Friday, November 30, 2007

RIMM, AAPL tarred and feathered by mutual funds?

Nasdaq down just 7 points, but Apple ($182.22, -$2.07, -1.1%) and Research in Motion ($113.82, -$8.26, -6.8%) got pummeled. Why? Some theories.

• This is November 30, end of year for mutual funds, which begged for profit-taking. The swoons today were in chunks, huge volume chunks, not your retail investor type of move down.
• Big run-up from the recent low of 97 gave sellers reason to get out.
• MMs shook out all weak hands, taking advantage of an overall optimistic atmosphere (Kohn + Big Ben = Santa Claus) in these two tech bellweathers.

The sad thing is, I've normally gotten good prices on my top/favorite stocks precisely in this kind of selloff. Friday buys, late in the day, have been good to me. This would've been a prime example since RIMM dipped below 113 after opening at 124. Instead, I bought on an early dip at 120, completely naive about what was to come. AAPL got as low as 180+ before rallying to 182+ at the close.

Still, if my theory about the mutual funds is right, they'll be buying back in next week, and 113 will be history.

Piper Jaffray? Sure. Their channel checks may be justified. They probably unloaded more RIMM onto the market than any other institution. But they released their news after the market had opened, right into the high at 124, if they truly did sell today. The fact that the checks were done strictly in the U.S. is an easy way for PJ to justify the lower target price (from 137 to 134). In two weeks from now, will we hear from PJ that European channel checks were fantastic? Or that sales in China are booming? That the price target is back up to 137? Wouldn't surprise me.

Again, no matter what the mood, technicals win out. Technically, nobody should've been buying RIMM this morning. However, 112-113 is where the 50-day simple moving average is. RIMM was a buy, by my book, in the final hour of today's session. Becoming technically sound is a lot harder than it sounds.

Biggest lesson I have not learned: Set a tight stop-loss. In this case, a 1% stop-loss would've had me out of my RIMM swing shares at 119.30. Bearable, no pun intended. Darvas was right. Always set stop-loss no matter how giddy or optimistic the market appears.

Piper Jaffray lowers RIMM price target

Analysts. Love 'em or hate 'em, they have clout.

Piper Jaffray Sees Research in Motion (RIMM) Going To $134

Piper Jaffray lowered its price target on Research in Motion (Nasdaq: RIMM) from $137 to $134, but maintains a Neutral rating. As Piper Jaffray expects a seasonally slower February quarter, the firm also lowered Research in Motion's FY08 EPS estimates from $2.21 to $2.13 and FY09 estimates from $4.57 to $4.46.

There's more. Competition picking up. But overall, it's the lowered target price that triggered the selloff this morning. And to think that I stayed out of some swing trade, small-cap ideas to stick with my "safe" RIMM. Looks like I'll see 115 before I see 120 soon.

Doh! Getting rocked by RIMM

Summary of a buy gone wrong, or a buy that was 10 minutes too early.

4:58 am (Hawaii time)
Bot RIMM @ 120.50
As expected, RIMM bounced in pre-market to its highest level in recent days (124.50), and then sold down just before the opening bell. I didn't know when it would return to 122, but it happened real quick. Just 30 minutes into the session, RIMM is trading at 120, which makes my buy seem silly when I thought it was quite a steal after selling yesterday at 122.00.

Caution is the theme, even with Big Ben's boost. RIMM has run $23 since its recent low of 97. Ideally, I would've held my swing shares of RIMM through yesterday and sold this morning above 124, but a win was a win. At one point this morning, every stock that I watch was in the green. Now the only one in the red is RIMM.

5:00 am
RIMM is sliding under 119. Something might be very wrong here. This could turn out to be painful ... or just another buying opportunity for patient RIMM traders. I know Google is going to bid in an FCC spectrum auction. How does this affect RIMM? Not much, not now. Panic selling more than anything.

5:10 am
Woah. I could've had RIMM shares as low as 116.63. It all happened in the past 10 minutes. Now RIMM is back up to 118.60. If anything, GOOG's news this morning should be a plus. Google wants to do the software in cellphones. RIMM provides the hardware. It should be a match more than anything else. But the market currently thinks otherwise, it seems. I think it has more to do with hedgies taking profits since the run from 97, and/or MMs shaking out weak hands.

I held my swing shares from 114 to 106 last week before RIMM finally turned around. I'll be holding the swing shares here, as well.

Thursday, November 29, 2007

RIMM tempts again

Was quite tempting to pick up swing shares of RIMM in after-hours. As Big Ben delivered his speech on the side window of Kudlow's program, RIMM went from below 122 to 122+ within minutes. I did a little chasing with a buy order, but gave up after the stock went over 123. Yeah, had I snagged more shares at 122.10, I would be smiling right now. The stock closed AH trading at 123.50. But I didn't catch it and let it go. My long shares are good, but even with Big Ben's talk about the Fed remaining "flexible," RIMM is still very hot. The stock has run from a low of 96 in the past week-and-a-half.

If RIMM stays hot and runs more in pre-market, fine. But I'm expecting a bit of a selloff back to 122, possibly 121 before it takes off again. Technically, RIMM is due for a healthy pullback sooner than later, but I'm just looking for the best entry point possible for a short-term trade. Learning my lessons.

