equity, $820 billion from the FDIC in the form of debt, and $30 billion from the hedge fund and pension fund managers who will be hired to make the investments and run the program's operations.

Q: Why is the government making hedge and pension fund managers kick in $30 billion?

A: So that they have skin in the game, and so do not take excessive risks with the taxpayers' money because their own money is on the line as well.

Q: Why then should hedge and pension fund managers agree to run this?

A: Because they stand to make a fortune when markets recover or when the acquired toxic assets are held to maturity: they make the full equity returns on their $30 billion invested--which is leveraged up to $1 trillion with government money.

Q: Why isn't this just a massive giveaway to yet another set of financiers?

A: The private managers put in $30 billion, but the Treasury puts in $150 billion--and so has 5/6 of the equity. When the private managers make $1, the Treasury makes $5. If we were investing in a normal hedge fund, we would have to pay the managers 2% of the capital and 20% of the profits every year; the Treasury is only paying 0% of the capital value and 17% of the profits every year.

Q: Why do we think that the government will get value from its hiring these hedge and pension fund managers to operate this program?

A: They do get 17% of the equity return. 17% of the return on equity on a $1 trillion portfolio that is leveraged 5-1 is incentive.

Q: So the Treasury is doing this to make money?

A: No: making money is a sidelight. The Treasury is doing this to reduce unemployment.

Q: How does having the U.S. government invest $1 trillion in the world's largest hedge fund operations reduce unemployment?

A: At the moment, those businesses that ought to be expanding and hiring cannot profitably expand and hire because the terms on which they can finance expansion are so lousy. The terms on which they can finance expansion are so lazy because existing financial asset prices are so low. Existing financial asset prices are so low because risk and information discounts have soared. Risk and information discounts have collapsed because the supply of assets is high and the tolerance of financial intermediaries for holding assets that are risky or that might have information-revelation problems are low.

Q: So?

A: So if we are going to boost asset prices to levels at which those firms that ought to be expanding can get finance, we are going to have to shrink the supply of risky assets that our private-sector financial intermediaries have to hold. The government buys up $1 trillion of financial assets, and lo and behold the private sector has to hold $1 trillion less of risky and information-impacted assets. Their price goes up. Supply and demand.

Q: And firms that ought to be expanding can then get financing on good terms again, and so they hire, and unemployment drops?

A: No. Our guess is that we would need to take $4 trillion out of the market and off the supply that private financial intermediaries must hold in order to move financial asset prices to where they need to be in order to unfreeze credit markets, and make it profitable for those businesses that should be hiring and expanding to actually hire and expand.

Q: Oh.

A: But all is not lost. This is not all the administration is doing. This plan consumes $150 billion of second-tranche TARP money and leverages it to take $1 trillion in risky assets off the private sector's books. And the Federal Reserve is taking an additional $1 trillion of risky debt off the private sector's books and replacing it with cash through its program of quantitative easing. And there is the fiscal boost program. And there is a potential second-round stimulus in September. And there is still $200 billion more left in the TARP to be used in other ways.

Think of it this way: the Fed's and the Treasury's announcements in the past week are what we think will be half of what we need to do the job. And if it turns out that we are right, more programs and plans will be on the way.

Q: This sounds very different from the headline of the Andrews, Dash, and Bowley article in the New York Times this morning: "Toxic Asset Plan Foresees Big Subsidies for Investors."

A: You are surprised, after the past decade, to see a New York Times story with a misleading headline?

Q: No.

A: The plan I have just described to you is the plan that was described to Andrews, Dash, and Bowley. They write of "coax[ing] investors to form partnerships with the government" and "taxpayers... would pay for the bulk of the purchases..."--that's the $30 billion from the private managers and the $150 billion from the TARP that makes up the equity tranche of the program. They write of "the Federal Deposit Insurance Corporation will set up special-purpose investment partnerships and lend about 85 percent of the money..."--that's the debt slice of the program. They write that "the government will provide the overwhelming bulk of the money — possibly more than 95 percent..."--that is true, but they don't say that the government gets 80% of the equity profits and what it is owed the FDIC on the debt tranche. That what Andrews, Dash, and Bowley say sounds different is a big problem: they did not explain the plan very well. Deborah Solomon in the Wall Street Journal does, I think, much better. David Cho in tomorrow morning's Washington Post is in the middle.


