http://chaudhryandcole.com/
Check it out and let me know what you think.
Andy
Sunday, July 06, 2008
Friday, April 04, 2008
Important Update
It's been awhile since my last post, but things have been unbelievably hectic around here as of late. That being said, however, I am in the process of putting up an entirely new website devoted to the analysis of anything and everything related to the markets. Blogger has been excellent for what I have been using it for this past year, but its features are a bit too limited for I want to be doing in the future. Also, I have been in touch with a couple close friends of mine who would also be interested in contributing to the site. I am hoping to get this new website up as quickly as possible so keep checking for updates. I will post the URL to the new site as soon as I get it up and running. Once again, sorry for the lack of updates, but hopefully this new site will allow for for expansion into new frontiers with the intention of better educating individual investors such as yourself.
Andy
Andy
Friday, March 14, 2008
Officially A Seeking Alpha Contributor
http://seekingalpha.com/author/andy-cole
Well what can I say? I guess I am now a regular contributor to the financial website, Seeking Alpha. Check it out the articles if you get a chance and as always, comments, criticisms, and other opinions are welcome.
Well what can I say? I guess I am now a regular contributor to the financial website, Seeking Alpha. Check it out the articles if you get a chance and as always, comments, criticisms, and other opinions are welcome.
Sunday, March 02, 2008
Market Analysis
After two weeks of choppy, low-volume trading, this market looks to have picked its course to the downside. Friday's poor economic data (no growth in consumer spending) lead the market down over 300 points on very strong volume. All of a sudden, we are now beginning to see the reasoning behind the Fed's frantic interest rate cuts. Bernanke & Co. know that this economy is in trouble and I think the markets are slowly starting to accept these facts. From a technical standpoint, the picture is about as clear as clear can be. Let's take a look at the charts:
Three Month DJIA Chart
Two Year DJIA Chart
The DJIA has been trading within the 12750 (resistance as said in previous posts) and 12200 range for the the past few weeks. The volume has always been languishing thus giving us credible evidence to doubt this recent rally from the 11,650 area. However, last Friday, market volume increased around 20% to lead us to our current level at 12,250. Take note of that 50-day moving average (resistance) as well as that short-term double top formation at the 12,750 area. We really needed to break above both of those resistance levels to have any shot of calling a long term bottom. Also of note, the stochastics is showing that the market is overbought. This, coupled with the fact that the MACD and RSI are both rolling over to the downside, only make the picture more bearish. And finally, the 200-day moving average is now firmly in a downtrend, giving the bears a very worthwhile case.
So where do we go from here? Look for the DJIA to retest the lows set in January around the 11,650 area. I wouldn't bet against the other indexes (NASDAQ and S&P500) doing the same. I realize that I am beating a dead horse when I am saying this, but at this point, cash is king. If you are more of a trader and are experienced with getting short stocks, trading puts, etc., then I would say go for it. If you have been reading this blog for the past month and did sell into this short-term rally, I think you've done yourself a great favor because personally, after analyzing the charts/circumstances of past bear markets, I believe these markets will see much more downside throughout the course of the year. Once again, I like the SDS, DOG, QID, and the DXD as ways to get short the indexes. If you do plan on getting long anything right now, look at companies that have not violated their 200 or 50-day moving averages. I'd also look at companies dealing with commodities and precious metals (i.e. FCX, NEM, BHP etc.) The agriculture stocks are also en fuego right now (POT, MOS, MON).
And that does it from here. As a sort of parting piece, I leave you all with a somewhat simple, yet very appropriate Wall Street adage: "The trend is your friend," and in this case, the trend is down. I have a feeling that may be a good thought to keep in mind for these next few months.
Updates to follow soon.
Three Month DJIA Chart
Two Year DJIA Chart
The DJIA has been trading within the 12750 (resistance as said in previous posts) and 12200 range for the the past few weeks. The volume has always been languishing thus giving us credible evidence to doubt this recent rally from the 11,650 area. However, last Friday, market volume increased around 20% to lead us to our current level at 12,250. Take note of that 50-day moving average (resistance) as well as that short-term double top formation at the 12,750 area. We really needed to break above both of those resistance levels to have any shot of calling a long term bottom. Also of note, the stochastics is showing that the market is overbought. This, coupled with the fact that the MACD and RSI are both rolling over to the downside, only make the picture more bearish. And finally, the 200-day moving average is now firmly in a downtrend, giving the bears a very worthwhile case.
