Investing and Trading Review of May 22, 2010 (VIDEO)

"Love is the only kind of fire which is never covered by insurance."

Here is the "Weekly Review" video, that will review my investing and trading efforts for the last week, based off of comments in last weeks "Airelon's Market Tactics".

(Video Included. If you're seeing this entry elsewhere and cannot see the Video? Click here to view the entry ...)

The Blip TV video will be embedded and replace the video when it has finished compiling (it ran into a problem with the conversion this evening). I will post the blip.tv version as soon as the compiling is completed, as I have discovered that German viewers cannot see the YouTube videos. If you are from Germany, this link may work for you ... hopefully ...

Ok ... this is a picture of the "trading sister" account from "Airelon's Market Tactics" from April 10th, to May 15th, 2010 ...


That's right ... flat. New traders have to understand that this will happen. That's the reality of trading. At best. There will also be months, that will not be flat because there will be drawdown. As I mentioned in the above video, there will be weeks, sometimes months where that will happen. It's just that simple. It's why I absolutely, flatly refuse to force trades. If I force trades for the sake of subscribtions, then I'm not portraying the reality of trading. Because this is the growth of "Airelon's Market Tactics" since the launch of the newsletter ...

That's right ... 56.25%

What's the old expression? Slow and steady wins the race?

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Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 14 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

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Week in Review Podcast: The Gift in the U.S. Credit Markets (PODCAST)

"Risk will always price itself. One way or another" - Personal Mantra

Welcome to the Week in Review!

What?

The Week in Review? On a Friday night? The Week in Review is on Saturday, not Friday! Where's the investing and trading review video? It's all coming. I'll explain in the following podcast, as well as the current gift being delivered to the U.S. economy in the credit markets at the moment ...

(Podcast Included. If you're seeing this entry elsewhere and cannot play the podcast? Click this link to go to the exact podcast entry ...)

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Once again ... here is the entry that I put out ... The Continuing Economic Crisis Simply Explained in Under 10 Minutes, with the associated video. It's as "linear" as I know how to make a non-linear topic ...



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Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 14 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

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Fear in the Markets ...

The story isn't the Euro and the United States Dollar (EUR/USD). at the moment. Well ... to be truthful ... the EUR/USD is one story. But the real story at this exact moment, is the United States Dollar and the Japanese Yen (USD/JPY). Not for a short on that cross. I don't trade Forex. But I am aware of the message that it sends.

I said it on the Facebook page, and I'll say it here ... The USD/JPY is showing real fear in the markets right now. A very similar setup before the last "son of 87" of May 6, 2010 - it's real ... and it's fear. It's not computers. It's not "high frequency trading". It's fear. I'm not saying we'll have a repeat of May the 6th. But I am saying that there is true fear out there, and it's being represented in the currencies and credit markets.

Good lord, I'm looking at Crude Oil as I type this out. Down another $2.00.

The equities markets are down from their tops a few weeks ago ... what? Almost 9% thus far from tops? Airelon's Market Tactics dividend portfolio ... the long term buy and hold dividend bearing stocks... ... it's up about 2% since the downturn. And subscribers know why.

I wasn't yelling out "VIOLATED" and all in a blather-panic in the twitter stream yesterday when the 200 period EMA was violated by two ticks (unlike some fear monger bloggers), I had simply a very satisfied annoucement of "hedged" ...

July 100 SPY Puts.

I'm not sure where we're going from here. No one does. But I sure do know when it's time to buy some insurance on long term buy and hold stuff. It was two days ago. I was only smart enough to buy mine yesterday. I think it was Tim Sykes who made this statement originally, but some days I feel the same way:

"It's like I'm Forest Gump'ing my way to success"

:)

As I said ... I'm not 'yet' thinking we're in a "son of 87'" scenario. In fact, the USD/JPY may ease up a bit. I don't usually watch CNBC and I'm not watching it at the moment, but I would imagine they aren't showing pictures of fires and riots this time. Crashes don't usually happen after new lows. What usually happens after new lows, is the market eases up a bit. But I sure know what message that's sending out there, and that the time to be hedged was two days ago ...

And this sure as shootin' aint the result of "High Frequency Trading" or computers.

Edit: 11:12 am - just taken out of the hedge Puts with profit. More cash to play with on the dividend investing route.