J. Bradford DeLong is a professor of economics at the University of California at Berkeley, chair of its political economy major, a research associate of the National Bureau of Economic Research, a visiting scholar at the Federal Reserve Bank of San Francisco, and was in the Clinton administration a deputy assistant secretary of the U.S. Treasury.

The New National Anthem?

Are We There Yet?

Have we already bottomed?

I feel that, despite the huge mess with the Banks, the government had already done much to prevent a total collapse of our financial system. The most important and urgent thing right now is dealing with the banks' toxic assets. In the 1930's, we didn't deal with the toxic assets and the government didn't print enough money. As a result, thousands of banks went belly-up. We're definitely tackling this recession/depression differently this time. Of course, there's no free lunch. The toxic assets don't just disappear into thin air and everything becomes fine and dandy. Some people feel that the government should just let things be and not intervene. Let the banks fail, they say. I personally don't agree that doing nothing is the best course of action, especially with regards to the magnitude of the problem we're faced with today. I think the huge bad banks are like atomic bombs right now and needs to be defused somehow. I think doing nothing could be a grave mistake. It may very well turn out to be just as bad for Americans, if not worst, to do what Bernanke and Paulson have already done.

Anyways, we had a pretty good two day selloff to end the week. I'm bullish for the intermediate term but doesn't mean I'll hold my longs without hedging of some sort. The easiest and most sensible way to hedge is simply by selling some longs and reducing exposure. It's ok to actually coming back in once we start moving higher. I'm thinking right now that Monday will most likely be another down day. You'll know it as soon as we open and go red. SPX 740-750 is likely the first stop, then 720, and if that doesn't hold the bulls are gonna have to take it up violently one more time (to SPX 600). I think the SPX 740 should hold. Hey, but I've been wrong before. Luckily, I trade the Beanieville System or else I would have been broke many times already since this bear market started.

So, is this bear market finally over? Is the ultimate bottom already in? Many are not so sure:
click graph to enlarge...

No more SPY alerts

Hi Everybody,

I have decided to stop sending out email alerts sometime next month, due to 2 reasons:

1) It is actually more time consuming than i thought, having to copy and paste all the email addresses each time i send out email. Being a daytrader that i am, i may get out immediately after i get in because the trade looks like it may not work. I just cannot keep on emailing everybody every time i get in and out. It will be a time consuming nightmare and at the same time you do not want to see me get in and out like a maniac because the posts would be useless to you. Most subcription services out there are for swingtrades or longer term trades usually. It's a logistical nightmare for a daytrader like me.


2) There are certain trades i make that i simply cannot announce because that would eventually reveal the beanieville system. Not everybody on the email list has a copy of the system.

Recent subscribers, those that started this week, will get a refund. Otherwise i will continue posting until middle of april.


Thanks,

Beanie

We're in for a pullback tomorrow... but

you cannot be short biased. I think the pullback could take us to spx 750 area if the bears get rolling.

However, spx 900-1000 is in the cards after the retracement. Since the upside is potentially more than the downside, it is best to buy on dips than to start initiating short positions.

Play from the long side.

i feel very dirty about doing this

..but i bought a small amount of FAS for a multimonth hold as I believe we are at the beginnings of a multimonth market rally and would like to be exposed a little bit to the most beaten down sector.

Those of you who own the beanieville system, consider buying about 200-500 shares (or more depending on your account size but should only be a fraction or less than 10% of your account size) and stack it away for for a few days or weeks to a few months and then either take profits OR you know what.....

Very important you go small. These highly leveraged etfs do NOT work the way most people think they do. Again, I feel dirty owning this.

It might pull back today but I bought premarket at around $7.4 (because 7.5 or 6 doesn't really matter a whole lot with the ultras when you're swingtrading).

I think ENER has found a bottom here

at $14 area.

Something to put on radar. I own it for an intended 5-8 year hold.

Financials appear strong and should have more upside. WFC is a good play and should be going to 24.

This is the real thing..

Big Bubba is coming for the bears. You need to shut the bears out of your ears and heads or you will end up blowing up your accounts if you bet big with them. One of the reasons I know this is the real rally is that even I, generally a permabull, did not believe it. That's why I've been shorting this rally and getting dinged for it. Staying away from leveraged instruments and using proper money management kept me from bleeding too hard. It also helps that I'm up over 50 points on the SPY since November. Most of the bears trading puts, futures and stuff like the FAZ have most likely decimated their accounts. They still don't believe this rally, and are still in denial. They will transfer more cash into their obliterated accounts and gamble some more. They will be broke to the power of broke by the time this rally ends. I see SPY going all the way to about 87 (probably no later the end of next month) before consolidating....and onwards to 100.

