A Look Back at a Look Forward ...

Yeah, yeah ... I said I wouldn't have a post for a few days.

So sue me.

This really won't take that long to put together. I was just reading over some of my previous work regarding my outlook for this last year of 2010

So here it is, via Scribbed. You can either look at and download the following link for... Airelon's Market Tactics No. 8 ... which in 2009 was my look ahead to 2010.

Or, you can read what follows below ...



Airelon's Market Tactics No. 8 on the Look ahead to 2010

* * *

Note: The above statements should not be construed as an investment or trading recommendation. Airelon's Investing and Trading Journal is a blog that allows subscribers to look 'over my shoulder' as it were, for my own personal specific trading and investing ideas and thoughts for the next week. But they are only thoughts as of the moment of publication, and are subject to change.. Any trades or investments that I discuss within this blog are simply my own thoughts regarding my own investing and trading outlook. Remember that entering any market is an individual decision. There is no guarantee that I will enter, or have entered any of the trading or investing ideas that I discuss in this blog; as larger accounts may require a different strategy as the ones presented here. This blog simply contains my trading and investing thoughts for the next week. I, the author do not grant this work for wide distribution beyond any single individual subscriber as this publication is protected by U.S. And International Copyright laws. All rights reserved. No license is granted to the user except for the user's personal use. No part of this publication or its contents may be copied, downloaded, stored in a retrieval system, further transmitted or otherwise reproduced, stored, disseminated, transferred, or used, in any form or by any means except as permitted under the original subscription agreement or with prior written permission. I personally only enter any market after watching and reading the tape and I trade using money management principles. The losses in trading can be very real, and depending on the investment vehicle and market, 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. Airelon's Challenge Chronicles are demo accounts,with all of the inherent problems therein, which are used within this blog in an attempt to track the results of my own thought processes., and is run as a model. Traders who should make their own decisions based off their own research, due diligence, and tolerance for risk. Any pictures used within this blog are believed to be public domain. Any charts that displayed using the ThinkorSwim platform, or any other charting software are believed to be public domain. Any other pictures were obtained through Wikipedia's public domain policy. As a reminder, any trades discussed for "Airelon's Challenge Chronicles" would only be 'day trades' according to the parameters discussed for Airelon's Challenge Chronicles, at this stage of the game in order to escape the risk of over-leveraged gap opens in the commodity futures markets. As a 'trading sister' would have grown to the $30,000 level, I would have graduated the account into 'swing trading'. In addition, it is understood that readers have read my YouTube methodology series. It is also understood that the writer of this blog has repeatedly warned against the dangers of shadowing any other traders thoughts. 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.

Taking Some Time Off ...

I'll be taking some time off from the blog here; so don't be surprised if you don't see a post for a few days.

I am a man that believes in some compensation for what I do here, but I do not ask for money. The advertisement 'route' seemed to make sense. But, since I think it is unconscionable for religion and religious holidays to be mixed up with commercial businesses, I have removed the advertising on all blip.tv videos until after the holidays. So if you wanted to enjoy review some of those blip.tv videos in terms of the playlists? Enjoy them commercial free until after the holidays ...

Monday $500 Challenge Project Summary: December 20th, 2010

Previous $500 Challenge Project Balances:

"The Three Sisters":

Investing "Sister" Balance: $1,008.04
Trading "Sister" Balance: $2,219.36
Side-pocket Savings "Sister" Balance: $575.00
Total Challenge Project Funds: $3,802.70

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 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. As I mentioned on August 10th, I have liquidated all of the other personal accounts that I've discussed on this blog for the last 4 years, and to emphasize the strength of these principles? I will demonstrating my success, again, this time it will be live, with the 'Challenge Project', full time.

For this week, the $25.00 weekly deposit is being transferred to the Challenge Project SIDE-POCKET SAVING Account.

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

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

Challenge Project Balances After Rule No. 2 Deposit:

Goals for Each Account By the Time I Trade Challenge Project Full Time

• Investing Account: $580.00 in cash past equity positions
• Trading Account: $2,600.00
• Savings Side-Pocket Account: $900.00

Investing "Sister" Account: $1,023.56
(YTD the account is +28.08% YTD Return is about +12.59% Continuing Yield is approximately +6.96% in cash dividends and additional shares of stock)

• 6.2685 shares of KO (DRIP is on for 4.2685 shares)
• 5.1856 shares of JNJ (DRIP is on for 3.1856 shares)
  
• Cash: $285.41
  

-$38.41 of this cash I reserve for 'maneuvering' capital ( 3.753%)
-$ 3.00 of this cash I reserve to D.C.A. KO ( 0.2931% )
-$24.00 of this cash I reserve to D.C.A. JNJ ( 2.345% )
-This leaves $220.00 cash available for a new purchase ( 21.49% )

• Additional $150.00 available from slush fund, up to $1,173.56
  

Investing Account Balance Year to Date
(Can be Enlarged)

Trading "Sister" Account: $2,219.36

( YTD cash contributions, equity and return up about 37.49 % )

• 2% risk tolerance gives us $44.38 'at risk' levels
• 3% risk tolerance gives us $66.58 'at risk' levels
• Additional $150.00 available from draw-down / slush fund, to $2,369.36
  

Trading Account Balance Year to Date:
(Can Be Enlarged)

Savings Side-Pocket "Sister" Account: $600.00
(YTD cash equity up about 199.6 % Return on Capital is 0 %)

• $150.00 for a Slush fund / Draw-down Kill Switch fund
• $300.00 for a Base Savings
• $150.00 for Emergency Savings

Savings Side-Pocket Account Balance Year to Date:
(Can Be Enlarged)

Total $500 Challenge Project Balance: $3,842.92

* * *

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

Airelon's Challenge Chronicles No. 5: Some Time Off - Broad Market Thoughts (PODCAST)

So what is "Airelon's Challenge Chronicles"? You can find a description by clicking here.

