Stock Market Day-Trading Discussion Thread

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[quote author="usctrojanman29" date=1231058728]If you guys want to pick up some almost guaranteed pocket change then sell some March $2.50 FNM uncovered calls @ $.05 and sell some April $3 FRE uncovered calls @ $.05. Both of these dogs are trading at around $.70 and have almost no hope of getting into the $2 range, but for the small chance that they do (kinda like the chance of getting struck by lightening, you can easily pick enough shares up for the calls to become covered). I sold 100 calls of each and looking to profit about $1,000 less transaction costs.</blockquote>


Here are some plays I'm considering, mostly betting on a CRE and retail crash in the next 4 months:



PUT purchases-



SHLD: March 25

IYR: March 25

SPG: April 35

STI: April 22.5 (or July 20)

TLT: Jan (2010) 80
 
[quote author="WINEX" date=1231056420][quote author="PANDA" date=1231047588][quote author="WINEX" date=1230969569][quote author="PANDA" date=1230959305][quote author="graphrix" date=1230953456][quote author="PANDA" date=1230943052]OMG!!! DXO is up 36.68% today. Upperlowerclass, What can Panda do to thank you? I am keeping this one for a long time baby....</blockquote>


What have we told you about double 2X ETFs? You don't hold them, you trade them, because if the underlying security/commodity/index sta ys flat then time decay will make the ETF go down in value. You buy and sell the 2X ETFs on the spikes up or down. You can hold it, hope the trend continues, and hopefully make more money, but you will make more money trading the spikes. Keep in mind the real traders are chillin in Jamaica with you right now, and come Monday things could change really quickly. I know you don't like to "day trade", but the 2X ETFs are designed to be traded and you should get out when you hit a certain profit target.</blockquote>


Ya mon! Oil going to $200 mon! No Problem mon.</blockquote>


Buy now or be priced out forever!</blockquote>


Winex, Are you implying there is a bubble in OIL prices at $45?</blockquote>


No, I'm implying that your analysis isn't very well formulated.</blockquote>


Winex... I can tell you are a very sophisticated, sharp, analytical investor. I am an emotional investor and don't like numbers very much. I don't have any hard data and numbers to show you why oil is a good investment. My feelings tell me that crude oil is really cheap right now, so that's why i have been buying. :)



What's your opinion on going double long on silver ticker symbol:AGQ? Now, Silver seems to be more undervalued than Oil right now. I like Silver and Oil in 2009.
 
[quote author="graphrix" date=1230953456][quote author="PANDA" date=1230943052]OMG!!! DXO is up 36.68% today. Upperlowerclass, What can Panda do to thank you? I am keeping this one for a long time baby....</blockquote>


What have we told you about double 2X ETFs? You don't hold them, you trade them, because if the underlying security/commodity/index stays flat then time decay will make the ETF go down in value. You buy and sell the 2X ETFs on the spikes up or down. You can hold it, hope the trend continues, and hopefully make more money, but you will make more money trading the spikes. Keep in mind the real traders are chillin in Jamaica with you right now, and come Monday things could change really quickly. I know you don't like to "day trade", but the 2X ETFs are designed to be traded and you should get out when you hit a certain profit target.</blockquote>


Panda - I have to agree with the G on this one. ETFs, especially 2X ETFs are for trading price fluctuations, not for holding. Even if you are right, chances are too good you will still lose.
 
[quote author="PANDA" date=1231061601][quote author="WINEX" date=1231056420][quote author="PANDA" date=1231047588][quote author="WINEX" date=1230969569][quote author="PANDA" date=1230959305][quote author="graphrix" date=1230953456][quote author="PANDA" date=1230943052]OMG!!! DXO is up 36.68% today. Upperlowerclass, What can Panda do to thank you? I am keeping this one for a long time baby....</blockquote>


What have we told you about double 2X ETFs? You don't hold them, you trade them, because if the underlying security/commodity/index sta ys flat then time decay will make the ETF go down in value. You buy and sell the 2X ETFs on the spikes up or down. You can hold it, hope the trend continues, and hopefully make more money, but you will make more money trading the spikes. Keep in mind the real traders are chillin in Jamaica with you right now, and come Monday things could change really quickly. I know you don't like to "day trade", but the 2X ETFs are designed to be traded and you should get out when you hit a certain profit target.</blockquote>