I don't know if the ultimate low was already in..but I believe this is at least the big bad bear market rally lasting several months, if we're still in a secular bear market.

If we pull back hard starting tomorrow, SPY 76 should be the lowest it can get to before the big run to take out the 50dayMA (currently at 80.6). We may not even go that low. I'm thinking about 78-79 is where buyers will step in.

Tomorrow is "fade the fed" day and will be telling how low we go. I will be looking for long entry probably on tomorrow's morning dip. If you don't like buying dips...then SPY getting back above 80 tomorrow or Fridat is your signal to get long.

I think it's time to clear out most of your short positions on the dip.

Tally (3/18/09)

Below is my publicly announced trades (via email alerts). This is definitely not a good day for me. Two posts ago, I posted we may have the batwings formation and should go higher today. I even gave target of SPY 80-82. Somehow, I decided to second guess myself this morning and the result of being on the wrong side of the batwings formation is almost always disastrous, as we've seen many times.

1) long SPY 77.85

closed for -.25


2) short SPY @ 77.50

closed for -.55


3) short SPY @ 78.18 for fed play.

closed for -1.55 whammo!

Market could close either way

So you might not want to be too committed to either side. There is decent resistance at spx 780. I am currently short SPY above 78 and will hold till after fed announcment. Quite a dangerous play but I'm taking the risk.

Remember money/risk management is really important. You're a fool if you buy puts/calls right now.

I think we could see SPY 80 tomorrow

We should get a morning pullback, which should set up nicely for a rally towards 80 tomorrow. The pullback might be small.

I don't know if I can characterize the last two days as a batwings formation, though I treated it as such at the close. Note that two-day batwings formation works just the opposite, as we've seen several times already. In the past we've seen how something like this rallies hard most of the day....and get a big pullback towards the end of the day or the next day.

I suspect SPY 80, or even 82, is where the pullback will happen.

Tally for 3/17/09

The following are today's publicly announced trades (via email alerts), based on where I closed out the positions:

1) Shorted SPY @ 76

covered for -1.3


2) Long SPY @78.1

sold for +.3


3) Shorted APOL @68.6
for a swing trade.


Remember to take profits/loss whenever appropriate depending on your money management and risk management style.

Money and Risk Management

Remember that money management and risk management are supreme, more important than getting market direction right or getting into the right stocks. On friday, I cringed when I read some guy at slopeofhope put in 65% of his money into FAZ and 35% cash. I think that bloggers need to constantly remind their readers of this. I do this all the time - reminding you of money and risk management. You might get annoyed but I'm only trying to help you out.

An alternative way that will help reduce risk is simply by not getting into leveraged instruments in the first place, especially if you don't really have a strong concept or risk or money management.

Tally Up (3/16/09)

The following are the results from today's public trades (announced via email alerts), based on where I open/close the positions:

1) Bought SPY @ 76.9

sold 1/2 for +.45
sold 1/2 for +.60


2) Covered 1/2 APOL (shorted @ 67.5 days ago) for +4.0

Will hold the rest. I think APOL could be toast.



There could me more upside to this market today, but I gotta take my daughter out now. See ya in awhile.

Ok, fess up now, which ones amongst you are UFOs?!

Tough to trade against you!

Nice quick weekend viewing

Where is the market going?

Huge Move on Monday

I'm thinking probably higher.

Not only do we have the batwings formation, I expect this one to FAIL again; so we move higher instead of lower.....and it will be a strong move. The point to mention this is that it will be a BIG move.

Why does "it" sometimes fail? It sometimes fails, like yesterday's, is because the morning gap was too small - low flying animals tend to like to fly higher. lol. Like today, we got a small opening gap...so i think this one will fail on monday. But not kiddin ya, whether it fails or not, it will produce a huge move.

We also have the inverted head n shoulders, thanks to Winace's observation. It moved down to retest the neckline today and closed at the high.

Tally Up

Below are today's publicly announced trades (via email alerts), based on exactly where I closed the positions:

1) Covered SPY swingtrading shorts (average price 71.43) for -4.57 . Yikes! Although this play was based on 2 full positions, my swingtrade full positions tend to be smaller than my daytrading full positions.


