June was a decent month for me. I gained $1,178.78 not counting the deposit I made. That’s an approximate gain of 1.5% since the end of May. I didn’t hit my goal, but did end with a higher balance than I started with and that’s very important, especially since June 2008 was a down month for me. Looking at my 12 month return, I replaced a losing month with a winning month. I ended June with an account balance of $78,417.54 according to TD Ameritrade and $78,617.34 according to Quicken.
My July goal is to increase my account value by $1,960.44 to $80,377.98. I come to that number by taking 30% of my balance at June’s closing and dividing it by 12 months and adding it back to my June closing balance. Nothing high tech here. As always I’m aiming for a 30% annualized return, but if I can stay ahead of the major indices for the year I’ll be happy. I won’t be making a deposit to this account in July due to some other expenses our household is taking for the month and an increasing fear of layoffs coming before the end of the summer to my …
We’re half way through our small group of bloggers’ contest for the four best stock picks of 2009. I’m still pulling in a solid last place, but have begun my comeback from a distant last at the end of Q1.
This is how my picks faired over the two quarters:
DRYS - Closed 12/31/08 at 10.66. Closed 3/31/09 at $5.09. Closed 6/30/09 at $5.78.
NDAQ - Closed 12/31/08 at 24.71. Closed 3/31/09 at $19.58. Closed 6/30/09 at $21.31.
USO - Closed 12/31/08 at 33.10. Closed 3/31/09 at $29.05. Closed 6/30/09 at 37.93
SSO - Closed 12/31/08 at 26.27. Closed 3/31/09 at $19.73. Closed 6/30/09 at $26.14.
Here are the current standings and our year to date returns:
I charted the NASDAQ 100 Index ($NDX.X) on Friday, June 26, 2009 when it closed at $1,480.20 for the week. While I’m still not able to get on the bull band wagon for most of the indices, the NASDAQ 100 has more appeal still. NDX pulled back almost 6.5% intraday after hitting a recent high a few weeks ago and has rallied from that level. A nice round 10% correction would’ve made the story better, but the 6.5% did take some risk off the table nonetheless. I didn’t bother to draw some of the old trend lines for NDX that have broken support. Maybe I should have because I think it’s almost a positive to see that it has slowed down its trajectory. That might mean its rally has legs still since it’s following a less steep slope now.
It found support at the horizontal line I drew. That line didn’t have a real clear cut history of being a significant level of support, but I wanted to highlight it because it could act as support on the next little pull back for NDX. The upper trend line of higher highs is far enough away that I think NDX has decent upside potential. The trend …
After making only one option trade to start the week off I finally got around to some account house cleaning this week which was overdue. I’ve been sitting on a large portion of my account in cash recently due to most my naked puts expiring out of the money and my covered calls expiring in the money. In an off-line conversation with a MTJ reader who’s in the same situation we discussed where we should park our cash while we don’t have it in use. He suggested PowerShares VRDO Tax-Free Weekly Portfolio (NYSE Arca: PVI).
PVI attempts to track the price and yield of an index called the Thomson Municipal Market Data VRDO index. While not guaranteed, it tends to trade within a few cents of $25.00 and pays a monthly dividend. PVI’s current yield is 2.73%. I put a limit order in and bought 2000 shares at $25.00 for a total cost of $50,009.99. This left me with $11,145.54 in cash. I won’t be posting all of my moves in and out of PVI, but thought is was worth mentioning where I’m saving the bulk of my cash these days. Last year I used one of the TD Ameritrade’s …
I’ve been coming back to the NDAQ well for more profits ever since I picked them as one of my 2009 stock picks at the beginning of the year. They are actually down from when I picked them, but that’s why I’m not a buy and hold type investor, but an option seller. I’ve done well with NDAQ so far this year and after my June options expired out of the money last week I came back for another run with them this afternoon.
