Fringe - Massive Dynamic set perspective issues

I noticed that the background image behind Massive dynamic's CEO's office was a little off. Here's why:

Random Speed Paintings

I haven't been doing much personal art lately and feel kind of guilty for not being "art productive. Here are some speed paintings that served their purpose in satisfying that artist inside of me... now back to charting the markets.

Nakatomi Plaza Photo Edit

Here's a Photoshopped Fox Tower (Nakatomi Plaza) done for my dad who's a huge fan of the movie Die Hard. He couldn't get a clear shot without being run over by cars, so I ended up editing out the lamp post on the left and repainted the stuff behind it. Props to those matte painters who happen to fool us practically every day.

Closed UNG - Great little Experiment and Lesson

In my previous post I mentionned that my breakeven was brought down to 10.95 because I wrote Nov 11 calls for 0.9 against my position. Since UNG tanked below the ascending trendline, the short call position dropped to 0.5, which would make a 0.4 profit on the short side. So I decided to buy back the Nov 11 calls to lock in some profits on the down side. So that made my new breakeven to 11.35.

So the long short of it was...
Bought at: 12.05
Short Nov 12 calls at: -0.50
Covered Nov 12 calls: +0.30
Short Nov 11 calls: -0.90
Covered Nov 11 calls: +0.40
----------
New Breakeven: 11.35

... Then I sold it at: 11.45... which makes 11.45 -11.35 = 0.10

So all that work for 10 cents:). But at least I didn't loose any money.

The moral of the story is that hedging your bet is better than not hedging at all. If I didn't write calls against my position or even bought puts, I would lost from 12.05 to 11.45. That's a 0.60 loss. Now imagine if you had 500 shares, that wouldn've been a loss of $300 in a few days. It's not the kinda risk I like to take.

In addition, another important lesson learned was that I should've picked an uptrending stock with decent yield. I guess that part completely slipped my mind.

Getting back to Blog and trading.

Decided to try out covered calls with UNG (Nat Gas). I know it's not the most popular ETF around but I figured I should be able to make money on the up and down side... whichever way the price goes.

Since the USD/CAD is showing more signs of weakness, I figured that I'd pick a commodity that's pulled back significantly on the monthly/weekly, but has strengthened a bit and could potentially entering a stage 1 basing. The price of UNG finally broke a long ass weekly descending channel. It by no means it will V bottom, but it does mean a fundamental shift in price geometry. Volume has also been heavy on the rise up leading the breakout (09/04/09 to 10/02/09), and at the current state it's still holding above the breakout point.

Here's my trade so far:

Bought UNG at: 12.05
Sold to Open Oct 12 Calls at: -0.5
Bought to Close Oct 12 Calls at: +0.3
Sold to Open Oct 11 Calls at: -0.9 (option expiration on the 11/16/09, 7 days away)
So my Break even is now at: 10.95

This position is meant for covered calls so I can generate income for the long run. Essentially I'll collect rent money until UNG gets shut down. Or, if I get striked out before options expiration, I still win. The goal is to keep selling calls against my position untill I get bored.

WFR - Gap Play B4 work.

Snuck in a quick trade this morning. Things have been hectic with work and my parents visiting, but I did manage to get one in for the week.

Traded WFR for a quicky. It gapped lower so I was looking for signs of strength for a potential gap fil and found it after walking the dogs. All the stars were lined so I pulled the trigger at 17.43 and rode it up to 17.65 for a 22 cent gain... times X amount of shares of course.

Here's the setup... BTW, the stock has been hammered for the past week, so I didn't want to hold it even for a swing trade... As I'm writing it looks like it's gonna pop again...

Sony Motion Controller - I worked on the RTS part

Here's my contribution to the RTS part of the presentation (near the end). It was actually an emergency last minute request from the team so I was kinda stuck doing it. Hectic weeks leading to E3. Anyway, I'm glad the turnout was positive.

Closed UNG

Closed UNG it at $15.72. Could've made more but don't wanna be greedy in a bear market. Still happy with the profit... I mean profit is profit.

It was looking like an inside day which usual means a reversal of the recent trend. Additionally, I have E3 in a bit so having this on my mind would get me too distracted. So, cash position for now.

