Sold all 60,000 shares at around .093 or so for a decent loss.
It looked like the stock would be capped at .10 today, and that further upward movement was not likely here in the short term.
I will be moving these funds to Ameritrade, so I am not sure when I will be able to trade again. It depends on how long it takes to open and fund the new account.
¶ 5/21/2008 12:08:00 PM 2 comments
After a pretty long relationship, I will be switching my main trading account from Scottrade to Ameritrade soon. I will list the reasons below, but the main reason is that the margin department switched my margin account to a cash account. In my opinion a cash account is useless. You can have a margin account without going on margin, but the benefit remains. The benefit is that you can trade stocks without having to wait three days to make the next trade. For example, you buy a stock on Monday with all of your cash, then sell it on Tuesday. In a cash account, you would then have to wait till Thursday or Friday to buy the next stock. In a margin account you can do it right away.
My account was switched because of those day trades I made a couple of weeks ago. The margin department at Scottrade has a number of avenues available to it before it makes me deposit $25,000 or removes my ability to borrow (if you did not know, there is a federal rule that if you consistently day trade, that you are labeled a "pattern day trader", and you cannot go on margin unless you have $25,000 in your account).
The Scottrade margin department decided to change my account to a cash account. This margin department is the same one that made me liquidate all of my clients positions the day NSTR tanked. Had they given me the normal 3 days to do this, the client losses would not have been as substantial. Their reasoning had been that NSTR could keep falling, and the situation would get worse. I ended up having to sell everyone out at near the lowest PPS the stock ever dropped to (around $1.30). The next day the stock stabilized, and has been rising up slowly ever since.
Here are some other reasons for the change:
1. Bad Executions - I have noticed that when I am on the bid, others get shares, but I do not. Even when my order was the first to be at that price.
2. Higher Costs on Penny Stocks - While they boast $7 trades, their charges for penny stocks are .005 x the principal, plus $7. This can be quite expensive some times.
3. Higher Costs on Options - They charge $1.25 per contract, plus $7. Other brokerages charge $.50 to .75 per contract, plus the standard commission.
4. Increasing Online Stock Restrictions - These are stocks that Scottrade will not let you buy online, and only by phone. At first these were just OTC or Pink Sheet stocks that had high volume and price movement. Their reasoning was that maybe these stocks were being artificially boosted by computer hackers getting into client accounts, and buying the stock. However, the amount of these stocks that had this designation started to increase, and it seemed like any stock that was restricted were one's I could have made a lot of money on. In my opinion, it was very unlikely that all of these could possibly be rising due to hackers. Then the restriction started stretching to AMEX and NASDAQ stocks. These stocks did not even have high volume or rising stock prices. One stock in particular, TQ, was one that I wanted to buy. The stock had not had much volume for a while, and was slowly declining. I had been waiting for some news to hit, and when it did, I went to buy. The stock had not moved much yet on the news, and was selling for .16. I tried to buy 15,000 shares at that price, but was not allowed to online. I could not make the trade by phone at the moment, so I did not. The next day the stock went to .65! That was a huge opportunity cost for me. There is no imaginable reason why it was restricted by Scottrade. Maybe they were short shares? I don't know, but I don't like it.
5. Inability to use Fractional Penny's on AMEX Stocks - With Scottrade you cannot purchase or sell stocks on the AMEX in less than penny increments. For example, if the spread on AAC is .093 x .095, you can only place an order for .09 or .10. This is not true with Ameritrade.
With all of these negatives, you wonder why I have stayed this long. One of the main reasons is customer service from the brokers. Whether it has been at the branch or headquarters, the staff at Scottrade has always been excellent. They have always been gracious, and quick to resolve my problems. This to me is worth quite a bit. You can lose money with bad customer service and people who will not resolve your issues satisfactorily. However, the negatives now outweigh the positives, so I am moving on.
¶ 5/18/2008 11:12:00 AM 2 comments
Below is the chart for this week. Since it shows up small, you can just click on the image, and it will be large enough to view.