I discuss my overall thoughts on the current market overall as 2010 wraps up ...

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

Powered by Podbean.com

Click here to download this podcast.

Then, as the markets continues to evolve? My thoughts will continue to evolve and I may filter out markets, or focus in on specific markets; as I describe in my "Trading Methodology" series. I'll update as best I can on this blog throughout the week as that 'filtering' process takes place.

As follows is a summary of the "Challenge Chronicle" 'three sister' accounts as of this evening ...

Investing "Sister" Account: $1,398.16
(YTD the account is +7.003% Return on Capital from Inception of A.C.C. is +2.681% Continuing Yield is approximately +10.11% in cash dividends and additional shares of stock)

• 6.5958 shares of KO (DRIP is on for 4.5958 shares)
• 5.1856 shares of JNJ (DRIP is on for 3.1856 shares)
• 10 shares of GIS (DRIP is on for 10 shares)
  
• Cash: $276.71 (screwed up a previous balance by making the balance higher (Added rule no. two twice) This balance is correct)
  

-$127.00 of this cash I reserve for 'maneuvering' capital (9.083%)
-$ 35.00 of this cash I reserve to D.C.A. KO ( 2.503% )
-$ 72.00 of this cash I reserve to D.C.A. JNJ ( 5.15% )
-$ 21.96 of this cash I reserve to D.C.A. GIS ( 1.571% )
-This leaves $20.75 cash available for a new purchase ( 1.484% )

• Additional $225.00 available from slush fund, up to $1,531.66
  

Trading "Sister" Account: $2,609.82

( YTD the account is +4.393% Return on Capital from Inception of A.C.C. is +2.346% )

• 2% risk tolerance gives us $52.19 'at risk' levels
• 3% risk tolerance gives us $78.29 'at risk' levels
• Additional $225.00 available from draw-down / slush fund, to $2,834.82
  

Savings Side-Pocket Balance: $900.00

(YTD cash equity up about 0.00 % Return on Capital is 0.00 %)

• $225.00 for a Slush fund / Draw-down Kill Switch fund
• $289.30 for a Base Savings
• $225.00 for Emergency Savings

Total Airelon's Challenge Chronicles Balance: $4,907.98 (Return on Capital 2.002 %)

And once again, here are the money management performance metrics as they exist this evening ...



* * *

Note: The above statements should not be construed as an investment or trading recommendation. Airelon's Investing and Trading Journal is a blog that allows subscribers to look 'over my shoulder' as it were, for my own personal specific trading and investing ideas and thoughts for the next week. But they are only thoughts as of the moment of publication, and are subject to change.. Any trades or investments that I discuss within this blog are simply my own thoughts regarding my own investing and trading outlook. Remember that entering any market is an individual decision. There is no guarantee that I will enter, or have entered any of the trading or investing ideas that I discuss in this blog; as larger accounts may require a different strategy as the ones presented here. This blog simply contains my trading and investing thoughts for the next week. I, the author do not grant this work for wide distribution beyond any single individual subscriber as this publication is protected by U.S. And International Copyright laws. All rights reserved. No license is granted to the user except for the user's personal use. No part of this publication or its contents may be copied, downloaded, stored in a retrieval system, further transmitted or otherwise reproduced, stored, disseminated, transferred, or used, in any form or by any means except as permitted under the original subscription agreement or with prior written permission. I personally only enter any market after watching and reading the tape and I trade using money management principles. The losses in trading can be very real, and depending on the investment vehicle and market, 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. Airelon's Challenge Chronicles are demo accounts,with all of the inherent problems therein, which are used within this blog in an attempt to track the results of my own thought processes., and is run as a model. Traders who should make their own decisions based off their own research, due diligence, and tolerance for risk. Any pictures used within this blog are believed to be public domain. Any charts that displayed using the ThinkorSwim platform, or any other charting software are believed to be public domain. Any other pictures were obtained through Wikipedia's public domain policy. As a reminder, any trades discussed for "Airelon's Challenge Chronicles" would only be 'day trades' according to the parameters discussed for Airelon's Challenge Chronicles, at this stage of the game in order to escape the risk of over-leveraged gap opens in the commodity futures markets. As a 'trading sister' would have grown to the $30,000 level, I would have graduated the account into 'swing trading'. In addition, it is understood that readers have read my YouTube methodology series. It is also understood that the writer of this blog has repeatedly warned against the dangers of shadowing any other traders thoughts. 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.

Week in Review Podcast: Live Interaction, Life and Oil Prices (PODCAST and VIDEO)

"I have a rendezvous with death ... and I to my pledged word am true ... I shall not fail, that rendezvous." - Alan Seeger

Welcome to the Week in Week in Review podcast!