Ya mon! Oil going to $200 mon! No Problem mon.</blockquote>


Buy now or be priced out forever!</blockquote>


Winex, Are you implying there is a bubble in OIL prices at $45?</blockquote>


No, I'm implying that your analysis isn't very well formulated.</blockquote>


Winex... I can tell you are a very sophisticated, sharp, analytical investor. I am an emotional investor and don't like numbers very much. I don't have any hard data and numbers to show you why oil is a good investment. My feelings tell me that crude oil is really cheap right now, so that's why i have been buying. :)



What's your opinion on going double long on silver ticker symbol:AGQ? Now, Silver seems to be more undervalued than Oil right now. I like Silver and Oil in 2009.</blockquote>


Like Graphrix said earlier (and I have said much earlier), the double ETFs are great trading vehicles (I scalped a little DXO last week myself, but have now closed the position). They aren't to be bought and held.



If you are bullish on the energy sector, there are a ton of bargains out there right now in the drillers and service industries. If you are bullish in silver, then look at the miners.



For short term trades, I look at technicals alone. I then determine my objective for the trade, place the trade, place a stop order in case I am wrong, and exit at a predetermined price. Sometimes if the trade is going in my direction, I will cancel my initial stop order and replace it with a trailing stop order so that I don't turn a winning trade into a loser.



Right now there is a massive battle going on in the economy between inflation and deflation. I believe that the Fed has demonstrated that there is no amount of money that is too great to be printed. But it appears that for the moment the deflationary forces are winning.



For the moment, I believe that the precious metals are caught in a (very tradable) range and that gold and silver are at or near the top of that range. And though the sell off in oil from the July highs until a week ago was historic in the depth and speed, I believe that oil has moved too far too fast in the short term.



If you want to play with leveraged ETFs, learn technical analysis and learn to close a trade that moves against you. They are wonderful vehicles for day traders and swing traders. But don't try to buy and hold them.
 
[quote author="WINEX" date=1231072016][quote author="PANDA" date=1231061601]Winex... I can tell you are a very sophisticated, sharp, analytical investor. I am an <strong>emotional investor</strong> and don't like numbers very much. I don't have any hard data and numbers to show you why oil is a good investment. My <strong>feelings</strong> tell me that crude oil is really cheap right now, so that's why i have been buying. :)



What's your opinion on going double long on silver ticker symbol:AGQ? Now, Silver seems to be more undervalued than Oil right now. I like Silver and Oil in 2009.</blockquote>


Like Graphrix said earlier (and I have said much earlier), the double ETFs are great trading vehicles (I scalped a little DXO last week myself, but have now closed the position). They aren't to be bought and held.



If you are bullish on the energy sector, there are a ton of bargains out there right now in the drillers and service industries. If you are bullish in silver, then look at the miners.



For short term trades, I look at technicals alone. I then determine my objective for the trade, place the trade, place a stop order in case I am wrong, and exit at a predetermined price. Sometimes if the trade is going in my direction, I will cancel my initial stop order and replace it with a trailing stop order so that I don't turn a winning trade into a loser.



Right now there is a massive battle going on in the economy between inflation and deflation. I believe that the Fed has demonstrated that there is no amount of money that is too great to be printed. But it appears that for the moment the deflationary forces are winning.



For the moment, I believe that the precious metals are caught in a (very tradable) range and that gold and silver are at or near the top of that range. And though the sell off in oil from the July highs until a week ago was historic in the depth and speed, I believe that oil has moved too far too fast in the short term.



If you want to play with leveraged ETFs, learn technical analysis and learn to close a trade that moves against you. They are wonderful vehicles for day traders and swing traders. But don't try to buy and hold them.</blockquote>


WINEX said exactly what I was trying to say, but in a much more detailed way. While sometimes gut instinct plays an important role in my trading, emotion should never be what drives my decision for a trade. Emotional trades are when I get burned, and even when the best of traders get burned, see <a href="http://www.reuters.com/article/businessNews/idUSTRE4BU0DL20081231">Bill Miller of Legg Mason</a> as an example of how emotion can get in the way of fundamental and technical analysis.