The rows in white represent stocks that were sold during the week. The "Day Gain/Loss" columns represent what happened Friday.
Not much of a week for me. I did not lose much, however, yesterday really blew what could have been a good week (down over a $1,000). The YTD loss is now at -85.8%.
Obviously, my week was determined by ACC, since that is the only stock I have owned during this time. As I mentioned yesterday, I plan to hold it a little longer to see if it comes back like AFT did, unless it breaks below .09. I am not sure how long my patience will last though.
Look for some new trades by the end of the month when I put some more funds in my account. Working with such a small amount has proved very difficult. I think the market is looking much better right now, so I think I have a good shot at duplicating my old success now that conditions are more favorable. That means buying stocks that are greater than $5 for the most part. There may be a little lull in my trading after I sell AAC, as I will be changing from Scottrade to Ameritrade. I will go over these reasons tomorrow.
One more note on the difficulty of trading with a small amount of funds. Hats off to Timothy Sykes, who has taken $12,000 and made it into roughly $18,000 in about 6 months. A lot of people didn't see the point of him making small gains each day ($100 or less most of the time), but as you can see, it added up. I would imagine that once he hits $25,000, you will start seeing the daily gains grow (at $25,000 a pattern day trader can use margin).
That's it for the wrap-up. Have a great rest of the day!
¶ 5/17/2008 10:33:00 AM 2 comments
Last night I said that the chart for ACC looked very good, but was a little suspect. That suspicion was well warranted, as the stock could not follow through today. I had also said we needed that follow through to be more confident of the bullish indicators that were present. Unfortunately, two out of three of those indicators are now bearish. The stock closed back below it's 20 day EMA (.104), and the RSI fell back below 50. The only bullish indicator we have left is the MACD, which is still positive.....so far.
In my opinion, if you own this stock now, it is just for fundamental reasons. Which may mean holding until next earnings (3 months from now) before you see any gains. However, I thought that same thing with AFT, and was very wrong. That stock also fell the day after earnings, but then rose steadily afterwards. It continued to rise all the way up through earnings, and is now selling at more than double what I sold it for. So based on that experience, I will hold onto AAC a little longer to see if it will rebound, unless it drops below .09.
¶ 5/16/2008 07:18:00 PM 0 comments
As promised in the comments section, below is the chart for AAC:
This chart looks very good, but is a little suspect. The reason I say that, is that while the stock closed at .1095, the spread finished at .093 x .10. This does not impact the technical analysis, however, I would want to see some follow through tomorrow to be more confident about it.
That out of the way, let's look at the chart. The stock closed above the 20 day EMA (.104) for the first time in a couple of weeks, the MACD made the bullish crossover, and the RSI rose above 50. All bullish signals. I think the key for the stock tomorrow would be another close above the 20 day EMA. After that, I would look for a move up to .12 resistance, which also happens to be the 50 DMA. Beyond .12, there should be a lot of resistance at .13. We'll see how it goes. Support should continue to be at .09.
¶ 5/15/2008 06:58:00 PM 2 comments
It looks like this quarter was better than the previous quarter (higher revenue and lower loss). No reaction so far with the stock. I think the key will be the PR that comes with the filing, which should have future guidance and include talk about their new real estate ventures.
Below is the link to the 10Q:
ABLEAUCTIONS COM INC Files SEC form 10-Q, Quarterly Report
UPDATE: The company has now released the PR that goes along with the 10Q. Unfortunately, they gave no future guidance, other than to say that we will see a much further reduction in costs for quarter two. That may or may not push them back to profitability. They only lost $194,000 this quarter (.003/share).
One other note, is that they bought back and retired about 5 million shares over the last three months.
So far there has still been no reaction to today's news. Below is the link to the PR:
Ableauctions Announces First Quarter 2008 Results
¶ 5/15/2008 12:19:00 PM 4 comments
While I was on my break, I added a link on the right hand side to Xearn. I think this is a pretty neat site, and would encourage every one to take a look at it.