Wow ... I've been through the wringer the week emotionally and psychologically. Literally, from death ... to life. I discuss this, and matters regarding oil inflation 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 ...)

Powered by Podbean.com

Click here to download this podcast.

If you prefer the YouTube video version of the podcast, and I have not included a few charts on the video ...

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



* * *

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.

Portfolio Management Decisions ?

"There are always ... possibilities" - Mr. Spock

Well, Coca-Cola (KO) went ahead and popped above $65.00 a share as I thought it would. Some have asked me if I will now sell Coca-Cola (KO) as I did with McDonalds (MCD). Well, let me just say this ... McDonalds (MCD) was a great long, but a different set of circumstances. There are more things to do than simply "buy" or "sell" when it comes to investing.

Coca-Cola (KO)
Daily Chart

To date, I've been setting a little cash aside to dollar cost average more on the stocks held like Johnson & Johnson (JNJ) and Coca-Cola (KO) ... correct? Now add to that point, the fact that the dividend investing 'sister' account is a little short on cash from a maintenance standpoint.

It looks a little something like this from the last listing of the Challenge Project:

-$26.45 of this cash I reserve for 'maneuvering' capital ( 2.624 % )
-$13.00 of this cash I reserve to D.C.A. KO ( 1.29 % )
-$24.00 of this cash I reserve to D.C.A. JNJ ( 2.381 % )
-This leaves $220.00 cash available for a new purchase ( 21.82% )

And like this for "Airelon's Challenge Chronicles" ...

-$110.00 of this cash I reserve for 'maneuvering' capital (8.1%)
-$ 62.00 of this cash I reserve to D.C.A. KO ( 4.565% )
-$ 72.00 of this cash I reserve to D.C.A. JNJ ( 5.302% )
-$ 70.00 of this cash I reserve to D.C.A. GIS ( 5.154% )
-This leaves $10.75 cash available for a new purchase ( 0.7916% )

So ... what I'm thinking is this: If Coca-Cola (KO) maintains this break out above $65.00 (in other words, a headfake doesn't manifest itself), then I'll decrease the amount being held in reserve to dollar cost average Coca-Cola (KO). By how much will I reduce the reserve? We'll have to see when the time comes to make that decision. Where else will I then weight that cash for? Again, we'll have to see when the time comes to make that decision.

Portfolio management is a game of chess. Some liken it to poker. It's not just about 'buy or sell'. It's also how you 'stack your chips' as it were, or 'pre-position your pieces'.

* * *

Note: The above statements should not be construed as an investment or trading recommendation. Airelon's Investing and Trading Journal is a blog that allows subscribers to look 'over my shoulder' as it were, for my own personal specific trading and investing ideas and thoughts for the next week. But they are only thoughts as of the moment of publication, and are subject to change.. Any trades or investments that I discuss within this blog are simply my own thoughts regarding my own investing and trading outlook. Remember that entering any market is an individual decision. There is no guarantee that I will enter, or have entered any of the trading or investing ideas that I discuss in this blog; as larger accounts may require a different strategy as the ones presented here. This blog simply contains my trading and investing thoughts for the next week. I, the author do not grant this work for wide distribution beyond any single individual subscriber as this publication is protected by U.S. And International Copyright laws. All rights reserved. No license is granted to the user except for the user's personal use. No part of this publication or its contents may be copied, downloaded, stored in a retrieval system, further transmitted or otherwise reproduced, stored, disseminated, transferred, or used, in any form or by any means except as permitted under the original subscription agreement or with prior written permission. I personally only enter any market after watching and reading the tape and I trade using money management principles. The losses in trading can be very real, and depending on the investment vehicle and market, 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. Airelon's Challenge Chronicles are demo accounts,with all of the inherent problems therein, which are used within this blog in an attempt to track the results of my own thought processes., and is run as a model. Traders who should make their own decisions based off their own research, due diligence, and tolerance for risk. Any pictures used within this blog are believed to be public domain. Any charts that displayed using the ThinkorSwim platform, or any other charting software are believed to be public domain. Any other pictures were obtained through Wikipedia's public domain policy. As a reminder, any trades discussed for "Airelon's Challenge Chronicles" would only be 'day trades' according to the parameters discussed for Airelon's Challenge Chronicles, at this stage of the game in order to escape the risk of over-leveraged gap opens in the commodity futures markets. As a 'trading sister' would have grown to the $30,000 level, I would have graduated the account into 'swing trading'. In addition, it is understood that readers have read my YouTube methodology series. It is also understood that the writer of this blog has repeatedly warned against the dangers of shadowing any other traders thoughts. 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.

Oh Look! May I have Another? Coca-Cola (KO) Dividend Pay Date ...

Yes, another dividend for today, December 15th, 2010. Today is the pay date for Coca-Cola (KO) stock. $0.44 a share. This obviously affects both the Challenge Project, as well as the account for "Airelon's Challenge Chronicles". Both will be recorded in the same way.

What a ride.

Seriously.