Edit: 3:07 pm - I hope ones remember what I had said about what I mean when I say: "Wow, look at that rally" as opposed to "Wow, look at that fear". Opportunities are arising ... but it will take patience

Edit: 4:07 pm - We've closed. A couple of comments from some very smart people I track during the day. I'd have to agree with their sentiments ...

"i don't remember an uglier close in at least 2 years. Glad to see all the negative tweets and fear in the market. UGLY - Close on the lows ... In my opinion, today was MUCH worse than the "Flash crash" because no reversal - good heavy panicked selling volume though" - Dasan

"Not a good close. it could leave a mark ... some Hedge Fund buds have been aggressively de-risking (h8 that word) this past week, similar in fashion to fall 08. i expect to see ugly #'s" - Morgan_03

It's all fun and games, until you add in fundamental selling.

Is a small rebound in the works? Will we sell off lower on Friday? I don't know ... and I don't care. I do know that "V" shaped recoveries in the markets do not happen. I'm just thankful that I have enough cash for that time when it's time to go on a 'buying spree' for cheap, cash heavy, dividend bearing stocks.

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Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 14 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Investing and Trading Thoughts: Gold is Fear, PPI Numbers and Non-Linear Systems (VIDEO)

"When you are right for long enough, eventually they start paying attention" - Amory Lovins

Every once in a while ... I have a "trader thoughts" entry. I'll talk about a couple of factors that I see going on ... economically. And with the shape the world is in ... there's always plenty to talk about on the economic front.

So since February, PPI is showing absolutely zero in terms of inflation. None. Nada. And unlike some who purport to be 'economists' - I am thankful that PPI does not include Food and Energy.

I discuss this and a whole lot more in the following video ...

(Video Included. If you're seeing this entry elsewhere and cannot see the Video? Click here to view the entry ...)

Here is the link to the article I wrote regarding the way the BLS reports inflation data.

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Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 14 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

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Trading Review of May 17, 2010

"Let no one think that flexibility and a predisposition to compromise is a sign of weakness or a sell-out." - Paul Kagame

I took a trade earlier on Monday, that I mentioned in the Twitter stream. As this is a trade that I discussed for "Airelon's Market Tactics", it will count towards the results of the Model Portfolio that benchmarks the results of the newsletter.

There were two moments with this trade on Monday. It was in Sugar #11. The first 'moment' was a profitable trade. The second, was a moment where I was going to enter the market, and then decided to pass. And all if it, had to do with what I saw on the tape.

The video skips about in the beginning, so forgive me for a couple of audio and video 'skips' ...

(Video Included. If you're seeing this entry elsewhere and cannot see the Video? Click here to view the entry ...)

After I filmed this, Sugar fell even further to .1382

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Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 14 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk

Monday Challenge Project Summary: May 17, 2010

Previous $500 Challenge Project Balances:

"The Three Sisters":

Investing "Sister" Balance: $807.16
Trading "Sister" Balance: $1,821.56
Interest Bearing "Sister" Balance: $425.30
Total Challenge Project Funds: $3,054.02

Introduction:
The original video explanation of the Challenge Project that began with $500, is to be found here. The Challenge Project is basically a demonstration of a model that anyone could at least follow along with on a weekly basis. It is my attempt without cost, to help out the 'little guy' when it comes to investing and trading by providing an example, a 'model' as it were ... as run by myself as a professional trader with real money, in sub-accounts that I own; following my own three sisters portfolio management system; albeit modified a bit to operate with low funds. From time to time, I provide snapshots of the broker statements.

Rule No. 2 of the Challenge Project states that each month, we can divvy up $100.00 as we wish between the various challenge project accounts. We split up Rule No. 2, into weekly segments; or $25.00 a week.

For this week, the $25.00 weekly deposit is being transferred to the Challenge Project TRADING Account.

Trading Account:
So far this year, we've had a 60% accuracy rate with the profitable PCBC trade, the profitable UNG trade, the loss in the GLD puts, the profitable trade in the SPY, and then this latest loss with the USO calls. Basically, I'm still up a tad bit in regards returns for trades taken.

While that is the case ... while I am still up just a bit ... I want to refocus on bumping up the capital in the trading account by applying rule no. two of the Challenge Project; and perhaps give trading the account just a bit of a break. This follows the money management strategy we have developed to date.