2) Several daytrades this morning for net = breakeven. -.10,-.38, +.5 = breakeven


3) Bought SPY @75.75

sold for +.45


4) still have APOL swing short (entered @ 67.5)

I think it's time to cover shorts tomorrow

...on the morning pullback, if you still have shorts. A decent sized gap down was expected this morning, but we didn't get that and instead got a slight gap higher when I went back and check. I think this is quite significant in light of the batwings formation yesterday. The formation obviously failed (20% of the time). Either way, a big move was expected today and that we got, unfortunately to the detriment of those betting on the formation.

I think the indicis are headed to their 50-day-moving-average. For instance, I think Dow is headed to 7800 probably sometime next week.

I think we get a pullback in the tomorrow, at least early on, but it will be a chance to go long. Tuesday's and Today's move up was relentless. Gotta respect that as something meaningful.

Jim Rogers - 2009 Total Decline For USA

I Fly, You Fly

Here's one of my favorite charts. What do see for today?

Not entirely symmetrical, but good enough.

A morning gap down is the confirmation, and we should get a deep drop as a result. A gap up would mean it fails; because the end result of this formation is rather dramatic it will rally huge.

So look for gap down (which is the likely scenerio)....and short away!

The market is starting to look toppy here

Watch a possible reversal at the close.

We faded the SPY this morning around 69.55

We lucked out.

Tally Up (3/9/09)

Below is today's announced trades (via email alerts):

1) Shorted SPY @ 68.65

covered for +.1


2) Shorted SPY @ 69.98

covered for +1.1



Gotta go. Have a great day!

Trading Conservatively, Consistently & Powerfully

Get SPY trading alerts

APOL tagged by Citron (aka Stocklemon)

APOL is dead meat, goner, sayonara, bye bye.

Andrew Left of Citron attacks.

Short all bounces. It's a goner most likely.

Most of us shorted at 67.5 a few days ago.

Solar Should Win In The End

source

Suspend Mark-To-Market Accounting?

That's what the Congressional meeting this Thursday will address. Will they repeal this mark-to-market accounting rule?

Here's an opinion piece you might want to read.

Regardless what happens this Thursday, traders think that Congress will agree to appeal it. So we are likely gonna get a rally the first half of the week, especially in financials. Traders will be looking to scoop up FAS and/or short SKF/FAZ in premarket tomorrow. WFC could see $12 by Thursday.

I might play the WFC, but not the leveraged etfs.

Defazio wants to eliminate "gamblers"

CNBC video

If his proposed bill ever gets any traction, most traders can pack up and return to the corporation because the transaction fee is horrendous. You think brokerage fees for $20 round trip is annoying? This proposed .25% transaction fee per trade (.50% round trip) is the knockout punch. Every $10,000 transaction equates to $50 round trip transaction fee, in addition to your normal brokerage fee of $15-20.

Featured Upcoming SuperStar

Highly recommended transactional/business/venture capitalist attorney for all of America. The legal aspects of your business will be in good hands.

One of Katy's biggest clients, very wealthy, is a global venture capitalist investing in solar companies in Spain, Germany, US, etc.

Wayne Gretsky is also a client.

Trading Conservatively, Consistently, & Powerfully

In this post, I briefly talked about why I like trading the SPY. Nowadays, I trade for about 3 hours in the morning and then I usually go hang out with my daughter for a few hours. I do miss the last two hours before the closing bell, where the tape action is as wild as the first hour after the opening bell, but I also enjoy the more balanced life.

Ok, before you even start trading, you first should decide your approach/strategy in terms of what you trade. Jumping in and out of different stocks everyday is not a good strategy and will most likely result in eventual ruin. I'm not a robot and neither are you, so it's nearly impossible to have a good grasp of the technicals and the daily news headlines of all the stocks that pop up on your radar/chatroom. Most good traders usually trade some kind of index, either S&P500 futures or the SPY etf as the most common. They might make occasional swing trades with individual stocks, but they are mainly for garnishes, not the big meals like the S&P500 futures or SPY.

From November of last year to end of February of this year, I've personally generated over 40 points profit on the SPY. The more accurate number is probably around 55-60 because I was trading full time in November and December. My goal starting this year (trading part time) is to gain minimum goal of 10 points per month. I've been pretty consistent with that. Let's do a little bit of math to see how powerful this all boils down to:

10 points per month / 20 trading days per month = average .50 point per day that I have to make trading the SPY. If you've been reading the email alerts results, you see that it's quite doable. Additionally, I do make more trades that are not announced via email.