Leveraged ETFs are designed to make those who understand technical analysis money, and they are designed to make those who trade on emotion lose money. Just because the emotion was right once will only mean a greater loss when the emotion is wrong. Technical analysis will miss emotion, but then again when it sees emotion it sees the opportunity. I already bought and sold DTO at a profit. Could I have made more? Sure! But, I hit my profit target and walked away quite happy. What is a 15% return on a stock that was held for 15 days on an annualized basis?
 
Graph, Awgee, and Winex,



Thanks for your honest feedback on double ETFs. I hope i am not too late to take my profits on DXO on Monday and buy into USO or XLE. I don't know how you guys have the balls to trade this stuff. It is so nerve recking. "Day Trading is definitely not for the Panda."



Awgee, Are you saying that all ETFs are not good for long term hold? I am definitely not a big fan of mutual funds or individual stocks. Perhaps this not my cup of tea.
 
[quote author="PANDA" date=1231103004]Graph, Awgee, and Winex,



Thanks for your honest feedback on double ETFs. I hope i am not too late to take my profits on DXO on Monday and buy into USO or XLE. I don't know how you guys have the balls to trade this stuff. It is so nerve recking. "Day Trading is definitely not for the Panda."



Awgee, Are you saying that all ETFs are not good for long term hold? I am definitely not a big fan of mutual funds or individual stocks. Perhaps this not my cup of tea.</blockquote>


No ETFs aren't bad to hold long term as long as what you are buying is going up more than inflation + fees + your required rate of return. What is really bad to hold is the leveraged ETFs because volatility will kill those as will time. (use the search button I believe acmpe, myself, muzie I believe and awgee already had this whole discussion on ETFs, leveraged ETFs etc.)



Howeer, why even bother with ETFs. If you want to invest in oil...pick your big oil producers, do extensive research on each company and your own gut will tell you who to invest with.

That is what I do. Why pay someone to do what you can do? Look at it this way...



Buying an investment without doing extensive research is like taking a test in college without studying. You might know some things, but you might not feel 100% comfortable. However when you study and know the material...taking the test is easy and comfortable...you will sleep well at night. And in the event that you still don't feel 100% comfortable because the teacher is crazy and doesn't like you as much (in this case the economy) protect yourself against it too by buying long term protective puts or selling covered calls. Eliminate stress and worry from your life...especially with the baby coming soon.



Oh and just a quick FYI. I said many times that 90% of time you yourself is your biggest enemy when trading. If you don't know really well the instrument you are trading, you will be taken by someone who does. This is why I won't trade gold for example. I know plenty on what drives gold prices and what doesn't. Maybe as a very long term investment I'd do it, but no way I'd trade it frequently. I'd be giving my money to awgee. I watched daily movements and studied Alcoa for almost 3 years before I touched it. I've never traded an ETF and don't plan on doing so either...



Anyway, I'm off to the San Diego zoo...one of my fav. places. I love zoo's. Maybe I'll wave at you PANDA, however last time the line was long...you attract quite a crowd.
 
[quote author="PANDA" date=1231103004]Graph, Awgee, and Winex,



Thanks for your honest feedback on double ETFs. I hope i am not too late to take my profits on DXO on Monday and buy into USO or XLE. I don't know how you guys have the balls to trade this stuff. It is so nerve recking. "Day Trading is definitely not for the Panda."



Awgee, Are you saying that all ETFs are not good for long term hold? I am definitely not a big fan of mutual funds or individual stocks. Perhaps this not my cup of tea.</blockquote>


One thing that helps that I haven't mentioned earlier is risk management. Simply put, if your position is large enough that it keeps you up at night, then you have too much riding on the trade. No trade should be more than 5% of your portfolio. Combine small size with the discipline to take a loss when you hit the downside, and you have something manageable.



Another thing that goes very well with the things Blackvault is telling you about research, I'll tell you a few simple metrics that you can look at that will tell you when an investment is as safe as humanly possible. Though what I am about to tell you seems improbable, the recent sell offs have created situations where there are companies that meet these requirements all over the place. Look at the Balance Sheet and Cash Flow statements of companies you are interested in for 3 variables, Cash Flow, Total Cash and Total Debt. If you buy a company that has positive cash flow, no debt, and total cash that EXCEEDS the current market cap, you will most likely be sure of buying a winner. Essentially this is a situation where a money making company is being sold for less than the cash it has in the bank. Or in other words, someone could buy the company and make an instant profit by shutting it down and just keeping the money in the bank. (Before you consider the intellectual property, plant property and equipment, inventory, good will, ...)



