February 22, 2008
Five Trading Ideas for Friday, February 22
The Box came up with five trading ideas — four shorts, one long — for Friday. They’re free for the next week (just email me to join the list), but the boom will be lowered starting March 1.
While I was away, the Box suggested getting long the Japanese Yen. This is easy to do with the new currency ETF, the FXY. So far so good for this idea — if it reaches 93.32 then the initial protective stop would be moved to breakeven. If I were a deep thinker, I’d wonder about how the Yen relates to the US Long Bond long and the various shorts in the Energy sector that the Box has suggested, but thankfully I’m just a simple country boy with an unclutterable mind. I was just thinking about what I care passionately for and could only come up with pretty girls and barbecued chicken, then I got stumped. :)
February 22nd, 2008 at 9:07 am
Pretty girls and bbq chicken… you must be a mind reader :)
I’m still hoping your service will extend to Aussie stocks but seeing as you’re predicting a very low up-take I won’t hold my breath. Don’t know how many Aussie readers you have but I’m guessing it won’t be worth your while.
February 22nd, 2008 at 9:50 am
Cedric: I believe you are my only reader from Australia, and I do have the idea of extending the service to different markets (China obviously), but I find that even following the ideas for one market is a lot of work… we’ll see, if I get 500 subscribers (ha, ha!) then everything changes.
February 22nd, 2008 at 12:00 pm
Cedric: Check out sites like adr.com and adrbny.com for Aussie companies with American ADRs. Aussie stocks trading on the NYSE should be no problem, and maybe the Chairman’s Black Box also includes OTC ADRs?
Just a thought, guys.
February 22nd, 2008 at 12:04 pm
John: The universe scanned includes the OEX, NDX, the 100 largest Small-cap and Mid-cap companies, as well as the most liquid ETFs. If I tracked the Aussie market I’d probably look at the component stocks that make up the S&P/ASX 200? which I think is the leading index down under.
February 22nd, 2008 at 12:16 pm
John: Thanks for the pointer but the problem is not so much trading US stocks as it is the cost involved. Most brokers take a cut when you convert AUD to USD and then again when you convert back and that’s on top of what can sometimes be $AUD100 brokerage fee. Wouldn’t be so bad if I had a big capital base but for me it’s the difference between getting rich slow and going broke fast. And then if that’s not enough, any position that’s held for long enough runs the risk of being eroded away by a falling USD. In the end it’s all too much to think about. Like the Chairman says, pretty girls and bbq chicken is all I care to put my mind to.
CM: Yes, the ASX200 is the lead index and usually many of the stocks that make it up can be shorted via CFDs.
February 22nd, 2008 at 11:51 pm
Cedric, have you looked at Interactive Brokers? They offer access to many international markets including the US and Australia — and you can maintain multiple currencies in your account indefinitely. Very inexpensive commissions as well.
February 23rd, 2008 at 5:53 am
Do you any any statistics for your trading ideas, e.g. percentage winners versus losers?
February 23rd, 2008 at 5:59 am
igorsway: Thanks for the tip. I’ve had a quick look and it looks promising. Will spend more time checking it out this weekend.
February 23rd, 2008 at 7:55 am
fortune8: I do. I can send you the spreadsheets with the details for all trading ideas from both December and January.
February 23rd, 2008 at 1:30 pm
Cedric: Sounds like igorsway is on to something better than I suggested. But I wasn’t clear. I meant to see if CM’s universe included a decent amount of Aussie stocks (assuming his universe is US-based). If it does, then you could take his black box ideas (if it spews out enough Aussie stocks to make it worthwhile) and then you buy or sell on your local market.
February 23rd, 2008 at 1:57 pm
Maoxian: That would be great. Thanks.
February 23rd, 2008 at 2:57 pm
i guess you have no way to control what the box spits out at any given time but if you could i’d suggest that you vary the offerings. it seems long plays on micro, small, mid-cap stocks are few and far between. i do not like shorts and do not have a ton of dough to even test try most of the box’s offerings. @ $19.95USD I guess the box likes the fat cats anywho. best of luck and thanks for the sponge-time.
February 23rd, 2008 at 3:39 pm
doug: I only track very liquid stocks … I think it’s good to learn how to be comfortable both buying and selling short stocks if you want to trade.
February 24th, 2008 at 6:54 pm
Interesting to note that while your screen says to short ATW, my free trial of “Gorilla Trades” (the heavily advertised Investor’s Business Daily service) lists ATW as a “recently confirmed buy” (confirmed on 2/20). I don’t own the stock and haven’t shorted it. That’s how a market is made…people on both sides of the trade. May the best man (or Gorilla!) win. BTW, I can’t say the service has done well over the past 30 days…the “M” in CANSLIM stands for “market” and when the market has difficulty, their screens don’t fare well, apparently.
February 24th, 2008 at 7:08 pm
Bob R: Never heard of the Gorillas but I’m interested in them … Do they provide a stop loss and target levels? How much do they charge a month? The Box had a crummy January and there are so many open position in February it’s impossible to say what results for this month will look like.
February 25th, 2008 at 10:36 am
Gorilla Trades
i see their ads in my IBD but i never checked them out. Implies that they are a trend following system with a longish view point.
Though currently on their website they have AAPL as an example with a stop loss, a trigger, a 1st target and a second target.
Having “easy to reach” targets would negate the point of trend-following, so who knows.
For what ever it is worth, according to the system that i developed using TradeStation, ATW is in a strong uptrend that started exactly a year ago (2/26/2007) and remains intact. There maybe a short-term short opportunity here but the easy money in ATW is on the long side.
February 25th, 2008 at 11:07 am
Born2: Thanks for the link, but it doesn’t say what they charge? Looking at that AAPL example, it doesn’t make sense to me… how can the stop loss be greater than 1x target one? Anyway, looks like a slick outfit, just the opposite of the Chairman’s earwax and string operation here.
February 25th, 2008 at 11:24 am
i do not know how much they charge… never really cared to look it up, for the same reason i didn’t subscribe to your list :) i just like to figure things out on my own.
The stop loss can be greater than the target if the expectancy and the win/loss ratio still provide for a profitable system. I do not know anything about their system so I cannot explain their particular example but if they have positive expectancy and a winning percentage well over 50% they should be able to pull it off.
February 25th, 2008 at 11:44 am
@Born2: It would be great if someone could tell us what the Gorillas charge … the fact that they don’t give a number upfront is unusual, isn’t it?
February 26th, 2008 at 3:46 am
one of them says $600 USD for a years subscription. but this was in an email sent to someone who canceled and they were offering 100 off - $500.
February 26th, 2008 at 7:26 am
Dan: So $40 - $50 a month and they provide no detailed track record; glad to know my totally transparent service is so competitively priced :) Thanks for digging that up.