10 (points/month) / $80 (price of SPY) = about 12% return per month. Using the Rule of 72 for a quick calculation, I should double my money within 6 months. If you got consistency in your trading, then you "re-invest" (say double your position size for the next 6 months) and continuing to generate 10 points per month and get another double another 6 months later. Within a year, the return would be 400%-100% (original amount)= 300% net gain.

= 300% return.

Without taking on extreme risk like options, futures or leveraged ETFs like the FAZ/FAS.

Do you do these kinds of calculations to get the big picture before you trade?

Tally Up (3/6/09)

Below is the public email alerts announced today:

1) Covered SPY shorted from yesterday's close (avg @68.96) for -.40


2) Bought SPY @69.15

sold 1/2 for +1.25
sold 1/2 for -.50 (in actuality, i sold for +.8 but did not have time to announce it)

net= +.37


Have a great weekend!

Starting next week, I will no longer give out alerts for buying or selling halves. Every position will be a "full position".

Two Questions From Email Alerts Members

1) I signed up but still not receiving any email alerts?

Answer:
You might want to check in the spam folder. Since I'm sending a group email, some email accounts see that as spam. Also, if you have company email address, they might be block outside email (spam). Consider signing up for a gmail or yahoo account.



2) Did you mean you sold 1/2 your SPY @+1.25 or did you sell ALL your SPY @ +1.25? I know you went long with half a position but it is not clear if you sold ALL of your half position or half of your half position.

Answer:
I bought half the normal number of shares...sometimes i add the other half a short while later.. When i say i sell half, i mean i sell half of whatever total shares i have. And sometimes i sell the remaining half a little while later. Note that i have 3 accounts to management and may not be able to post where i sold the remaining half.

[I actually sold the second half below 70..but since i did not announce that via email, i will consider that I still own half the shares at this time and will do the tally as such.]

No problem, only 24 more points down to go?

The "SuperBat" SPY 45 target?

Shorted 1/2 SPY for tomorrow

We could gap higher but it should below SPY 70, where I will likely put in the other 1/2 short.

I hope the Dow crashes 2000 points on Monday. That should fix everything.

Tally Up (3/5/09)

The following is today's public trades announced via email alerts:

1) Covered yesterday's short SPY (@71.1) for +.95


2) Bought SPY @70.18

sold for -.10


3) Shorted SPY @70.55

covered 1/2 for +.50
covered 1/2 for +.7


4) Shorted APOL @ 67.5 for a swingtrade



Gotta go. Have a great day. The market could really implode today if the SPX takes out 693 area.

SPG down again

...on a strong day.

That usually means more selling ahead.

Same with GLD.

Same with APOL. Huge volume on the plunge today.

These make good shorts/hedges.

Is AZO the next Walmart?

This is probably the only stock out there that is not feeling the wrath of the stock market collapse.

Just a really fantastic chart. The stock didn't do much during most of the 90's bull market, but the run started when the Internets crashed.

Tally Up (3/4/09)

The following is tally for the public trades via email alerts, based on where I actually took profits/losses:

1) Shorted SPY @71.7

covered 1/2 for +.5
covered 1/2 for -.8

net = -.15


2) Shorted SPY @ 71.1

(This will be holding for tomorrow. I see banks and GE down huge and it beats the heck out of me why the market is up this much. Thanks, Doug Kass (aka market manipulator...lol jk.))


See ya tomorrow.......

Trade Like An 800lb Gorilla. Don't Mess Around Like A Chimp.

If you love trading and you want to trade intraday or make swingtrades like real traders, then stick to the SPY. This etf has everything you need in order to master and make all the money you need from the market:

1) Liquid enough for you to get in and out with market orders with little slippage.

2) You can trade 2000, 5000, 10000 or more shares without being hurt by slippage.

3) Safer than most things out there because it represents the top 500 companies in the US. It will not be the next Enron and it'll still be around after you die.

4) Slow enough for you to think and respond. Seriously, how many people actually have the time to "think" when they trade nonsense like the FAS or FAZ?

5) You can "control your emotions" much better when you trade the SPY than volatile stocks or leveraged etfs or options. When you have time to think, you tend to make better decisions and better able to keep your cool and discipline.