What they do, is allow you to create a paper portfolio with $100,000. You can base it on your own portfolio, or go a completely different direction. Xearn will keep track of everything. You make the trades real-time, just like you would with your broker. If you are good, you will be able to get subscribers to your portfolio. And if you are really good, you can charge those subscribers a fee to see that portfolio. Xearn will also keep track of that, collect the fees, and pass them onto you. Obviously, they take a small percentage of those fees. It's a great deal however, as I know full well how much it costs to set all that up yourself, and it looks much easier to go this route, in my opinion.
Either way you go, please check it out (Xearn). The site owner has asked for feedback, so please let me know what you think, and I will pass it on to him.
¶ 5/10/2008 10:50:00 AM 9 comments
Not a very good week for me. The week started off okay, as I lost money on HOTT, but more than made it up with day trades of CRUS, SPF, & INAP. Unfortunately, my next two moves were not as good. Those would my buys of CYTR and AAC. The former cost me about $150, and the latter has cost me about $750 so far (I currently own 60,000 shares at an average of .105/share). However, AAC is subject to 2 to 3 cent swings every day, and at 2pm I was actually up about $300 on the trade. That would have made for a very different week.
As it is, I lost another 6% this week, and my YTD loss is now up to -85%.
One more note on CYTR. While I did lose on the trade, selling at around .823 turned out to be a very good move. The stock is now at .71. Another good move that I made, which I was chided for earlier in the week, was selling INAP. The stock fell as low as $4.25 today, and finished at $4.84. I sold at $5.11 and $5.18.
One more note on AAC. While I am currently down on the trade, I think the stock still has good potential. Earnings should be coming out next week, and the chart is still okay (the MACD is still above the center line). My hope is that the company will expand on their future growth opportunities, stock buyback plan, and construction progress. We'll see.
After I complete my trade of AAC, I will probably have portfolio with a mix of stocks that I write calls on, and ones that are small like AAC. On the smaller company's, I will be looking for possible turnaround stories. I think AAC is in that category because they have had declining revenues under the auction business over the past year, but are now trying to branch off into a new business that could give them significant growth if they are successful.
¶ 5/09/2008 08:54:00 PM 0 comments
AAC - Bought 40,000 shares at an average of around .1075.
I will go over my reasons for buying this one later today.
CYTR - Sold all 5,300 at around .823 for a small loss. I changed my mind about the purchase, and felt that AAC was a better bet.
UPDATE: Here is one of the reasons I bought AAC today:
Ableauctions Commences Construction of Gruv Development
The company has already collected $2.34 million for this project, which equates to about half the revenue they made in 2007 ($4.9 million). Additionally, the project when complete will garner $25 million total, which equates to 5 times their 2007 revenue. Profit on the project is expected to be in the neighborhood of $4 million. In 2007 they lost $693,000. In my opinion, this deal is not reflected in the share price yet.
This deal was a good move for the company, as their traditional auction business has not been growing.
Another reason I bought AAC, was this:
Ableauctions Stock Buy-Back Program Exceeds 5.6 Million Shares
Lastly, if the stock closes at .11 or better today, it will look very good technically as well.
UPDATE 2: Bought 20,000 more shares at .10.
¶ 5/07/2008 11:51:00 AM 2 comments
Sold all 2,400 shares at $5.18 for a small profit.
¶ 5/06/2008 03:27:00 PM 0 comments
Sold all 2800 shares at $4.35 for a small profit.
¶ 5/06/2008 02:09:00 PM 0 comments
CRUS - Sold all 2,100 shares at $5.74 for a small profit.
SPF - Bought 2,800 shares at $4.31.
¶ 5/06/2008 01:07:00 PM 0 comments
HOTT - Sold all 2,500 shares at $4.845 for a small loss.
CRUS - Bought 2,100 shares at $5.66.
I thought CRUS was trading better, so I made the switch. We'll see how it goes.
¶ 5/06/2008 11:47:00 AM 0 comments
I hope everyone watched INAP today. Please refer to my post three below this one ("My Trading Day Today - SPF, CRUS, INAP") to see why I am mentioning this.