It's not my style to tell people about what I am investing in. In fact, as an internal indicator, when I tell someone about a trade or investment I have currently open, I have to sell because it is a sign I use to tell myself that I have made too much money and am getting full of myself. But I will give you an example of a company that meets those requirements that I have NOT invested in. That company is Heelys (HLYS). They make a shoe for kids that has wheels that pop out of the sole. Sort of like instant skates. If you look at the <a href="http://finance.yahoo.com/q/ks?s=hlys">numbers on Yahoo finance,</a> you will find that the current market cap is $64.8 million, they have no debt, they have $93.25 million cash and cash equivalents, and they are cash flow positive. If you had $64.8 million, you could buy them and have a company plus $93.25 million for your money.



But I'm personally not interested in HLYS and would not recommend that anyone buy the stock. Their product is too faddish for my tastes, and they could easily turn to losses in the current economic climate. When that happens, they will eat into that cash pile and remove the only potential reason I see to own the company. There are a lot better investments out there right now.



Also, should you choose to look at fundamentals, I doubt that you will find a miner, or company in oil industry that is selling for less than net cash. (If someone knows of any, PLEASE tell me) But as Blackvault said earlier, do your research and you'll do better than you would by buying USO or GLD or SLV.
 
[quote author="morekaos" date=1230729894]Interested but I am done for the year. Maybe next week when all the adults are back</blockquote>


The weeks ahead will prove the true test, as market pros return from the holidays to digest a barrage of bad economic news, a smattering of corporate profit warnings -- and possibly a new economic stimulus plan.



<a href="http://money.cnn.com/2009/01/03/markets/sunday_weekahead/index.htm?cnn=yes">Adults to come back</a>
 
[quote author="WINEX" date=1231121085][quote author="PANDA" date=1231103004]Graph, Awgee, and Winex,



Thanks for your honest feedback on double ETFs. I hope i am not too late to take my profits on DXO on Monday and buy into USO or XLE. I don't know how you guys have the balls to trade this stuff. It is so nerve recking. "Day Trading is definitely not for the Panda."



Awgee, Are you saying that all ETFs are not good for long term hold? I am definitely not a big fan of mutual funds or individual stocks. Perhaps this not my cup of tea.</blockquote>


One thing that helps that I haven't mentioned earlier is risk management. Simply put, if your position is large enough that it keeps you up at night, then you have too much riding on the trade. No trade should be more than 5% of your portfolio. Combine small size with the discipline to take a loss when you hit the downside, and you have something manageable.



Another thing that goes very well with the things Blackvault is telling you about research, I'll tell you a few simple metrics that you can look at that will tell you when an investment is as safe as humanly possible. Though what I am about to tell you seems improbable, the recent sell offs have created situations where there are companies that meet these requirements all over the place. Look at the Balance Sheet and Cash Flow statements of companies you are interested in for 3 variables, Cash Flow, Total Cash and Total Debt. If you buy a company that has positive cash flow, no debt, and total cash that EXCEEDS the current market cap, you will most likely be sure of buying a winner. Essentially this is a situation where a money making company is being sold for less than the cash it has in the bank. Or in other words, someone could buy the company and make an instant profit by shutting it down and just keeping the money in the bank. (Before you consider the intellectual property, plant property and equipment, inventory, good will, ...)



It's not my style to tell people about what I am investing in. In fact, as an internal indicator, when I tell someone about a trade or investment I have currently open, I have to sell because it is a sign I use to tell myself that I have made too much money and am getting full of myself. But I will give you an example of a company that meets those requirements that I have NOT invested in. That company is Heelys (HLYS). They make a shoe for kids that has wheels that pop out of the sole. Sort of like instant skates. If you look at the <a href="http://finance.yahoo.com/q/ks?s=hlys">numbers on Yahoo finance,</a> you will find that the current market cap is $64.8 million, they have no debt, they have $93.25 million cash and cash equivalents, and they are cash flow positive. If you had $64.8 million, you could buy them and have a company plus $93.25 million for your money.