6) When you trade mostly the SPY, you tend to have more consistency in your trading and in your results. Money management is also easier. Honestly, there is no point in jumping from one stock to the next and to the next everyday.

7) I find that you only get a maximum of about 2 great trades a day per stock to make the most money for the day, and it usually occurs at the same time for most stocks because most stocks follow the major indicis. So, even if you trade 10 stocks, you only get 2 chances. Why spread them out so much when you're not a robot? Why not just trade the SPY and put more of your money into it?

The email alerts today (my few public trades) generated a net gain of .625 on the SPY, based on where I actually took my profits. That is nothing to sneeze at and could mean lots of money for people depending on how many shares they normally trade.

300 shares x .625 = $187 profit
500 shares x .625 = $312
1000 shares x .625 = $624
2000 shares x .625 = $1248
5000 shares x .625 = $3125
10000 shares x .625 = $6250
20000 shares x .625 = $12500

Tally Up (3/3/09)

Since I'm about to leave, thought I go ahead and tally this morning's public SPY trades announced via email alerts.

1) Shorted SPY @71.75

-covered 1/2 for +.75
-covered 1/2 for +.55


2) Shorted SPY @70.87

-covered SPY for +0.0

Rally Time?

We are very short term oversold and due for a bounce. Note also that there is a decent amount of support between SPX 600-700. I don't think we'll plunge thru those quite that easily. If we enter that zone, we're either gonna chop or bounce huge. My hope is that we get the plunge over with this month and start a multimonth rally. Interesting note that 9 years ago this month was when the Internets started crashing, after the bears capitulated. Hopefully this time the bulls capitulate and we start rallying this month.

The Email Alerts Are Fantastic...

It is great on my side because my blog doesn't get cluttered up with buy and sell postings, which look ugly and are time consuming. I'll try to do a tally everyday I make the calls.

And on the readers' side, it seems folks are liking it quite a bit:

-----------

Hey Beanie

the email alerts are genius. Nice call on having those hit the email acct.

I like that i can make sure I am following (my) plan by seeing your calls also.
Thx

------------

Beanie,

Great job with the email trading alerts. I like the speed and the tally at the end of the day.

You may have found a whole new source of income with great potential for growth.

Good luck.

Tally Up

So far today, my public SPY daytrade results since this morning via email alerts are as follows:

1) bought SPY @72.4

-sold 1/2 for +.50
-sold 1/2 for -.30


2) short SPY @71.85

-covered 1/2 for +.75
-covered 1/2 for +.55


I'm done for the time being. The market could go lower but we're very short term oversold now. DJIA 6800 is the next support.

Shorted SPY @ 71.85

Not sure yet if i'm gonna turn it into a swingtrade.

SPG taking it up the chin

I own some shorts as hedge, since $33 area.

Hearing that commercial realestate the next to implode, but I think I will cover sometime this week.

Already Sold 1/2 SPY for +.5

yes, the email alert guys get it first and it's awesome and easier on me.

Later on, i will probably not post my sell points until much later.

Be sure to sign up if you want email alerts.

Bought SPY @ 72.4

nibbled for a fade

Potential For SPX 550 is very high

Remember the Super Batwings Formation? That thing, though I was not aware of it at the time, actually predicted the massive collapse of the market starting late 2007. The SuperBat actually gave the perfect timing.

Where does the end result take us? Probably to at least SPX 500-550. If so, I rather see it get there sooner than later.

With regards to tomorrow, as a daytrader, I'm gonna shed some of my puts (which I only buy as hedges) on the morning gap down. Don't know exactly when just yet. Gotta watch the tape. I hope it gaps down really big towards the low SPX 700. There should be buyers stepping up there.

I'll likely hold the rest of my hedges into Friday. It looks like it may turn out to be one of those omfg! brutal week.

The Bears Will Eat Your Children

The Dow already breached the November low about six sessions ago, the SPX breached the November low just one session ago, but the NASD remains above.

All in all, it looks like bears are surrounding the perimeter and ready to feast.

A couple of dojis and doji stars were formed on Friday - indcating indecision and possible reversal, but it may be the bears just tricking the bulls.

Hope everyone slept well this weekend. If you didn't, it's probably because you're too leveraged and trading way over your head.

We either gonna get a huge gap down or a huge gap up tonite in the futures market.

Everyone's gonna be watching. So go get yourselves some beer and popcorn and get ready for showtime.