As I mentioned yesterday on the Facebook page, we saw a break lower in prices yesterday on the news of completion of the acquisition of Nigerian Bottling Company (NBC). For those who want to dump out of KO, I can understand due to the incredible appreciation. Myself? I'll hold it through any further acquisitions. $126 million is chump change, and KO already owns most of NBC (sixty something percent if memory serves me correctly). Coca-Cola (KO) is really just completing an acquisition more than announcing something out of left field. And with a thirty percent premium over it's current price? NBC shareholders are being treated more than fairly.

This is all especially sweet when you consider the fact that I feel I made a couple of mistakes with the initial purchase of Coca-Cola (KO). Doesn't matter with Dividend DRIP investing. What matters, is survivability. The main trick with investing, any investing ... is knowing fundamentals. Knowing about survivability. Which isn't really that difficult. A company worth billions, paying out a little over 100 million for a company they already own sixty-some-odd percent of?

I'm not really too worried.

Would I buy more of Coca-Cola (KO) right now?

No.

Am I enjoying the ride?

Yes.

I swear, the last few years? It's as if I'm playing in a money playground ...



* * *

Note: The above statements should not be construed as an investment or trading recommendation. Airelon's Investing and Trading Journal is a blog that allows subscribers to look 'over my shoulder' as it were, for my own personal specific trading and investing ideas and thoughts for the next week. But they are only thoughts as of the moment of publication, and are subject to change.. Any trades or investments that I discuss within this blog are simply my own thoughts regarding my own investing and trading outlook. Remember that entering any market is an individual decision. There is no guarantee that I will enter, or have entered any of the trading or investing ideas that I discuss in this blog; as larger accounts may require a different strategy as the ones presented here. This blog simply contains my trading and investing thoughts for the next week. I, the author do not grant this work for wide distribution beyond any single individual subscriber as this publication is protected by U.S. And International Copyright laws. All rights reserved. No license is granted to the user except for the user's personal use. No part of this publication or its contents may be copied, downloaded, stored in a retrieval system, further transmitted or otherwise reproduced, stored, disseminated, transferred, or used, in any form or by any means except as permitted under the original subscription agreement or with prior written permission. I personally only enter any market after watching and reading the tape and I trade using money management principles. The losses in trading can be very real, and depending on the investment vehicle and market, 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. Airelon's Challenge Chronicles are demo accounts,with all of the inherent problems therein, which are used within this blog in an attempt to track the results of my own thought processes., and is run as a model. Traders who should make their own decisions based off their own research, due diligence, and tolerance for risk. Any pictures used within this blog are believed to be public domain. Any charts that are displayed using the ThinkorSwim platform, and other pictures were obtained through Wikipedia's public domain policy. As a reminder, any trades discussed for "Airelon's Challenge Chronicles" would only be 'day trades' according to the parameters discussed for Airelon's Challenge Chronicles, at this stage of the game in order to escape the risk of over-leveraged gap opens in the commodity futures markets. As a 'trading sister' would have grown to the $30,000 level, I would have graduated the account into 'swing trading'. In addition, it is understood that readers have read my YouTube methodology series. It is also understood that the writer of this blog has repeatedly warned against the dangers of shadowing any other traders thoughts. 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.

Johnson & Johnson (JNJ) Dividend Pay Date ...

Today, December 14th, 2010 is the pay date for Johnson & Johnson (JNJ) stock. $0.54 a share. This obviously affects both the Challenge Project, as well as the account for "Airelon's Challenge Chronicles".

Again, for the Challenge Project ... I have arranged for a partial DRIP. One brokerage has the shares paying the straight cash. The other brokerage has some of the shares enrolled in DRIP (Dividend ReInvestment Plan). Both "Airelon's Challenge Chronicles" and the Challenge Project will record the numbers in the same way.

Operating cash flow has been up for the year, as well as ... interestingly enough, financing cash flow. All in all ... I love this stock. It's provided some wonderful opportunities to get long in the last year ... when other dumb money was talking about JNJ going "bankrupt" (yes, if you can believe it, I actually heard that).

* * *

Note: The above statements should not be construed as an investment or trading recommendation. Airelon's Investing and Trading Journal is a blog that allows subscribers to look 'over my shoulder' as it were, for my own personal specific trading and investing ideas and thoughts for the next week. But they are only thoughts as of the moment of publication, and are subject to change.. Any trades or investments that I discuss within this blog are simply my own thoughts regarding my own investing and trading outlook. Remember that entering any market is an individual decision. There is no guarantee that I will enter, or have entered any of the trading or investing ideas that I discuss in this blog; as larger accounts may require a different strategy as the ones presented here. This blog simply contains my trading and investing thoughts for the next week. I, the author do not grant this work for wide distribution beyond any single individual subscriber as this publication is protected by U.S. And International Copyright laws. All rights reserved. No license is granted to the user except for the user's personal use. No part of this publication or its contents may be copied, downloaded, stored in a retrieval system, further transmitted or otherwise reproduced, stored, disseminated, transferred, or used, in any form or by any means except as permitted under the original subscription agreement or with prior written permission. I personally only enter any market after watching and reading the tape and I trade using money management principles. The losses in trading can be very real, and depending on the investment vehicle and market, 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. Airelon's Challenge Chronicles are demo accounts,with all of the inherent problems therein, which are used within this blog in an attempt to track the results of my own thought processes., and is run as a model. Traders who should make their own decisions based off their own research, due diligence, and tolerance for risk. Any pictures used within this blog are believed to be public domain. Any charts that are displayed using the ThinkorSwim platform, and other pictures were obtained through Wikipedia's public domain policy. As a reminder, any trades discussed for "Airelon's Challenge Chronicles" would only be 'day trades' according to the parameters discussed for Airelon's Challenge Chronicles, at this stage of the game in order to escape the risk of over-leveraged gap opens in the commodity futures markets. As a 'trading sister' would have grown to the $30,000 level, I would have graduated the account into 'swing trading'. In addition, it is understood that readers have read my YouTube methodology series. It is also understood that the writer of this blog has repeatedly warned against the dangers of shadowing any other traders thoughts. 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.