But I'm personally not interested in HLYS and would not recommend that anyone buy the stock. Their product is too faddish for my tastes, and they could easily turn to losses in the current economic climate. When that happens, they will eat into that cash pile and remove the only potential reason I see to own the company. There are a lot better investments out there right now.



Also, should you choose to look at fundamentals, I doubt that you will find a miner, or company in oil industry that is selling for less than net cash. (If someone knows of any, PLEASE tell me) But as Blackvault said earlier, do your research and you'll do better than you would by buying USO or GLD or SLV.</blockquote>


Just a few weeks ago i found a bunch of gold miners/exploration at cash equivalent that had zero debt, i can't name one now though, free lunches dont seem to last long.
 
[quote author="WINEX" date=1231121085]



Also, should you choose to look at fundamentals, I doubt that you will find a miner, or company in oil industry that is selling for less than net cash. (If someone knows of any, PLEASE tell me)</blockquote>


For what may be the first time in the history of mining stocks, there were miners selling for less than net cash about one month ago. I have not checked market caps lately, so I do not know if they are still net positive, but for awhile it was incredulous. Sorry, I am not comfortable giving names, but it is not that difficult to find them. Look for the mid-range and smaller PRODUCERS. Stay very clear of the explorers and the big producers will probably never be net pos. Also, look at the pm royalty companies. There are only a few, but there business model is extraordinary.
 
[quote author="WINEX" date=1231072016][quote author="PANDA" date=1231061601][quote author="WINEX" date=1231056420][quote author="PANDA" date=1231047588][quote author="WINEX" date=1230969569][quote author="PANDA" date=1230959305][quote author="graphrix" date=1230953456][quote author="PANDA" date=1230943052]OMG!!! DXO is up 36.68% today. Upperlowerclass, What can Panda do to thank you? I am keeping this one for a long time baby....</blockquote>


What have we told you about double 2X ETFs? You don't hold them, you trade them, because if the underlying security/commodity/index sta ys flat then time decay will make the ETF go down in value. You buy and sell the 2X ETFs on the spikes up or down. You can hold it, hope the trend continues, and hopefully make more money, but you will make more money trading the spikes. Keep in mind the real traders are chillin in Jamaica with you right now, and come Monday things could change really quickly. I know you don't like to "day trade", but the 2X ETFs are designed to be traded and you should get out when you hit a certain profit target.</blockquote>


Ya mon! Oil going to $200 mon! No Problem mon.</blockquote>


Buy now or be priced out forever!</blockquote>


Winex, Are you implying there is a bubble in OIL prices at $45?</blockquote>


No, I'm implying that your analysis isn't very well formulated.</blockquote>


Winex... I can tell you are a very sophisticated, sharp, analytical investor. I am an emotional investor and don't like numbers very much. I don't have any hard data and numbers to show you why oil is a good investment. My feelings tell me that crude oil is really cheap right now, so that's why i have been buying. :)



What's your opinion on going double long on silver ticker symbol:AGQ? Now, Silver seems to be more undervalued than Oil right now. I like Silver and Oil in 2009.</blockquote>


Like Graphrix said earlier (and I have said much earlier), the double ETFs are great trading vehicles (I scalped a little DXO last week myself, but have now closed the position). They aren't to be bought and held.



If you are bullish on the energy sector, there are a ton of bargains out there right now in the drillers and service industries. If you are bullish in silver, then look at the miners.



For short term trades, I look at technicals alone. I then determine my objective for the trade, place the trade, place a stop order in case I am wrong, and exit at a predetermined price. Sometimes if the trade is going in my direction, I will cancel my initial stop order and replace it with a trailing stop order so that I don't turn a winning trade into a loser.



Right now there is a massive battle going on in the economy between inflation and deflation. I believe that the Fed has demonstrated that there is no amount of money that is too great to be printed. But it appears that for the moment the deflationary forces are winning.



For the moment, I believe that the precious metals are caught in a (very tradable) range and that gold and silver are at or near the top of that range. And though the sell off in oil from the July highs until a week ago was historic in the depth and speed, I believe that oil has moved too far too fast in the short term.