If USO (crude) is any indication of the direction of the energy sector, then it seems that it has formed a short term top. I'm looking at a retracement or a gapfill of 36.4 eventually. So I'd stay away from oil until it retraces. It's likely to hit major resistance at the 39 level. So I guess selling UNG isn't a bad idea after all.

UNG Swing Trade and WFR idea

Bought UNG again
B/E @ $14.83
Sold 1/2 at $15.97 for a %7.68 gain
Will let the rest ride as long as support trendline from the 30min chart remains intact
Stop set at $15.15, just below today's low


WFR has a sweet breakout.
Will try to enter if pullsback, if not, will buy 1/2 position the next trading day
ideal stop would be a bit below breakout point or low of the day... roughly $19.5

UNG - Closed Position

Had to close because it started to look really weak. In fact it started looking like a bear flag and gut tells me price wants to retest the breakout area of $16ish. Did make a tiny profit though... of course not enough to brag about.

- Closed @$1.10
- Opened @$0.9, which makes a profit of 22%
- Will likely retest the breakout area of $16ish
- EIA Natural Gas report coming tomorrow... anything can happen. Don't wanna chance it.
- All in cash now. Will see how market reacts the next few days.
- Market pretty extended.

UNG - Channel Breakout

- Opened position UNG June $18 Calls @ $0.9
- Will add if holds >$16.
- Target or exit @ $18 or better...will see.

Mega volume possibly due to short covering or insitution buying. Nat Gas unsdustry been hammered for the longest time. Broke above channel with significant volume. I missed the first moves but entered at consolidation. Will see if bullflag formation manifests itself. If so, will add 2nd position.

ATVI - After Earnings

After beating analyst estimates, ATVI raced to the next area of resistance at $12. Still have room for more, but it's a Friday and I don't feel like holding anything over the weekend. It will consolidate a bit before jumping higher. I'll wait and see if I get back in or not. Don't intend on chasing price. Here are the the trade details:

- Bought June $11 Calls @ $0.85
- Closed June $11 Calls @ $1.45
- Profit of 70.5% or $0.6 x Number of Contracts

Here's the chart...

ATVI - Ahead of Earnings

Weekly Chart of Activision


- Bought some ATVI June 11 calls with a B/E @ 0.85. Small premium at risk... no worries.
- Price stuck in up channel.
- Money Flow still pointing up, Stochastics flat in the 75 area. Moving Averages flat or pointing up.
- Earnings coming tomorrow aft close (ATVI has $WoW, $CoD, $Guitar Hero) May surprise

... Will see how goes.

Where are we now...

For the past two years or so, I've been pretty much obsessed with the equities market. Ever since it collapsed in late 2007, my 401K and IRA lost a portion of its value. I know I'm not alone, but I wanted to know the reasons behind it and how I can spot the signals before future market corrections.

With that in mind, I started to educate myself about the world of equities trading. I took baby steps at first and started with fundamental analysis, but that proved to be useless in a bear market govern by fear. With fundamentals, I can go on and on about what I think a stock price should be because of XYZ reasons, so in essence it's all based on past history and potential future forecast that can of course be manipulated. What I really needed was something more technical and visual, being an artist and all. So my path took me towards technical analysis. It is a study of price action among many other things which I don't have time to get into. All in all, EVERYTHING appears in the charts first. Even before the news. Anyway, back to the point of where we are...

Here's an analysis I did of the weekly chart of the SPY (S&P 500 ETF). I wanted to see what I would've done differently knowing what I know now. As I was drawing on top of it, I notice a lot of signals that should've made me pull out of my IRA and 401K. Live and learn. For now, I'm mostly in a cash position and I trade whenever can or when I spot an opportunity (pre-breakout) I simply can't resist. As for longer term investments, I wouldn't add anything to my retirement stuff until price breaks/holds above a flattened 200 day moving average (Blue line). As you can see we have ways to go.

Ip Man - The Movie

This Movie's a must see! It's by far the most realistic Wing Chun movie ever... or even the most realistic Kung Fu movie for that matter. You won't find any flowery action or wire work. It's pure Wing Chun. However, aside from the few scenes that displayed chain punches, the actual combat was pure traditional Wing Chun and badass.