Investing Account:
The 'dividend investing' portion of the challenge project is holding steady currently despite the pullback in equity prices. And within the next 30 days, we'll start receiving dividends for this quarter, which will yet again ... 'grow' the share size of that portion of the account for free.

I'm already beginning to think that next quarter, each month I'll start applying a portion of rule no. two towards the 'investing sister', so there will be plenty of 'defensive cash' in case of a pullback in equity prices.

Here are the new balances for each of the Challenge Project accounts ...

Challenge Project Balances After Rule No. 2 Deposit:

Investing Account Balance: $819.11
(YTD the account is up +2.5% YTD Return is about +1.24% Yield is approximately +6.28% in dividends and additional shares of stock)

• 5.1665 shares of KO (DRIP on for 4.1665 shares)
• 3.1014 shares of JNJ (DRIP on)
• Cash: $336.94
  

-$60.00 of this cash I reserve to D.C.A. KO
-$140.00 of this cash I reserve to D.C.A. JNJ
-This leaves $136.94 cash available

• Additional $106.00 available from slush fund

Investing Account Balance Since Inception
(Can be Enlarged):

Stock / Futures Trading Balance: $1,819.63

( YTD cash contributions, equity and return up about 14 % )

• 2% risk tolerance gives us $36.39 'at risk' levels
• 3% risk tolerance gives us $54.58 'at risk' levels
• Additional $106.00 available from drawdown / slush fund
  

Trading Account Balance Since Inception:
(Can Be Enlarged)

Savings Balance: $425.30

(YTD cash equity up about 112.5 % Return on Capital is 0 %)

• $106.00 for a Slush fund / Drawdown Kill Switch fund
• $213.30 for a Base Savings
• $106.00 for Emergency Savings

Savings Account Balance Since Inception:
(Can Be Enlarged)

Total $500 Challenge Project Balance: $3,064.04

Total Challenge Account Growth Since Inception:
(Can Be Enlarged)

We'll be back to the Challenge Project next Monday.

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Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have over 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

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Week in Review: It's the U.S. Dollar (PODCAST)

"Ah, take the Cash in hand and waive the Rest." - Edward Fitzgerald

Welcome to the Week in Review!

In the beginning of this podcast, I'm going to talk for a bit as to why I pulled back from the twitter stream last week, for those that follow. It had to do more with me, than anyone or anything else ...

(Podcast Included. If you're seeing this entry elsewhere and cannot play the podcast? Click this link to go to the exact podcast entry ...)

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Here is the link to the article I referenced at the Davian Letter regarding aspects of my industry, that I find rather ... distasteful and if I let it, takes me to 'bad' places. Which in turn, inevitably affects my investing and trading.

Here is a link to the video that I had constructed for subscribers some time ago, regarding "reading the tape". If it asks you for a password, try kyeic43

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Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 14 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

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Friday Investing and Trading Review for May 14, 2010 (VIDEO)

"A year ago, it would have been a lot different. But I saw all their moves go by on the ticker. That made the decision pretty easy." - Troy Glaus

Here is the "Friday Review" video, that will review my investing and trading efforts for the last week, based off of comments in last weeks "Airelon's Market Tactics". I already had the video that described my 'delving' into a way to play a long in Oil.

Thankfully ... I cut that loss nice and early. As follows, is the next market I was watching ...

(Video Included. If you're seeing this entry elsewhere and cannot see the Video? Click here to view the entry ...)

Here is the free issue of "Airelon's Market Tactics", where I discuss "reading the tape". Included in that issue, is an accompanying video that illustrates what I'm talking about ...

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Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 14 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Trading Review for May 12, 2010 (VIDEO)

"Discipline is the refining fire by which talent becomes ability." - Roy L. Smith

I took a trade recently, for the Challenge Project, and myself personally. As this is a trade that I discussed for "Airelon's Market Tactics", it will count towards the results of the Model Portfolio that benchmarks the results of the newsletter.

It was a loss. But I think the 'loss' videos are even more important to display, than the wins. I took short videos of my thinking process throughout this trade, which can be found here ...

(Video Included. If you're seeing this entry elsewhere and cannot see the Video? Click here to view the entry ...)

And if you note the Crude Oil market this afternoon? It's a great thing I took my loss, when it was nice and small ...

