You Have to Know Why

November 27, 2012

I exited my Northern Technology (NTI) short put (bullish) position today as the stock ran up toward $23 a share.  Of course, I didn’t get the last dollar of potential profit, but that’s not my goal.

What happened next amazed me.  About a half hour before the close, the stock started dropping like a stone, falling as low as $20.24.  Since I entered the trade by selling those $22.50 puts for about $2 each, if I had still held the position, it would have been a net loss at that point.  Boy, did I feel lucky.

Then, almost as quickly, the stock started going back up, closing the day right around $22 a share.

I even started playing “what if” in my mind, thinking how I could have re-entered the position for even more potential profit.

But I didn’t, and I’m glad. Read the rest of this entry »


Chart Patterns

November 26, 2012

Other than a tendency to become self-fulfilling prophecies, price charts on stocks, commodities, etc. have been used for centuries by some astute traders.  I use them, for example, to help time entry points, and used them in a past life to set hedges in the Treasury market.

Of all chart patterns out there, the ones that help you keep from losing your shirt are among the most valuable.

Lately, I’ve been reading quite a bit about a classic “Three Peaks and a Domed House” pattern developing in the stock market.  This is one of the most bearish patterns around. Read the rest of this entry »

Mercury Retrograde

November 21, 2012

Or maybe I should call this “The Case of the Mysterious Missing Money”….

I don’t let astrology guide me the way the Gipper did, but sometimes I have to admit that the coincidence factor is way too high to completely ignore it.  The past few days have been one of those times when I have to say the astrologers’ predictions were coming true.

For those who don’t know, the movement of the planets at different speeds through their rotation around the Sun makes them occasionally “go backward” relative to our night sky  (day sky too, but it’s much harder to tell when you can’t see them or the stars). Read the rest of this entry »

Dodged a Bullet

November 19, 2012

Just spent an hour on the phone undoing a trade that never should have happened.

This goes in the “if it’s too good to be true” file, and I should know better.

For those who trade in options, especially thinly traded options, you’ll know how frustrating it is to watch the screens and see good opportunities, only to have them yanked away as soon as you try to act on them.

I have watched the former Yellow / Consolidated Freightways / Roadway trucking stock since before it went Chapter 11, and have the scars to prove it.  Now that the debt the merger and private equity boys loaded it with has sunk the company, a new stock, YRCW rose from the ashes. Read the rest of this entry »

Short Selling “Tell”

November 16, 2012

Every poker player knows to watch for “tells” — the hints that your opponents are about to pull a bluff or that they have a sure winner.

Lately I’ve been seeing some “tells” from the short-selling community. Read the rest of this entry »

Twitter for Trading Notes

November 16, 2012

I decided to use my twitter account to make real-time trading notices.

I don’t give stock advice, but I do try to explain what I’m doing and why in this blog.  Now, without promising to do it for every trade, I am posting what I’m doing on twitter.

My handle was already taken, so on Twitter, I’m @hhill61

Public Service Announcement

November 15, 2012

I thought about calling this “PSA” but I thought that might just appeal to potential customers for Dendreon’s customized vaccine, Provenge.

No, this is about mREITs. Read the rest of this entry »