So where do we go from here? Look for the DJIA to retest the lows set in January around the 11,650 area. I wouldn't bet against the other indexes (NASDAQ and S&P500) doing the same. I realize that I am beating a dead horse when I am saying this, but at this point, cash is king. If you are more of a trader and are experienced with getting short stocks, trading puts, etc., then I would say go for it. If you have been reading this blog for the past month and did sell into this short-term rally, I think you've done yourself a great favor because personally, after analyzing the charts/circumstances of past bear markets, I believe these markets will see much more downside throughout the course of the year. Once again, I like the SDS, DOG, QID, and the DXD as ways to get short the indexes. If you do plan on getting long anything right now, look at companies that have not violated their 200 or 50-day moving averages. I'd also look at companies dealing with commodities and precious metals (i.e. FCX, NEM, BHP etc.) The agriculture stocks are also en fuego right now (POT, MOS, MON).
And that does it from here. As a sort of parting piece, I leave you all with a somewhat simple, yet very appropriate Wall Street adage: "The trend is your friend," and in this case, the trend is down. I have a feeling that may be a good thought to keep in mind for these next few months.
Updates to follow soon.
Friday, February 08, 2008
Monday, February 04, 2008
Market Analysis
Well after that +1000 point rally bottom to top, I think we may be seeing more long-term downside within the next few weeks. I stated in my last post that resistance on the DJIA would be at around 12790 and we ended up coming closest to that level last Friday at 12760. I hope you all used this rally to close out long positions and cut any losses. Also of note last Friday, we saw intraday double tops form across all three major indexes at the following levels:
DJIA: 12750
NASDAQ: 2400
S&P500: 1394
It looks as though we have hit a short-term top across the board. Look for more immediate downside in the coming weeks. If you are looking to get short any of the indexes, take a look at SDS, DOG, QID, or the DXD. All four are great ways to trade around them. Look again for support on the DJIA again at 11650, on the NASDAQ at 2200, and the S&P500 at 1275 and should those levels fail, watch out below, because any longs will be punished. And I've stated it before and I'll state it again: we are in a recession/period of slower economic growth/slowdown/whatever you want to call it and the market will always tend to reflect that.
Also, I have had many emails asking me why I have not been trading recently. This is due purely to the fact that school has started up again and I have been unbelievably busy as of late. I hope to resume trading sooner rather than later. That being said, however, the market analysis updates will continue to be posted on a regular basis and I hope that will help guide you all through these choppy markets.
Updates to come.
DJIA: 12750
NASDAQ: 2400
S&P500: 1394
It looks as though we have hit a short-term top across the board. Look for more immediate downside in the coming weeks. If you are looking to get short any of the indexes, take a look at SDS, DOG, QID, or the DXD. All four are great ways to trade around them. Look again for support on the DJIA again at 11650, on the NASDAQ at 2200, and the S&P500 at 1275 and should those levels fail, watch out below, because any longs will be punished. And I've stated it before and I'll state it again: we are in a recession/period of slower economic growth/slowdown/whatever you want to call it and the market will always tend to reflect that.
Also, I have had many emails asking me why I have not been trading recently. This is due purely to the fact that school has started up again and I have been unbelievably busy as of late. I hope to resume trading sooner rather than later. That being said, however, the market analysis updates will continue to be posted on a regular basis and I hope that will help guide you all through these choppy markets.
Updates to come.
Wednesday, January 23, 2008
The Short Term Bottom Is In
Well, the short-term bottom is in, thanks to a panic 75 point basis cut by the Fed. We saw an double bottom form at 11650 level during the past two days of trading and continued to move 600 points higher from there. The long term trend, however, is still down and this economy is still headed towards a recession. Use this rally to close any current long positions and cut any serious losses. For all you traders out there, look for resistance at the following levels:
DJIA: 12790
Nasdaq: 2460
S&P500: 1410
This is that dead cat bounce I talked about in my previous post. What we saw today was a combination of short-covering and some buying of financials and retailers. I wouldn't be surprised to see continued strength in the market to close out the week because this market is extremely oversold. Once we hit those index resistance levels, though, be prepared to take your short positions for the ride down.
Updates to come.
DJIA: 12790
Nasdaq: 2460
S&P500: 1410
This is that dead cat bounce I talked about in my previous post. What we saw today was a combination of short-covering and some buying of financials and retailers. I wouldn't be surprised to see continued strength in the market to close out the week because this market is extremely oversold. Once we hit those index resistance levels, though, be prepared to take your short positions for the ride down.