Week in Review Podcast: Econo-Bears on the Stock Market and Inflation (PODCAST and VIDEO)

"Even though the stock market has rightly been called the triumph of the optimists, with bulls stomping bears over and over for one hundred years, stock market bears not only haven't gone away, but they generally have the most compelling arguments. Their points seem so [...] plausible, level-headed, empirical, and reasonable, while bulls come across as starry-eyed idealists" - Paul Kedrosky

Welcome to the Week in Week in Review podcast!

Some time ago, I discussed the fact that I have this little personality flaw. I like to 'poke the dog with the stick' as it were. Poke a friendly bit of fun with folks who have just silly economic arguments.

Lately? I think they've been having their revenge, and poking me with the stick to get me riled up. Not that I believe my economic thoughts are silly. But they know how to rile me up. How? Why? I discuss that in this "week in review" 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 ...)

Powered by Podbean.com

Click here to download this podcast.

If you prefer the YouTube video version of the podcast, and I have included a few charts on the video ...

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



Here is the video that I discussed in the podcast that has to do with quantitative easing, and the bond market ....

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



* * *

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.

Airelon's Challenge Chronicles 3.9: An Explanation

So what is "Airelon's Challenge Chronicles"? You can find a description by clicking here.

I have a few tools, which, believe it or not, I have yet to reveal. Even after nearly four years of blogging.

Some of these tools I've hinted at, and a few folks have come to know about them. One of them I developed from two or three other tools. I call it an "S Swing" Point. Since there are a handful of folks that are aware of this tool, I figure it would only be fair to freely disseminate the specifics of this tool in today's blog entry ...

(Reprinted from my own "Airelon's Market Tactics of November 16, 2009")

“The S Swing Point”
“The future is something which everyone reaches at the rate of sixty minutes an hour, whatever he does, whoever he is” - C. S. Lewis

As I have related many times, Larry Williams was the market educator who sort of “set my head on straight”. I always appreciated the fact that Larry always suggested we, his students, develop the ability to create our own technical tools. One way to do this? Is to take the bits and pieces of other technical tools and combine them with other ideas and theories.

I wish to now discuss what is probably one of my favorite tools. I call it a “S Swing Point”. I use it primarily as an entrance timing tool, or trigger, since I am a swing point, or “pivot” trader. So when I put into use, a “S Swing Point”, I'm using it as a pivot entrance. I wanted to talk about it's construction early on in the history of this newsletter, for my new subscribers.

Let's begin by talking theory. No, I'm not going to delve into mathematics too heavily. But let's just rationally and logically discuss what many of us are already aware of when it comes to trading, and market theory. We know that there are two aspects to a market, that all intelligent traders are concerned with. One is price. What price level can I obtain a particular security or derivative? From this, we have the basic concepts of support and resistance. The other aspect is that of time. What time will it be opportune to step in and buy a particular security and derivative?

There have been arguments for decades, as to which aspect of trading is more important. Time. Or Price? Back and forth. I personally am skewed towards the aspect of time.

But there are are many such arguments in this industry. Technical analysis versus fundamental analysis. Investing versus trading. I am the type of person who always looks for a “win win” scenario. As I explained last week with the “three sisters”, I am a trader. I'm also an investor. In other words, I don't trade exclusively. Nor do I invest exclusively. I see “trading versus investing” arguments as pointless. Why not do both, and recognize the strengths and weaknesses of each. The same is true with technical and fundamental analysis. I trade technically, and fundamentally. I look for “win win” scenarios.

So let's apply that to the argument of time versus price. What if we could develop a tool that looks for an area of price and time? This should in fact be the goal of every trader and investor.


One tool of Larry's that I've always enjoyed, is his 1.28 rule, which concerns itself with time. Let's talk about the 1.28 rule a bit, as it is the basis for my “S Swing Point”. At the same time, I hope to demonstrate this concept in action. That is, how to develop your own tools from the parts of other tools.

We all notice that the market swings between highs and lows. Pretty basic. The highest highs, and lowest lows of these market swings become known as “swing points” or “pivot points”. Myself, since I'm an old-school guy, I prefer the term “swing points”. At times, the market swings behave orderly. Let's take a look at December Corn [this is from 2009] for example on the Daily Chart as it appeared on Wednesday night …



Notice that the swing points come at seemingly equidistant points in time. Of course notice too, in price that at times, the market will hover near a support or resistance level, and hold. But support and resistance lines are never exact. It will pop a little bit below a support level, fool a bunch of traders with what is commonly referred to as a “squeeze” and then head higher. Neither do the swing points arrive in equidistant moments in time. The cycles are off, by just a small amount. The 1.28 rule attempts to quantify the “off” aspect of the timing of the
swing points.