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Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 14 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

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PAWN STARS !! (VIDEO)

"Look! The best thing that I myself have seen, which is pretty, is that one should eat and drink and see good for all his hard work with which he works hard under the sun for the number of the days of his life that the [true] God has given him, for that is his portion ... and also that every man should eat and indeed drink and see good for all his hard work. It is the gift of God" - Ecclesiastes 5:18; 3:13 - The Bible

Everyone would love to have a job, where they enjoy and love their work. I am fortunate enough to have found such a job with investing, trading, and even a tad bit of writing now.

I've found that I even entertain myself with anything having to do with investing and trading ...

(Video Included. If you're seeing this entry elsewhere and cannot play the video? Click this link to go to the exact video entry ...)

One of my favorite aspects of the show, is that the guys strive to be honest with their customers. They want to know what everything is truly worth, before they start trying to come to an agreement about price.

If that means calling in an expert 4 times in the show? They do it. Because they know that their reputation for honesty means everything in the long run.

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Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 14 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Monday Challenge Project Summary: May 10, 2010

Previous $500 Challenge Project Balances:

"The Three Sisters":

Investing "Sister" Balance: $814.29
Trading "Sister" Balance: $1,776.47
Interest Bearing "Sister" Balance: $425.30
Total Challenge Project Funds: $3,016.06

Introduction:
The original video explanation of the Challenge Project that began with $500, is to be found here. The Challenge Project is basically a demonstration of a model that anyone could at least follow along with on a weekly basis. It is my attempt without cost, to help out the 'little guy' when it comes to investing and trading by providing an example, a 'model' as it were ... as run by myself as a professional trader with real money, in sub-accounts that I own; following my own three sisters portfolio management system; albeit modified a bit to operate with low funds. From time to time, I provide snapshots of the broker statements.

Rule No. 2 of the Challenge Project states that each month, we can divvy up $100.00 as we wish between the various challenge project accounts. We split up Rule No. 2, into weekly segments; or $25.00 a week.

For this week, the $25.00 weekly deposit is being transferred to the Challenge Project TRADING Account.

Trading Account:
Ok.

That whole mess that I was in with the puts last week during "The son of '87"?

I'm not sure if you watched the "Happy Hour" video were I fully explained what happened to me on Thursday and Friday, but those trades, quite accidentally, were in the challenge accounts.

As I said, things can and do go nuts. Now the fill on the puts was horrible, as I have explained; but I decided to hold on and wait to see if we could have a moment of panic on Friday. We did, and as soon as I was profitable past that horrendous fill, I took my $20.00 and went home for the week.

So quite accidentally ... we've had a trade in the Challenge project, and yet another profitable trade this year. We are now up in the trading account 14.12 %.

Now let me say ... that if I thought the capital levels for the Challenge project were adequate to take a trade at the current time; in it's tiny phase? I more than likely wouldn't take it. There is one commodity etf that I may play either today or tomorrow, in the form of an option. I'll have to watch, wait and see. But overall, I'm moving over to the sidelines for my own personal trading; which will naturally carry over to any trading relating to the challenge project as well.

Investing Account:
Now, turning to the dividend 'investing sister' account ... You'll note that Thursdays damaging action didn't hurt me too bad. My capital is still positive, I still have cash available to average down on these great companies if I so choose, and the drawdown that I've experienced is not even 1% (The account levels posted below are as of Friday's close).

Not too bad.

I believe this highlights the need for sound strategy, planning, money management, and portfolio management. After Thursday? Look at the overall balances for the Challenge Project as a whole. As I often say: "It's not how much money you have, it's how you manage it"

At this point, I'm weighing my options. Believe it or not, to my mind, there is more to do on the dividend investing route at the moment, than the trading route. I could average down on the stocks I do own and then start a small hedge at the same time. If I did do this, I'd have to start applying rule no. two to the investing account right away, to build back up our ability to dollar cost average those stocks in the future. At this point, I'm just weighing my options.

Here are the new balances for each of the Challenge Project accounts ...