Updates to come.
Monday, January 21, 2008
(Bear) Market Analysis
It's official: we are now in a bear market after last weeks poor performance and with the way things are going currently, I think we all need to get used to it. So let's take a look at the charts. In order to get a better sense of the big picture here, we will be using three year timeframes.
The DJIA has managed to hold onto the lows set in March of 2007. However, there has been absolutely NO evidence nor ANY positive economic news to suggest that the selling will stop anytime soon. Look for short-term support at 11650, the highs set in May of 2006. Should that support level fail, look for longer-term support around the 10650 area.
The Nasdaq had an unbelievably woeful session last week and is currently sitting at a short-term support level of 2350. Without any immediate upside, however, we are headed towards the 2020 area. Keep in mind that there are some big name tech companies reporting this week, including Apple and Microsoft, and I think both of them will report decent numbers.
The S&P 500 is in no better shape than the rest and looks to be headed towards the 1220 area.
Simply put, there is no easier way to say it: we are in a bear market. And as I previously said last week, there is NO bottom in place and trying to catch that falling knife will only end in tears. Don't be fooled by any +200 or +300 point up days as they will be purely a result of short covering and dumb money buying. Be patient! We already saw what the market thought of President Bush's so-called "instant relief" plan and it was plainly a case of too little, too late. The Federal Reserve, however, is set to meet later this month where they will determine how much they will cut interest rates by. To be honest, we really need to see a 75 basis-point cut to see any short-term relief. I think anything less will generate a market sell-off. And that's about it from here. I'll leave you all with what I think is a very appropriate quote for the times:
"They say there are two sides to everything. But there is only one side to the stock market; and it is not the bull side or the bear side, but the right side" (Reminiscences of a Stock Operator).
The DJIA has managed to hold onto the lows set in March of 2007. However, there has been absolutely NO evidence nor ANY positive economic news to suggest that the selling will stop anytime soon. Look for short-term support at 11650, the highs set in May of 2006. Should that support level fail, look for longer-term support around the 10650 area.
The Nasdaq had an unbelievably woeful session last week and is currently sitting at a short-term support level of 2350. Without any immediate upside, however, we are headed towards the 2020 area. Keep in mind that there are some big name tech companies reporting this week, including Apple and Microsoft, and I think both of them will report decent numbers.
The S&P 500 is in no better shape than the rest and looks to be headed towards the 1220 area.
Simply put, there is no easier way to say it: we are in a bear market. And as I previously said last week, there is NO bottom in place and trying to catch that falling knife will only end in tears. Don't be fooled by any +200 or +300 point up days as they will be purely a result of short covering and dumb money buying. Be patient! We already saw what the market thought of President Bush's so-called "instant relief" plan and it was plainly a case of too little, too late. The Federal Reserve, however, is set to meet later this month where they will determine how much they will cut interest rates by. To be honest, we really need to see a 75 basis-point cut to see any short-term relief. I think anything less will generate a market sell-off. And that's about it from here. I'll leave you all with what I think is a very appropriate quote for the times:
"They say there are two sides to everything. But there is only one side to the stock market; and it is not the bull side or the bear side, but the right side" (Reminiscences of a Stock Operator).
Wednesday, January 09, 2008
Market Analysis / Position Closed in GRMN
Well, after yesterdays late selloff, this market may have finally reached the tipping point. Lots of crucial support areas were broken yesterday, so let's take a look at where we stand:
The DJIA managed to take out the lows of November and closed around the intraday lows set in August. The 50 and 100 day moving averages are beginning to roll over and all the other indicators are pointing the DJIA into the ground. Unless we see some immediate upside, look for the DJIA to continue trending downwards towards the 12,100 area.
The Nasdaq once again is the best looking chart of the three as it has held onto the lows set in August. Given the recent awful performance of the Nasdaq, this is a bit surprising to say the least. However, without any immediate upside, the Nasdaq is heading towards the 2350 area.
The S&P 500 is in a slightly similar situation as the Nasdaq as it has held onto the intraday low trading levels set in August. Again, though, all the indicators are pointing due South and without any big money buying, look for the S&P to hit the 1370 area.
Simply put, for all you retail investors/traders out there, it may be best to sit on the sidelines for the next week or so until the big money decides whether or not this market still has upside potential. The bottom is not in place at the moment and should the floodgates actually be opened, I would hate to see anyone be caught in a wave of big money selling.