Take for example the two low swing points on November the 2nd, and November the 6th on the following daily chart. Between these swing point lows, is a swing point high. Regardless, to find the next high using the 1.28 rule, take the number of days between the swing point lows, and multiply that number by 1.28. Thus, 4 * 1.28 = 5.12. You then count 5.12 days forward, from the swing point high on November the 4th.



And as we see this week [remembering this is a reprint from 2009], we got a reversal at the 1.28 rule that was most definitely 'tradeable'. In fact, if you note my Tweets last week [2009], as well as my free “Week in Review” podcast [2009], you'll note that this is a market that I just “creamed” (Sorry, couldn't resist).

But the 1.28 rule has it's drawbacks. It's not exact as it works best at causing you to look at a particular time period, but says nothing about price. And let's face it … even when considering the time aspect, the market simply cannot function off a basis of pure 1.28 swing points. Random news events arise, and the market enters periods of extreme volatility in which swing points, or pivot points are 'thrown to the wind' as it were.

I therefore decided to start reinforcing this concept of “time and price” with another tool I developed when one day, I was sort of fooling around with Fibonnaci Fans with one of my brokers platforms, from the swing points I was using for 1.28 construction. I began to notice that at certain times the 50% line of the Fibonnaci Fan that bisects the forward swing points would intersect with the 1.28 reversal day.


Simply bisect points b and c by 50%. These 50% bisections will point to a price level. And if you notice, this bisection will often point to a price level that is right past the support or resistance level.

This is why I tell people, that support and resistance are not an exact lines of price, simply because XYZ is at $10.00. This is why I refer to them 'zones' of support and resistance. If XYZ is at $10.00, it doesn't mean that the resistance is $10.00, and $10.01, that XYZ's resistance has been violated. In fact, over the years I noted thousands of examples that this bisection tool points to true areas of resistance or support. But the bisection tool is not to be used alone. Again, only when used in conjunction with the 1.28 rule.

I usually begin to use this tool after I have examined other filters. As I mentioned last week to better increase my edge I use as filters ...

• Seasonality: Seasonal tendencies occur in the market, and I study both the strength, and dependability of annual, seasonal moves.
• Larger Trend and Market Cycles
• Commitment of Traders Report

So I apply this as one of my tools, in such situations. Thus, we arrive at the end result. An “'S' Swing Point”. I just got in the habit of calling it a “S” Swing point, as I developed it (my last name), and the fact that I begin using this entry tool when definite Seasonal dates approach a market that I am 'stalking' according to my bias, or edge filters.

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Note: The above statements should not be construed as an investment or trading recommendation. Airelon's Investing and Trading Journal is a blog that allows subscribers to look 'over my shoulder' as it were, for my own personal specific trading and investing ideas and thoughts for the next week. But they are only thoughts as of the moment of publication, and are subject to change.. Any trades or investments that I discuss within this blog are simply my own thoughts regarding my own investing and trading outlook. Remember that entering any market is an individual decision. There is no guarantee that I will enter, or have entered any of the trading or investing ideas that I discuss in this blog; as larger accounts may require a different strategy as the ones presented here. This blog simply contains my trading and investing thoughts for the next week. I, the author do not grant this work for wide distribution beyond any single individual subscriber as this publication is protected by U.S. And International Copyright laws. All rights reserved. No license is granted to the user except for the user's personal use. No part of this publication or its contents may be copied, downloaded, stored in a retrieval system, further transmitted or otherwise reproduced, stored, disseminated, transferred, or used, in any form or by any means except as permitted under the original subscription agreement or with prior written permission. I personally only enter any market after watching and reading the tape and I trade using money management principles. The losses in trading can be very real, and depending on the investment vehicle and market, 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. Airelon's Challenge Chronicles are demo accounts,with all of the inherent problems therein, which are used within this blog in an attempt to track the results of my own thought processes., and is run as a model. Traders who should make their own decisions based off their own research, due diligence, and tolerance for risk. Any pictures used within this blog are believed to be public domain. Any charts that are displayed using the ThinkorSwim platform, and other pictures were obtained through Wikipedia's public domain policy. As a reminder, any trades discussed for "Airelon's Challenge Chronicles" would only be 'day trades' according to the parameters discussed for Airelon's Challenge Chronicles, at this stage of the game in order to escape the risk of over-leveraged gap opens in the commodity futures markets. As a 'trading sister' would have grown to the $30,000 level, I would have graduated the account into 'swing trading'. In addition, it is understood that readers have read my YouTube methodology series. It is also understood that the writer of this blog has repeatedly warned against the dangers of shadowing any other traders thoughts. 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.

Airelon's Challenge Chronicles 3.5: Metrics, Psychology and Trading Honesty (PODCAST)

So what is "Airelon's Challenge Chronicles"? You can find a description by clicking here.

This will be a mid-week recap ...

(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.

By the way ... there is the congestion for General Mills (GIS) that I discussed earlier in the week. A break and close above $35.50 is good, a break above $35.87 is a trend reveral in my humble opinion, and a break below the support zone of $34.80 to $35.00 nullifies the congestion.