Challenge Project Balances After Rule No. 2 Deposit:

Investing Account Balance: $807.16
(YTD the account is up +1.005% YTD Return is about -0.2373% Yield is approximately +6.28% in dividends and additional shares of stock)

• 5.1665 shares of KO (DRIP on for 4.1665 shares)
• 3.1014 shares of JNJ (DRIP on)
• Cash: $336.94
  

-$60.00 of this cash I reserve to D.C.A. KO
-$140.00 of this cash I reserve to D.C.A. JNJ
-This leaves $136.94 cash available

• Additional $106.00 available from slush fund

Investing Account Balance Since Inception
(Can be Enlarged):

Stock / Futures Trading Balance: $1,821.56

( YTD cash contributions, equity and return up about 14.12 % )

• 2% risk tolerance gives us $36.43 'at risk' levels
• 3% risk tolerance gives us $54.64 'at risk' levels
• Additional $106.00 available from drawdown / slush fund
  

Trading Account Balance Since Inception:
(Can Be Enlarged)

Savings Balance: $425.30

(YTD cash equity up about 112.5 % Return on Capital is 0 %)

• $106.00 for a Slush fund / Drawdown Kill Switch fund
• $213.30 for a Base Savings
• $106.00 for Emergency Savings

Savings Account Balance Since Inception:
(Can Be Enlarged)

Total $500 Challenge Project Balance: $3,054.02

Total Challenge Account Growth Since Inception:
(Can Be Enlarged)

We'll be back to the Challenge Project next Monday.

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Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have over 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

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Happy Hour Show at the Davian Letter (VIDEO)

"Get together a hundred or two men, however sensible they may be, and you are very likely to have a mob" - Samuel Johnson

I stopped by at the "Happy Hour" show on Friday Evening. If you missed it live, I will repost it here. So instead of listening to two ANCHOR PEOPLE discuss the correction on Thursday? Listen to two market professionals discuss the "son of 87" stock market melt down. This discussion also covers algorithmic or black box trading and what affect, if any, that they may have had. A brief discussion of the euro zone also occurs ...

(Video Included. If you're seeing this entry elsewhere and cannot see the Video? Click here to view the entry ...)

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Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have over 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

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Trading Week in Review?

No, I did not include a "week review" video this week on the investing and trading route. While appearing at the Happy Hour show, in my text, video and podcast entries; along with extra issues of "Airelon's Market Tactics" where I described a loss I experienced in the Gold Market? I think that everyone has an idea how my week progressed ...

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Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have over 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

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Week in Review: Computerized High Frequency Trading and the Son of 87' (PODCAST)

"The nose of a mob is its imagination. By this, at any time, it can be quietly led." - Edgar Allen Poe

Welcome to the Week in Review!

I've discussed how my day went on Thursday progressed, on what we are calling now "the son of '87". We'll discuss this concept that somehow "computers" had something to do with the drop. A drop, that when you look at history ... was not that large ...

Because when you ask me? I think the computerized, quant algorithms may have saved us on Thursday ...

(Podcast Included. If you're seeing this entry elsewhere and cannot play the podcast? Click this link to go to the exact podcast entry ...)

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You know, if you look through my "Twitter" history, you'll see, that while the market was crashing? I told Dasan: "I was thinking the same thing. Iwant to buy just 100 shares of something, to say I did it". But I didn't. I refrained.

A blackbox won't hesitate.

And remember ... pro's use the "%"

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Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have over 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

Happy Hour Show at the Davian Letter

I'll be appearing on the Happy Hour Show with Anthony Davian - and this evening there will no doubt be a LOT to discuss. I will post the link here, as soon as I have it around 6:30 pm to 7:00 pm EST

Edit: Here's the link

Edit: We had a GREAT time, and I'll repost it when they have it posted. We discussed everything from "the son of 87" to Eurozone credit worries, to moves made by the Fed in the Great Depression.

Are You Ready, Really Ready to Sit Down at This Table and Play a Hand? (DOW Drops 1,000 points, up 650) (VIDEO)

"Stock market bubbles don't grow out of thin air. They have a solid basis in reality, but reality as distorted by a misconception." - George Soros

"If you have trouble imagining a 20% loss in the stock market, you shouldn't be in stocks." - John (Jack) Bogle

"A market is the combined behavior of thousands of people responding to information, misinformation and whim." - Kenneth Chang

Ok, this even was just too huge. I've had numerous phone calls. Numerous conversations about the events of Thursday, May 6, 2010 in the U.S. Equities markets. So as I'm known for videos, I thought today would be a day, to put a video together; in addition to the blog entry that I had earlier.

As follows, are my thoughts, as well as a "play by play" as to how my day went ...

(Video Included. If you're seeing this entry elsewhere and cannot play the video? Click this link to go to the exact video entry ...)

What did I say a few days ago?