If you recall, I sold the stock after hours at $5.11 on Friday, which was 10 cents above the closing price. As I said in that post, this seemed like a bargain, however, I was leery about it based on some past experience I had with another after hours trade. Sure enough, after opening at $5.02, the stock quickly rose to $5.29 this morning. So $5.11 ended up not being so so much of bargain anymore.
While I am content with the profit I made on the stock, I think from now on, I will refrain from selling when the bid is much higher than the closing price, or buying when the ask is much lower than the closing pricing. In the absence of news of course.
¶ 5/05/2008 07:38:00 PM 1 comments
Bought 900 shares at $4.95. If the stock can close above $5.00, it will look pretty good technically. The MACD is just over the center line, and the RSI is above 50. $5.00 is the 20 day EMA. The 50 DMA is $4.76.
The stock is retracing after going from $4.80 to $5.60 recently.
UPDATE: Bought 1600 more at $4.90.
¶ 5/05/2008 11:48:00 AM 0 comments
One of people that commented recently asked for a portfolio update. At this time I hold no positions, but the percentage loss/gain for the year is -79%. Not a good year so far by a long shot. However, with the market improving I hope to turn that around. It's definitely possible, we'll just have to see if I can pull it off.
I will not be commenting on client percentages anymore. The reason is twofold. One, at the moment, I am only trading for one client, so there would be no transparency there. Two, it is too much work for me to update the blog with two different sets of numbers. At least more work than I feel like putting into it right now. It was worth it previously when I was trying to gain new clients, however, I am no longer trying to do that, so that incentive is gone.
¶ 5/04/2008 09:46:00 AM 0 comments
Well, I guess I came back with a bang, or should I say bust. SPF did not trade the way I had hoped (see post below). It started out well, going as high as $5.23, but then retreated. I thought for sure it was going to break the 20 day EMA ($5.25) after the initial pullback, which would have been bullish, however, it continued downward. I continued to hold, since as I said below, the key was support at the 50 DMA ($4.86). Once the stock broke below that though, I put my sell order in, and was lucky to get out at $4.89. That was a 24 cent loss for me. I say lucky, because the stock closed at $4.50.
After a couple of day trades that resulted in small losses, I bought CRUS at $5.75. The stock was already down $1.68 or 23% at that time. Looking at the chart for CRUS, I saw that there was support at $5.74 and $5.65. I decided to go with the first one, since I did not want to miss out. As it turns out, I should have chosen the second one, as it did hit $5.65, which was the low for the day. After that however, the stock began to rebound, and I had to pick a sell point. I picked one cent under the 200 DMA ($6.05). This ended up being a great move. I sold the stock at $6.04 for a 29 cent profit, and the stock only went as high as $6.05 or so after that (it closed at $5.85).
INAP was the last stock I traded. I bought it at $5.00, and thought at 4 o'clock that I only had a penny gain, which I would have been content with by the way. However, I noticed the bid in after hours was $5.11 (10 cents above the close), and there was no news. It's hard for me to pass up after hours discounts or premiums from the closing price, so at 4:15pm I sold all 2,400 of my shares at $5.11. The sale went through immediately. This was great, since I locked in a nice profit that I did not think I would get today, however, at the same time it makes me wonder why someone was willing to buy shares at 10 cents over the closing price. And I was not the only one who took advantage of this situation as well by the way.
The reason I am a little leery of my good fortune with INAP today, is because of something that happened a number of years ago. I owned a stock that closed at $5.08, but had an ask of $5.00 in after hours. There was no news. I figured this was a bargain, so I doubled up at $5.00. Those shares instantly showed a profit in my account. However, the next day, before the market opened, the company released bad news. The stock opened up at $4.70, and never recovered. So my bargain at $5.00, wasn't so much of a bargain. It will be interesting to see what happens, if anything, with INAP on Monday.
With the sale of INAP, I am now 100% in cash. I will be looking for new opportunities over the weekend for Monday, which may include INAP if I can buy it around $5 again.