Sold 7 April $100 call options at $330/contract. This represents a 52% loss.
Updates to come.
The DJIA managed to take out the lows of November and closed around the intraday lows set in August. The 50 and 100 day moving averages are beginning to roll over and all the other indicators are pointing the DJIA into the ground. Unless we see some immediate upside, look for the DJIA to continue trending downwards towards the 12,100 area.
The Nasdaq once again is the best looking chart of the three as it has held onto the lows set in August. Given the recent awful performance of the Nasdaq, this is a bit surprising to say the least. However, without any immediate upside, the Nasdaq is heading towards the 2350 area.
The S&P 500 is in a slightly similar situation as the Nasdaq as it has held onto the intraday low trading levels set in August. Again, though, all the indicators are pointing due South and without any big money buying, look for the S&P to hit the 1370 area.
Simply put, for all you retail investors/traders out there, it may be best to sit on the sidelines for the next week or so until the big money decides whether or not this market still has upside potential. The bottom is not in place at the moment and should the floodgates actually be opened, I would hate to see anyone be caught in a wave of big money selling.
Sold 7 April $100 call options at $330/contract. This represents a 52% loss.
Updates to come.
Tuesday, January 08, 2008
Friday, January 04, 2008
Position Built In GRMN
Take a look at GRMN. This stock is off almost 30% from its highs set a few months ago. With a P/E of 25, I think this high growth stock has some serious room to move, especially with the Consumer Electronic Show just around the corner. Also, last week the stock managed to hold onto support at its 200-day moving average and put in what I believe is a short term bottom.
Bought 7 April $100 call options at $700/contract.
Friday, December 28, 2007
Position Closed In DRYS
Sold 5 March $100 call options at $650/contract. This represents a 38% profit.
Monday, December 24, 2007
Position Built In DRYS
Take a look at DryShips. This stock is down over 45% from its highs set about a few months ago. With a P/E of only 8 (yes 8), this thing has room to move in a hurry. From a technical standpoint, this stock looks to have set a triple bottom with the lows of September and November. The continued strength in dry bulk shipping industry leads me to believe that this stock is heavily oversold and should reverse sometime soon.
Bought 5 March $100 call options at $470/contract.
Friday, December 21, 2007
Position Closed In RIMM
Sold 3 March $115 call options at $1650/contract. This represents a 72% profit.
Wednesday, December 12, 2007
Position Built In RIMM
Dips in companies such as RIMM don't happen too often, so it's good to take advantage of them while you can. This recent sell-off can be attributed to a downgrade that occurred a few weeks ago. With seven days to go until earnings, I think we may see a run here.
Bought 3 March $115 call options at $960/contract.
Tuesday, December 11, 2007
Position Closed In CSCO
Sold 16 April $30 call options at $183/contract. This represents a 27% profit.
Friday, December 07, 2007
Position Built In CSCO
Take a look at CSCO. Fundamentally, a great company: 15-16% growth, 20% average profit margins, and the networking backbone of the United States. Recently the stock has sold off almost 15% due to a solid quarter "not up to analyst expectations." I think this one's headed higher.
Bought 16 April $30 call options at $143/contract.
Position Closed In T
Sold 22 April $42.5 call options at $128/contract. This represents a 12% profit.
Thursday, November 29, 2007
Is The Bottom In? Position Built In T
Yes. For the short-term anyways. Take a look at the DJIA chart:
More specifically, the MACD has made that crossover to the upside as a result of those back to back 200+ and 300+ days. I mentioned last Sunday that we needed to hold those important price ranges in order to see any upside for the coming months. Well, we've done that and then some. The NASDAQ and S&P 500 look good as well. Myself? I'm a buyer. Take a look at T.
Huge cash flows being generated out of this company. Profit up 41% last quarter. Also a great value play. U-Verse will be an outstanding product, but one more for long term growth. And can you say iPhone?
Bought 22 April $42.5 call options at $114/contract.
More specifically, the MACD has made that crossover to the upside as a result of those back to back 200+ and 300+ days. I mentioned last Sunday that we needed to hold those important price ranges in order to see any upside for the coming months. Well, we've done that and then some. The NASDAQ and S&P 500 look good as well. Myself? I'm a buyer. Take a look at T.
Huge cash flows being generated out of this company. Profit up 41% last quarter. Also a great value play. U-Verse will be an outstanding product, but one more for long term growth. And can you say iPhone?
Bought 22 April $42.5 call options at $114/contract.
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