If you want to play with leveraged ETFs, learn technical analysis and learn to close a trade that moves against you. They are wonderful vehicles for day traders and swing traders. But don't try to buy and hold them.</blockquote>


For some folks, I would say the miners may be a viable alternative for pm investing, but from what I can tell, I would not recommend them for you Panda. Miners are basically a hole in the ground with a liar at the top. It takes alot of research to <strong>GUESS</strong> which miner may be a good investment.

I do not like the pm ETFs for a couple of reasons. Take GLD, which had a Friday close of $86.23 or reflected a gold price of $863.20 per ounce, but spot price at Friday close was $877. GLD started at spot and will only degrade over time.

Secondly, if one is investing in gold as opposed to trading it, one probably thinks that our present fiat currency will devalue greatly and the caretaker and fiat creation institutions, (banks), will either go bankrupt, (which they have been doing), or may close for temporary holidays. If the banks and brokerages close or go bankrupt, GLD or any other ETF will not be the wealth preservation asset that the physical metal is. GLD, SLV, and the other pm ETFs are someone else's liability and the supposed holder is completely at the mercy of the ETF trustee. Physical gold and silver are no one else's liability. IIRC, Barclays is the GLD trustee. Good luck trying to get paid by Barclays if they run into trouble. Ask the Saudis how reliable Barclays is at making good on gold trades.

If you want to own gold, <strong>BUY GOLD</strong>, not a piece of paper or an electronic number.

If you want to own silver, <strong>BUY SILVER</strong>, not a piece of paper or an electronic number.

IIRC, the SIPC has a total of $6 bil to cover all covered accounts. And the SIPC is not backed by <strong>ANY</strong> government institution, nor is there any government implied coverage. The SIPC is nothing like the FDIC.
 
[quote author="PANDA" date=1231103004]Graph, Awgee, and Winex,



Thanks for your honest feedback on double ETFs. I hope i am not too late to take my profits on DXO on Monday and buy into USO or XLE. I don't know how you guys have the balls to trade this stuff. It is so nerve recking. "Day Trading is definitely not for the Panda."



Awgee, Are you saying that all ETFs are not good for long term hold? I am definitely not a big fan of mutual funds or individual stocks. Perhaps this not my cup of tea.</blockquote>


Honestly, I would say it is not your cup of tea. Learn one or two things well and stick to them. I do not know about all ETFs, but I do not think GLD or SLV or pm ETFs are good for long time hold. If you think silver will do well, buy silver, not some reflection of silver. You can buy 5 one hundred ounce bars from Tulving or single one hundred ounce bars on ebay. My estimation is that if things get as rough as I think they are, the chances that Barclays will make good on their pm ETFs is close to zero.
 
[quote author="awgee" date=1231143074][quote author="PANDA" date=1231103004]Graph, Awgee, and Winex,



Thanks for your honest feedback on double ETFs. I hope i am not too late to take my profits on DXO on Monday and buy into USO or XLE. I don't know how you guys have the balls to trade this stuff. It is so nerve recking. "Day Trading is definitely not for the Panda."



Awgee, Are you saying that all ETFs are not good for long term hold? I am definitely not a big fan of mutual funds or individual stocks. Perhaps this not my cup of tea.</blockquote>


Honestly, I would say it is not your cup of tea. Learn one or two things well and stick to them. I do not know about all ETFs, but I do not think GLD or SLV or pm ETFs are good for long time hold. If you think silver will do well, buy silver, not some reflection of silver. You can buy 5 one hundred ounce bars from Tulving or single one hundred ounce bars on ebay. My estimation is that if things get as rough as I think they are, the chances that Barclays will make good on their pm ETFs is close to zero.</blockquote>


Awgee,



I totally agree with you on holding SLV and GLD. They are good for trades, but not good to buy and hold. I consider them to be Fool's gold and silver manipulated by the big boys in Wall Street. There is liability risks and no proof that the gold is really there on the other side.



Funny that you mention to stick with one or two things you do well and stick with it. For every dollar i put into my business i get a huge ROI. Everytime i play the stock market, i lose a lot of money. I definitely know that trading stocks IS NOT Panda's cup of tea because honestly, I CAN'T STAND researching companies and looking at technical charts. It doesn't excite me like it does for BV and Winex.



Perhaps only Entrepreneurship and Irvine real estate are the two Panda's cup of tea that i need to focus on.



Thanks for the advice Awgee.
 
Whew!



