Joined Dec 4, 2012
319 Blog Posts

Mail Call For The Week Ended

Each weekend going forward, I will weigh in on emails that have been sent to me with comments from articles written in the past week.  Instead of answers to you individually, I would rather reply to all readers and shares my comments with the readership.

Keep the comments coming because the questions help me convey to you ideas that may need further clarification.

I got a couple comments on my Bank of America $BAC where I bought the stock and puts to protect on the downside. When I make a recommendation, it is all or none. If you decide to put the trade on a ¼  or ½  position, then that is your decision. I am a big time stamp guy and like to show results.

On this trade, I was also asked if buying the put was worth the cost of admission, effectively 9%. My answer is absolutely and I probably will lift the position at some point well before expiration in March. So far this trade has lost $1 as it fell from $13.21 to $12.95. The hedge is doing its job nicely.

Next I was asked on Friday if we are going to get more selling on Monday. Flip a coin right now on that. So far in February we have had three down days, two of which lost more than -1%, and two up days. I do not try to predict day to day moves rather I follow the bouncing ball and look for trend changes. The trend changed on Friday back to negative. Just when you think you should press the shorts they will rip your face off and when you want to go balls to the wall long then sell them down a couple hundred points and send you back to the ark.

The reader thought we could drop another 10 S&P points. I am not in that camp right now. Rather I think we trade around 1875 and chew people up on either side of that number until the Grandmonster speaks on Wednesday and Thursday.

I got some grief about closing out my gains in $ABX. We locked in a gain of $9.87 against a cost of $8.74 for a profit of $1.13 or 12.92%. In this market, that is the type of gain I am looking for until we can establish a bigger trend.  Gold is currently as a point where in the last year it fails, call it fool’s gold. I would like to reenter $ABX or other $GDX or $GDXJ trades after such a drop.

The event’s commentary did not have any analysis to it and a reader pointed that out. This is correct. It simply is attempting to alert you the reader to specific times where there is a risk of a sudden and sharp move.  Flying blind is no fun and that is my only intent when I offer up a look at the week ahead.

I am not much on economic data because quite honestly when the data sucks then you want to be a buyer of stocks and when it is peaking you want to sell. That is it for now.

Time to head out to a dinner with friends and drink a few bottles of some Italians reds,  Barbera or a Super Tuscan preferable.

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