I also want to include the money management numbers, at least as they exist for the very small sample set as it stands at the current time ...



* * *

Note: The above statements should not be construed as an investment or trading recommendation. Airelon's Investing and Trading Journal is a blog that allows subscribers to look 'over my shoulder' as it were, for my own personal specific trading and investing ideas and thoughts for the next week. But they are only thoughts as of the moment of publication, and are subject to change.. Any trades or investments that I discuss within this blog are simply my own thoughts regarding my own investing and trading outlook. Remember that entering any market is an individual decision. There is no guarantee that I will enter, or have entered any of the trading or investing ideas that I discuss in this blog; as larger accounts may require a different strategy as the ones presented here. This blog simply contains my trading and investing thoughts for the next week. I, the author do not grant this work for wide distribution beyond any single individual subscriber as this publication is protected by U.S. And International Copyright laws. All rights reserved. No license is granted to the user except for the user's personal use. No part of this publication or its contents may be copied, downloaded, stored in a retrieval system, further transmitted or otherwise reproduced, stored, disseminated, transferred, or used, in any form or by any means except as permitted under the original subscription agreement or with prior written permission. I personally only enter any market after watching and reading the tape and I trade using money management principles. The losses in trading can be very real, and depending on the investment vehicle and market, 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. Airelon's Challenge Chronicles are demo accounts,with all of the inherent problems therein, which are used within this blog in an attempt to track the results of my own thought processes., and is run as a model. Traders who should make their own decisions based off their own research, due diligence, and tolerance for risk. Any pictures used within this blog are believed to be public domain. Any charts that are displayed using the ThinkorSwim platform, and other pictures were obtained through Wikipedia's public domain policy. As a reminder, any trades discussed for "Airelon's Challenge Chronicles" would only be 'day trades' according to the parameters discussed for Airelon's Challenge Chronicles, at this stage of the game in order to escape the risk of over-leveraged gap opens in the commodity futures markets. As a 'trading sister' would have grown to the $30,000 level, I would have graduated the account into 'swing trading'. In addition, it is understood that readers have read my YouTube methodology series. It is also understood that the writer of this blog has repeatedly warned against the dangers of shadowing any other traders thoughts. 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.

Airelon's Challenge Chronicles 3.1: Trade Idea ...

(Please note there are a few entries today)

Things were pretty slow around here today. That O.J. trade got scratched right out of the gate this morning.

So I've just been perusing through some charts, when I stumbled across U.S. Dollar Index Futures ... March contract. Implied probability is pointing me to short it. I'll have to wait for it to open back up, and the normal rules apply ... namely ... the spread would have to be tight, high enough volume to get in. But I like the resistance 'area' on the daily chart, and I like the fundamentals behind shorting what was a rally in a down-trend; along with my economic thesis ...

I have an alert set for at or below 79.965. Of course, if it broke above 80.50, well ... I hate to use the term ... "scratch" the trade, but I'd probably wait for another pattern to develop before looking at the chart again.

Edit: 6:43 pm est - Things I'll be watching near the open of active trading in a bit. Tighter spread. Volume around 100 for 10 minutes would be nice. No gaps. Then the 'regular reading of the tape' that I've so often discussed.

Edit: 9:34 pm est - Took it for a short out of the open, talked about the trade in the twitter stream as it happened (couldn't get to the screen capture). The market held to the parameters, and I took $46.00 out of that move before commissions. Completely out of the trade. Second profit for A.C.C.

* * *

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 $500 Challenge Project Summary: December 6th, 2010 - Watchlist and More Portfolio Management Comments

(Please note there are a few entries today)

Previous $500 Challenge Project Balances:

"The Three Sisters":

Investing "Sister" Balance: $981.66
Trading "Sister" Balance: $2,194.36
Side-pocket Savings "Sister" Balance: $575.30
Total Challenge Project Funds: $3,751.32

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 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. As I mentioned on August 10th, I have liquidated all of the other personal accounts that I've discussed on this blog for the last 4 years, and to emphasize the strength of these principles? I will demonstrating my success, again, this time it will be live, with the 'Challenge Project', full time.

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

Sorry, no video today. I just don't feel like the fuss of compiling and uploading a video.

So, as already stated, rule no. two is being applied to the dividend investing 'sister' account. As you can note in the summary below, I've also started to include the percentile representation of the cash within the dividend investing 'sister' account. Perhaps this will help illustrate more clearly why the dividend investing 'sister' account needs more maintenance.

It wouldn't take long to adjust those percentages. Just four applications of rule no. two, and we would greatly affect the percentile cash reserved for 'maneuvering capital'. That 'maneuvering capital' is the 'position' or share of cash that I am primarily concerned with increasing in the future.

Oh, and you'll note that I also revised my 'active' trading goals.

In 'other events', watching David Einhorn co-host this morning on CNBC (I never watch CNBC, but wanted to catch David's comments) was interesting. I commented on it earlier in the twitter stream, so I'll spare you my comments in this entry. But with Pfizer's (PFE) change in CEO, and great stock discussion that David usually brings to the table, I thought it opportune time to discuss the companies whose stocks that I usually keep within my 'watchlist'. Stocks that I keep an eye on, at least out of the corner of my eye. Yes, Pfizer (PFE) is one of them. No, not because of David's comments. If you look at the old Superior Investor (SI) forums, or the Profound Investor (PI) forums, or heck, I think there may even be a blog entry here about it from a couple of years back, I've always had my 'eye' on Pfizer (PFE).