I safely removed my 50% gain on DXO. No more 2x ETFs for the Panda. Thanks Graph, Winex, and BV for Warning the newbie day trader.
 
Hi all,

Not sure if we had a separate thread for commodities, but here goes:

Does anybody think that oil will go up? I've never traded commodities before, but I'm just dying to buy futures for 1000 barrels (it is a minimum lot) at these low prices in hopes that the oil will go up again.

So, my question is, if you buy oil futures (and I don't want to margin my account, 100% cash), is there a time limit on holding them? Are there are oil futures that I can buy and hold indefinitely and then sell whenever I feel like it?

Sorry for the unsophisticated question, but you gotta start somewhere, eh? :)

Any advice is much appreciated.
 
[quote author="blackacre-seeker" date=1231256037]Hi all,

Not sure if we had a separate thread for commodities, but here goes:

Does anybody think that oil will go up? I've never traded commodities before, but I'm just dying to buy futures for 1000 barrels (it is a minimum lot) at these low prices in hopes that the oil will go up again.

So, my question is, if you buy oil futures (and I don't want to margin my account, 100% cash), is there a time limit on holding them? Are there are oil futures that I can buy and hold indefinitely and then sell whenever I feel like it?

Sorry for the unsophisticated question, but you gotta start somewhere, eh? :)

Any advice is much appreciated.</blockquote>


The best advice I can give you is to not even THINK about trading futures until you know a lot more about how they work. Going in with the level of knowledge you just demonstrated is a guaranteed way to hand all the money you have to trade (and possibly more) to people who do understand the markets.



One book that I would recommend is Trading Commodities and Financial Futures by George Kleinman. You won't be ready to trade futures after reading it, but at least you will know what you don't know.
 
[quote author="awgee" date=1231141012][quote author="WINEX" date=1231121085]



Also, should you choose to look at fundamentals, I doubt that you will find a miner, or company in oil industry that is selling for less than net cash. (If someone knows of any, PLEASE tell me)</blockquote>


For what may be the first time in the history of mining stocks, there were miners selling for less than net cash about one month ago. I have not checked market caps lately, so I do not know if they are still net positive, but for awhile it was incredulous. Sorry, I am not comfortable giving names, but it is not that difficult to find them. Look for the mid-range and smaller PRODUCERS. Stay very clear of the explorers and the big producers will probably never be net pos. Also, look at the pm royalty companies. There are only a few, but there business model is extraordinary.</blockquote>


Not a producer, in fact they don't seem to be much of anything, kind of a crappy company, but USEG is at .73 on the dollar. 39M market cap, 70M cash and 16M debt. I'm in at 1.73, gonna take a short ride on this one.
 
IMO thats the whole reason that the market is staying put and slightly rising. The market always prices everything in...it already has been pricing in the 775B stimulus and a bit on the excitement that Obama will finally be president. This is why I'm starting to shift my portfolio. I think we rally a bit more, probably till S&P hits 1K and then we are going to go further lower than we were before. I can't say 1K is for sure, thats why I have to watch the technicals very close. Once I have several indicators signaling a shift, I will move very quickly and swiftly.



Aside from trading...

Europe is contracting, Japan is contracting and so is China. This isn't a local issue its a global issue that will have major consequences. Have you seen the economic news the past 2 weeks? It is beyond horrific. Each time it gets worse and worse as things deteriorate, yet we stay put and even rally a bit. Remember when industrials fell to a 30 year low like a week or so ago? I think the numeber was like 32 and they were expecting a slight improvement from a previous month of like 45 from 42. Yet the market was up 258 pts or so? Come on now...people are already drunk and drinking more...



People are still happy coming from X-mas and hoping that the New Year will bring new fortunes...give it till end of this month or maybe mid Feb, before firms are slapped with disappointing earnings, leading to more job losses, to forclosures and ARM resests definately not helping anyone.



Cheer the low rates? Go ahead...isn't low rates what got us into this mess? Is the Fed that stupid to combat the problem using the problem? This isn't a snake bite...





5-6K Dow is still my target assuming we dont have a major war with either Russia, China or US involved with whoever else. Then I'd say Dow to 2K.



So I will position myself accordingly. If I'm right, I'll profit...If I'm wrong, we won't have a war and everybody will be happy. It's almost a win win.
 
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