¶ 5/02/2008 07:29:00 PM 2 comments
It looks like my break is over. I am not sure how often I will post, but I thought I would share this stock with everyone. I have another that I will probably post tomorrow.
Below is the chart for SPF:
I bought this one today at $5.13. Looking at the chart, you can see that the stock has been in a nice, slow but steady, uptrend since the end of January. This trend has been tracking the stocks 20 day EMA and 50 DMA on up. Right now, the stock looks like it is bouncing off of that 50 DMA ($4.86) as it did back in mid-March. The pattern we have right now looks very similar to what we saw at that time. The RSI is just below 50, and the stock has made it's second successful test of the 50 DMA.
If the stock can close above the 20 day EMA ($5.26) tomorrow, I think we should see the stock hit $5.86 (200 DMA) next week. SPF definitely has no trouble moving up or down 50 cents in one day. On the flip side, we need to watch out for a violation of the 50 DMA. If the stock breaks that support, I would probably sell or stay away.
¶ 5/01/2008 07:56:00 PM 6 comments
You may have noticed that there have not been any posts since Tuesday. That is because I decided it was time to take a break. This break may last weeks or months depending on how I feel, and how other circumstances play out.
At the moment I really do not have a whole lot of funds to invest with, and therefore I have been restricted to trading mostly penny stocks. This restriction is somewhat due to my own investment philosophy, which is to always have enough shares to make a high impact on the account balance. The other reason for this restriction is the market itself. Currently, the market is very poor, and I expect that to continue for at least another couple of months. Right now I would recommend going short. One requirement by brokerages on going short, is that you have to short marginable securities. For Scottrade, these would be ones that are at least $4.00 or higher. With the funds I have available to me, I would not be able to short many shares of any company. So when you consider the current market conditions, the funds left available to me, and my own philosophy regarding shares, there is only one other alternative, which is to buy non-market sensitive stocks that have a low price per share. That only leaves you with penny stocks. By nature these are more risky though. There are charts to read for these stocks, but they are not as accurate as the ones for the larger stocks. That is because there always other factors that come into play with penny stocks. A lot of them are news and momentum driven, and others are manipulated. Additionally, trying to post these trades in a meaningful way is difficult if you cannot do it real time, and everyone is checking in constantly. You have to move pretty quickly sometimes with these trades.
So one of the reasons for me to suspend the blog is that I do not have anything I feel is worth posting. The other reason, is that with the more difficult "investments", my performance has continued to sink. While I have posted before during rough patches, it's getting a little bit tiresome at this time for me to continue to do so. It's bad enough feeling to lose money, but it's compounded when you then write about it too.
If I look back, I have been in a downtrend pretty much since the market started falling in mid-July 2007. Yes, there have been some up times during that time period, but for the most part it has been down. Back in the summer I had over a 150% YTD gain, which fell by 25% by the end of the year. I think that drop would have been greater had I not curtailed the trading in that account to focus more on client accounts. This year I have already lost over 25%. So it has been quite a bad streak, and it is tough to keep reporting on it. So my plan is to keep working on reversing this trend, and to get the account balance back up to an amount that will allow me to short stocks, or go long on more conventional stocks, if the market is back by then. When, and if that occurs, I will be back posting again.
You may be wondering about client funds, since I have posted before when all I was trading were those funds. At this time, those clients with enough money to go short have opted to stay in cash, the others are in a similar situation that I am in account balance wise. This of course is mostly due to the NSTR debacle. I am also striving to get these account balances back up as well, but will have the same difficulty that I am having now with my account.
Another question you may be asking, is why the performance drop. This is something that I also asked myself. In looking over the last 2 years or so of data, I have come up with what I think is the answer to that. In both years the reason I had very good performance numbers in the beginning of each year, but poor ones at the end, all had to do with the market. In 2006 I built up a +50% gain through early May, but then that started to go down afterwards. That number even went negative by the fall, but then picked back up to where I finished +27% for the year. Last year, as I said above, through July I had +150%, but lost 25% of that by years end. In each case the numbers correspond with the performance of the market. In 2006, the market started to decline in mid- May, and did not recover until September. In 2007, the market began to decline in mid-July, and still has not recovered.