Remember, the credit markets rallied yesterday, as well as today ... which is what you'd want to see, when the stock market and commodities plummet. If the credit markets fall, while the stock market falls ...

Then it's time to worry.

But remember this as well. We saw a day just like today ... in 1987? Before the big drop.

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Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have over 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

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May 6, 2010 in the U.S. Equities Markets

If you can handle what just happened in today's markets, and a whole lot more ... with real money on the line; then you just may be ready to trade and invest.

There is going to be a lot of emotion in the next few days. Quite frankly ... I don't really care what people think happened or didn't happen. This is my chosen profession, and I'm not going to bellyache over what happened in the past. If I get screwed, then I may try to fight it (I've had to go to bat against desks before, and I don't wish that scenario on an enemy); so I 'm not going to let myself just get screwed over, smile and take it. If you let them, the street will do that in a heartbeat. But I understand that the past, is the past and you have to live with mistakes in this business. Whoever makes them. So you had best have some sort of risk management defense mechanisms in place beforehand.

Literally, about 20 seconds before the dam burst, I put in order to buy some SPY puts. The entire system froze as I tried to put in the order. Yeah, I thought I missed the entire market drop, and to me, the markets were nothing more than a curiosity.

I came back about 15 minutes later, and found at that the orders were filled, and I was now holding those puts. The price wasn't really that attractive either.

Then everything flipped, turned upside down, and then and everyone started crying about the reasons why it happened.

Call "May 6th, 2010 in the U.S. Equities Markets" what you will. Call it a "fat finger" mistake. Blame it on high frequency trading, quants and algorithms; I don't care. In fact, I'm not buying the "fat finger" argument. There was fear there. You felt it, and I felt it. But the point is, that moment is in the past, it happened, and none of us are "Superman". We can't fly around the planet, turn back time, and do things differently. It happened. You have to live with the decisions you made.

Myself? This is why I preach about money management principles. I'm holding onto those puts, because the risk is assymetrical, and it's a very small position.

I'll hold the puts, and see what Friday brings us. I knew what I was signing up for, when I sat down at the table to play a hand.

* * *

Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have over 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

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State of the Economy: The Continuing State of "Drag" (And Peter Schiff is Still Wrong) (VIDEO)

"Anyone who has ever struggled with poverty knows how extremely expensive it is to be poor." - James Arthur Baldwin

With the dive the stock markets and some of the metals took recently, and the absolutely parabolic moves in the U.S. Dollar, ones have asked for my thoughts regarding the "state of the economy".

As follows, are my thoughts ...

(Video Included. If you're seeing this entry elsewhere and cannot play the video? Click this link to go to the exact video entry ...)

Remember, the credit markets rallied yesterday, which is what you'd want to see, when the stock market and commodities plummet. If the credit markets fall, while the stock market falls, as well as the credit markets ...

Then it's time to worry.

* * *

Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have over 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

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Infrastructure Stimulus Interrupts Our Regularly Scheduled Blog ...

Yeah ... I wanted to have a vlog entry today. But as a myriad loud, heavy pieces of machinery are resurfacing the street outside my house, it's pretty much impossible to record anything at the moment.

Look for a "State of the Economy" vlog entry this week, as well as another "fun" entry ...

Edit: If you're wondering how I did today amidst a parabolic dollar, and diving stock market? I had a fantastic day, and have one word:

Hedged

* * *

Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have over 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

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Monday Challenge Project Summary: May 3, 2010

Previous $500 Challenge Project Balances:

"The Three Sisters":

Investing "Sister" Balance: $818.83
Trading "Sister" Balance: $1,751.47
Interest Bearing "Sister" Balance: $425.30
Total Challenge Project Funds: $2,995.60

Introduction:
The original video explanation of the Challenge Project that began with $500, is to be found here. The Challenge Project is basically a demonstration of a model that anyone could at least follow along with on a weekly basis. It is my attempt without cost, to help out the 'little guy' when it comes to investing and trading by providing an example, a 'model' as it were ... as run by myself as a professional trader with real money, in sub-accounts that I own; following my own three sisters portfolio management system; albeit modified a bit to operate with low funds. From time to time, I provide snapshots of the broker statements.

Rule No. 2 of the Challenge Project states that each month, we can divvy up $100.00 as we wish between the various challenge project accounts. We split up Rule No. 2, into weekly segments; or $25.00 a week.