Here are some others that I keep in a watchlist: Abbott (ABT), Shipping Finance Ltd. (SFL), Automatic Data Processing (ADP), Procter & Gamble (PG), General Mills (GIS), Pepsi Cola (PEP), Deago (ADR) (DEO), AT&T (T), Frontline Ltd. (FRO), DTE Energy (DTE) andNYSE Euronext (NYX).

These are not stocks I actively follow as I mentioned earlier. But I keep them on a list, and check in from time to time.

Oh, and in case you missed the Facebook update on my A.C.C. thoughts? Obviously, with the spike higher in Orange Juice, I've scratched that trade, at least for now. I continue to keep my eye out for any other trades.




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

Challenge Project Balances After Rule No. 2 Deposit:

Goals for Each Account By the Time I Trade Challenge Project Full Time

• Investing Account: More cash, will evaluate
• Trading Account: $2,500.00
• Savings Side-Pocket Account: $900.30

Investing Account Balance: $1,010.45
(YTD the account is +26.44% YTD Return is about +11.15% Continuing Yield is approximately +6.96% in cash dividends and additional shares of stock)

• 6.2685 shares of KO (DRIP is on for 4.2685 shares)
• 5.158 shares of JNJ (DRIP is on for 3.158 shares)
• Cash: $283.45
  

-$26.45 of this cash I reserve for 'maneuvering' capital (2.618%)
-$13.00 of this cash I reserve to D.C.A. KO (1.287%)
-$24.00 of this cash I reserve to D.C.A. JNJ (2.375%)
-This leaves $220.00 cash available for a new purchase (21.77%)

• Additional $143.00 available from slush fund, up to $1,153.45 (14.15%)
  

Investing Account Balance Year to Date
(Can be Enlarged):

Stock / Futures Trading Balance: $2,194.36

( YTD cash contributions, equity and return up about 37.49 % )

• 2% risk tolerance gives us $43.89 'at risk' levels
• 3% risk tolerance gives us $65.83 'at risk' levels
• Additional $143.00 available from draw-down / slush fund, to $2,337.63
  

Trading Account Balance Year to Date:
(Can Be Enlarged)

Savings Side-Pocket Balance: $575.30

(YTD cash equity up about 187.2 % Return on Capital is 0 %)

• $143.00 for a Slush fund / Draw-down Kill Switch fund
• $289.30 for a Base Savings
• $143.00 for Emergency Savings

Savings Side-Pocket Account Balance Year to Date:
(Can Be Enlarged)

Total $500 Challenge Project Balance: $3,780.11

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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.

Airelon's Challenge Chronicles No. 3: Evolution of A.C.C. and Market Thoughts (PODCAST)

(Please note there are a few entries today)

So what is "Airelon's Challenge Chronicles"? You can find a description by clicking here.

I discuss trend exploitation, my methodology as it relates to 'dabbling in a trend' to see if it takes off or not, dividend investing thoughts, trading thoughts ... as well as thoughts as to the 'evolution' of A.C.C. ...

(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.

Then, as the markets continues to evolve? My thoughts will continue to evolve and I may filter out markets, or focus in on specific markets; as I describe in my "Trading Methodology" series. I'll update as best I can on this blog throughout the week as that 'filtering' process takes place.


As follows is a summary of the "Challenge Chronicle" 'three sister' accounts as of this evening ...

Investing "Sister" Account: $1,307.85
(YTD the account is +0.09107% Continuing Yield is approximately +10.11% in cash dividends and additional shares of stock)

• 6.2685 shares of KO (DRIP is on for 4.2685 shares)
• 5.158 shares of JNJ (DRIP is on for 3.158 shares)
• 10 shares of GIS (DRIP is on for 10 shares)
  
• Cash: $224.75
  

-$100.00 of this cash I reserve for 'maneuvering' capital
-$ 62.00 of this cash I reserve to D.C.A. KO
-$ 71.45 of this cash I reserve to D.C.A. JNJ
-$ 0.00 of this cash I reserve to D.C.A. GIS
-This leaves -$8.70 cash available for a new purchase

• Additional $225.00 available from slush fund, up to $1,531.66
  

Trading "Sister" Account: $2,571.82

( YTD cash contributions, equity and return up about 2.856 % )

(Short 2 YGG1 from 1362.80 and 1362.50, Covered at 13.0.80 and 1360.30. Eliminated one contract profit as mentioned in podcast)

• 2% risk tolerance gives us $51.42 'at risk' levels
• 3% risk tolerance gives us $77.14 'at risk' levels
• Additional $225.00 available from draw-down / slush fund, to $2,796.41
  

Savings Side-Pocket Balance: $900.00

(YTD cash equity up about 0.00 % Return on Capital is 0.00 %)

• $225.00 for a Slush fund / Draw-down Kill Switch fund
• $289.30 for a Base Savings
• $225.00 for Emergency Savings

Total Airelon's Challenge Chronicles Balance: $4,779.26

* * *

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.