While NDAQ was trading at $20.17 I sold three NDAQ July 20 naked puts (NQDSD) at 0.95 and received $272.74 after commission. With my cautious mindset I could’ve hedged with a lower strike, but I don’t think NDAQ is heading as far south as $17.50. So instead of hedging, I didn’t sell as many put contracts as I have in the past. If assigned, I’m only in for $6,000 worth which would be a cost of around $19.15 after the commission from option assignment. From there I’ll expect NDAQ to rally above $20 again or I’ll just sell covered calls at the $20 strike to work the position back to a profit.
I think the longer term profit outlook will keep it …
Here’s a four minute video from my mortgage broker Greg Spencer from SCMG on Friday June 19, 2009. It’s worth watching to hear his opinion of what’s moving rates right now. I’ve used Greg three times with our mortgages - a refinance on our old house, our original loan on our current house and then a refinance on that loan. I’ve referred 8-9 people to him and he’s done a good job beating the competitions’ rates almost every time. I think he has a good handle on what’s going on now.
As I’ve been witness to with his work on the loan for my sister-in-law, the mortgage lending business is quite different than it used to be and banks are moving at a much slower pace approving loans. Be careful about waiting too long to lock in your mortgage if you think rates are going up, but if you think Greg’s right and rates are coming down again, you can take the risk …
I drew this year to date (YTD) of the S&P 500 (SPX.X) chart after Friday’s close when it was finished the week at $921.23. I might have gotten a little line crazy on it and hope you can still see where I’m going with my following points. I drew two trend lines of higher lows that started in February and March. The shorter one broke support this week, but the longer one offered a new spot of support. The upper trend line of higher highs seems a long way away right now, but was worth drawing for perspective.
I think the most interesting line is the horizontal line that starts with the 2008 closing price of 903.25. It’s interesting because we saw support come from that line when the SPX saw an intraday low of 903.78 this week. That was just a hair above the 50 day moving average to make the bounce all that more believable that it could hold for longer. The horizontal line below that is the next point of potential support if this first one breaks. It’s sitting around 877/878 and marks previous support and resistance points over the past six months.
I circled a few sections in my coloring party. The …
I only had three options finish in the money today (one on MON and two on SLB) and made changes to both positions to give me more downside cushion and increase my chances for a bigger profit by the end of the series of trades. I could’ve exited both positions with a little profit today, but decided to add a new leg for July expiration for each since the premiums are pretty good and I think the downside is fairly limited.
On Monday I’ll be buying 100 shares of Monsanto (MON) from my June 85 naked puts that’ll be assigned officially this weekend. While MON was trading at $80.17 I sold one MON July 80 covered call (MONGP) for $4.00 and received $389.24 after commission. My average cost is going to be just above $75.00 per share after I subtract all of the premiums from my actual purchase price. I could’ve done a little better on my new MON call, but am glad I have the new option in place before the weekend, just in case the price continues to fall. I think MON will rise from here, but I’m not in this for guessing. I like to have part of my profit (the premium) locked away. …
As I’ve sat on the sidelines with most of my cash idle for the past few months I’ve missed out on a lot of the rally. I decided I should make an attempt at putting a little more money at risk. I’ve made a few individual stock trades, but wanted more exposure still. Since I base my success partly on beating the major indices I started eyeing the iShares Trust Russell 2000 Index Fund (NYSE Arca: IWM).
During a rushed lunch today, as the markets were coming off their lows, I charted IWM and saw it was finding support on its trend line of higher lows that started a few months ago. This is also just a couple of point above IWM’s 50 day moving average. Not being a full bull minded investor still, I thought I could ease in with one contract, not hedged. While IWM was trading at $50.96 my limit order hit and I sold one IWM July 52 naked put (IWMSZ) at $2.60 and received $249.25 after commission.
Yes, that was an in-the-money option sale. No, that was not my intention. As I mentioned in the previous paragraph, I was rushed and that caused me to make the careless mistake. I didn’t try to back …