For this week, the $25.00 weekly deposit is being transferred to the Challenge Project TRADING Account.

With this weeks application of Rule No. 2, we have increased the trading accounts capital this year by 11.29%. We've had a three trades this year, one of them a loss, and that turned out being only something like $13 or $14, including commissions. We'll continue to apply Rule No. 2 towards the Trading account this quarter. I'd personally like to add another two or three percent capital gain before I attempt another trade.

Therefore, the number of trades are increasing as the capital increases in the trading account. With a greater sample rate of my own trades, we'll be able to generate some real money management numbers soon enough.

On the 'investing sister' route, it should be noted that I moved the profits / cash away from the Sharebuilder account from the McDonalds (MCD) sale, and moved that $139.81 over to the ThinkorSwim account. The Cocoa-Cola (KO) holdings, as well as the Johnson & Johnson (JNJ) holdings continue to be held at Sharebuilder, and the DRIP is turned on for both of these stocks.

Here are the new balances for each of the Challenge Project ...

Challenge Project Balances After Rule No. 2 Deposit:

Investing Account Balance: $814.29
(YTD the account is up +1.897% YTD Return is about +0.6439% Yield is approximately +6.28% in dividends and additional shares of stock)

• 5.1665 shares of KO (DRIP on for 4.1665 shares)
• 3.1014 shares of JNJ (DRIP on)
• Cash: $336.94
  

-$60.00 of this cash I reserve to D.C.A. KO
-$140.00 of this cash I reserve to D.C.A. JNJ
-This leaves $136.94 cash available

• Additional $106.00 available from slush fund

Investing Account Balance Since Inception
(Can be Enlarged):

Stock / Futures Trading Balance: $1,776.47

( YTD cash contributions, equity and return up about 11.29 % )

• 2% risk tolerance gives us $35.52 'at risk' levels
• 3% risk tolerance gives us $53.29 'at risk' levels
• Additional $106.00 available from drawdown / slush fund
  

Trading Account Balance Since Inception:
(Can Be Enlarged)

Savings Balance: $425.30

(YTD cash equity up about 112.5 % Return on Capital is 0 %)

• $106.00 for a Slush fund / Drawdown Kill Switch fund
• $213.30 for a Base Savings
• $106.00 for Emergency Savings

Savings Account Balance Since Inception:
(Can Be Enlarged)

Total $500 Challenge Project Balance: $3,016.06

Total Challenge Account Growth Since Inception:
(Can Be Enlarged)

We'll be back to the Challenge Project next Monday.

* * *

Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have over 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

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Do you Enjoy "Airelon's Investing and Trading Blog" ?

Do you find the information here helpful? What do you think about the level of education I provide? What do you feel about the 'entertainment value' that I provide? Is there 'value' in "Airelon's Investing and Trading Blog" ?

Well, how about heading over to "Investimonials" and letting the world know?

Week in Review: Investor Insurance Market and Dangerous Populist Mob Irrationality (PODCAST)

"Passion is the mob of the man, that commits a riot upon his reason" - William Penn

Welcome to the Week in Review!

Woah. Do I have a lot to get through in the following podcast, that discusses the occurrences, happenings and news events occurring around the Capital markets. We can discuss the oil spill in the Gulf of Mexico and what to do if you are a BP investor to protect yourself; when things go bad wrong when you are an investor in a particular company. We discuss the capital markets. And we discuss a little "alleged" letter being circulated on "Wall Streeter".

So let's 'get er' done' in the following podcast ...

(Podcast Included. If you're seeing this entry elsewhere and cannot play the podcast? Click this link to go to the exact podcast entry ...)

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Click here to download this podcast.

This is the piece over at Joshua Browns "Reformed Broker" blog that I refer to in the podcast. Take a look through the comment section.

Here is the link to the blog entry that I wrote on the "Real Recession" on April 4, 2008, and the accompanying video ...



Here is the link to the entry that I wrote on the "Philosophical Reasons Behind the Challenge Project", and the accompanying video ...

Now after that? Read through some of the comments in Joshua Brown's blog entry. Listen to the comments on the part of senators who are grilling Goldman Sachs (GS).

Seriously. That's what I find of cause for concern. The populist, maddened, irrational "mob mentality". Few things in mankinds' history, have proven more destructive.

* * *

Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have over 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

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