So why was my performance tied to the market? Looking at my trading strategy more closely, you can see why (by the way this is something that I came to the conclusion on recently as I was reviewing my history). I trade mostly based on technical analysis, and I buy high concentrations of stocks, and use the full amount of margin that I am allowed. In bullish markets, bullish chart formations more often then not predict stock prices pretty accurately. If you know how to read the charts, and you sink a high amount of funds into the trade, especially more than double the amount of funds you actually have (margin), you will make huge returns. However, in bearish markets, bullish chart formations more often break down, and are not as accurate, so my trading strategy then backfires. You lose a lot more money. So inevitably what happened both years was there was a gap between when the market started falling, and the time I realized that that was going to be the longer trend (not just a temporary correction). Once I realized that, I turned to non-market sensitive stocks. This is not a bad strategy, however, as I said earlier, the charts for these types of stocks are not as reliable, and there are other factors that influence these stocks that are unrelated to technicals. So it is tougher to make money on these, although not impossible (I had had some real good success here prior to starting the blog). Additionally, once you start losing ground, you start second guessing yourself, which is never a good thing in the market. This was worse for me on the client side, as I was more nervous about losing someone else's money than my own. However, nearing the end of 2007 I thought I had a solution to this issue, and the effect of the poor market. Writing calls.
Writing calls on stocks do two things, one, they mitigate your downside risk, and two, they take most of the emotion out of a trade. This is because once you write calls on a stock, you are kind of locked into a position. You can get out of it, but usually unless the stock tanks, or sky rockets, it is cost prohibitive to do so. The reason they mitigate downside risk, is that as a stock falls, your profit on the call rises. There is a limit to this of course, which is the amount you sold the call for. In the case of NSTR, the calls were sold for around $2/share, but the stock fell about $7 overnight. So it did curtail the loss, but not to an extent that made enough of a difference. This new strategy for 2007 started off very well, and it looked like things were getting back on track, and in fact, if it weren't for the aforementioned NSTR, I think it would have continued to work. One of the stocks that I had written calls on was MBI, which looking back at February would have ended up doing well for clients (February was when the calls I had written would have expired).
One thing I also looked at was my past performance prior to 2006 as well, and what I found was that in years where I had good success, and the market was down at the same time, I had always had a couple of great trades in the penny stock market (that is one of the reasons I turned to it in 2007 and now, despite it's "toughness", when the larger markets went sour). So while I may have made a number of trades that did not work out at that time, I also had some trades that made $10,000 to $40,000 in one shot. Those will help you make up a lot of ground in a hurry. So far I have not recreated that this year, but it is not out of the realm of possibility. To give you an idea, BLLB went from .0005 to .008+ in about a week. That is about a sixteen-fold gain. And there have been others like that too. It's all just a matter of timing and finding the right one. Not easy, but not impossible either.
So as I getting ready to end this very long post, I want to emphasize that I think right now, the best strategy is to go short. As I mentioned earlier, I think the market will continue to fall over the next couple of months, so bearish charts should be very accurate. We may get a rally on Monday, which should provide a good shorting opportunity. The best shorts are usually on stocks that have rallied up to their 20 day EMA, but fall just short of that mark. This assumes that they are also below their 50 and 200 DMA's as well.
Despite the recent downturn of fortunes, I have always loved communicating with you, and have enjoyed your support. I want to wish you all good luck.
PS: If you want to get a hold of me, you can still email me at stockinsight1@yahoo.com. Take care, Rob.
¶ 3/08/2008 10:30:00 AM 7 comments
ACII - Sold client out at .032 for a decent loss. The stock broke below .035 support, so I sold. The other technical indicators were not favorable either.
WNBD - Bought shares for a client at .02. It bounced off .015 support, and is now above the 50 DMA (.0163). This one is due for news, and has pulled back from .05. If it can close above .0251 (20 day EMA), that would be bullish.
¶ 3/04/2008 02:39:00 PM 0 comments