Long-term, this is not a buy at this entry point. Or is it? The MACD indicates a possible yes. But the stock is floating above all of its moving averages, which tells me no. So who wins: declining volume (bearish) or Big Ben's "flexibility"?

Selling RIMM into strength

Sold RIMM @ 122.00
Net: +7.50/share

Sold the swing-trade shares only. Still long on my original shares. Of course, the stock is now at 122.22 after I sold. It's the same thing that I read recently, that the feeling of holding a winning stock is addictive, as opposed to the feeling of actually locking in the profit. The last time I sold for a decent profit, it was RIMM. And I reacted to the price holding its ground higher than my sell price by buying back in almost immediately. That's how I wound up with RIMM at 114.50, then holding all the way down to 106+. Right now, the worst thing I probably could do is keep watching the stock by the minute. If the market rallies into Bernanke's speech (after the bell) and he ends up disappointing, it's bad news whether I get more RIMM or AAPL later or not. If he doesn't give the market confidence, the air will go out of the balloon at least until the Dec. 11 Fed meeting.

If he makes the market happy, then I might swing trade RIMM again at a higher price.

The market is flat today after a two-day record gain. DJ, Nas and S&P all fractionally in the red. Pit stop?

AAPL is up to 182.26 right now, surging in the past 20 minutes.

* Post-market review: I sold a bit early as RIMM ran to 123+. No regrets, though. Never argue with a decent profit.

Wednesday, November 28, 2007

Cramer revisits 1990

Sure, I'll admit it. Cramer was right. If I had approached the market with at least half of positions in pure trade mode instead of buy-and-hold-forever thinking, my account would be much, much healthier. When Cramer called for taking at least some profits off the table when Apple ripped its way above 140 several months ago, I scoffed.

But it wasn't holding or not trading Apple that hurt me. It was the small-cap growth monsters that ran up huge, and then fell off a cliff in the blink of an eye. I coulda, shoulda taken big profits out. I didn't. And with those painful experiences now converted into lessons, I am holding only three stocks, and more than half of my position in RIMM is for swing trading only. Instead of a portfolio of 13 stocks, it is much simpler to manage three. Much quicker and less emotional effect when I'm keeping my attention on just three stocks, and it feels much more fluid.

As of today, Cramer's thinking that we're back in 1990 and that in some ways, the market is bottoming out. Maybe. The past few weeks haven't been too painful for me. I have a lot of confidence in my Apple, RIMM and Nintendo shares, and they've held up quite well lately, even before the rally of Tuesday and today. In my mind, if the market were to crash, I wouldn't hesitate to get out completely, and that kind of thinking is absolutely necessary because we are in an atmosphere unlike any other in the past. My tendency is still to hold through downturns — I rode my swing shares of RIMM from 114 to 106 and back up to the current 121. But I'm becoming more and more comfortable with trading, as opposed to buy and hold, and I'll stay on that track until the U.S. economy regains its bearings.

And that could be years from now. More than likely, Cramer will be more right than wrong during that time.

Holding the RIMM swing shares

Came real close to selling my RIMM swing trade shares at the close of AH. The bid went to 121.80, but the momentum will carry into tomorrow's open, I believe. A stock as strong as RIMM (or AAPL) gives me enough confidence to hold on for another night. Anything less, like CROX or LULU, and I would've taken the profit without hesitation. Bernanke could upset the market tomorrow if he doesn't reiterate what Kohn implied today. The wise will have their fingers on the trigger tomorrow.

RIMM up, but for how long?

Perfect day for sleeping in, and almost a perfect day to be a sleepy swing trader. RIMM is up big for a second day in a row, currently off its intra-day high of 121.44 to 120.89. Up from 111.54 on Monday. Nice run, but there is real weakness in volume. Volume in RIMM on Monday was 30.4 million, and yesterday was 30.9 million.

Right now, with little more than 1 hour left in the session, RIMM volume is just 21 million. Sharp inclines met by prolonged declines. That's the market these days. This rally has been quick to rise and it'll be quick to die ... unless Biggs and Kass are right. The hedge and mutual funds had to cash out of their winners like Apple to offset their subprime screwups, just my little theory. And now, they need to put their cash somewhere before the end of the year. Maybe in mid-December. Maybe before New Year's Eve. Maybe yesterday and today.

I'm inclined to sell my swing shares of RIMM into this strength. It's dark enough this morning here in the islands that I could and probably should be using a lamp. The lightning storm is passing, but it's still a cool 74 degrees or so. Unless volume in RIMM picks up, I'll be selling and enjoying this weather as I work. Who needs the threat of another selloff?

Monday, November 26, 2007

RIMM up, RIMM down

So many common-sense market watchers are wary and cautious because of the breadth of losers and overall bearish tone. This would've been an opportunity to get out entirely, or at least halfway. In fact, my swing trade in RIMM went into the green (finally) today, surging to 117.57 this morning. (The stock moved on an upgrade.) However, it was about 5:30 am here in the islands at that time and I was crashed out in bed.

RIMM and AAPL eventually followed the market and lost early gains. RIMM sunk to 111+, 6 bucks off its intra-day high. AAPL kept some of its gains, one of the few stocks to remain in the green today. I'm bummed that I didn't get out of my RIMM swing trade with a $2-$3/share profit, but there will be other opportunities. Maybe it's time for me to invest in sleeping pills so that I fall asleep at 9 p.m. instead of 3 a.m. Old sleeping habits, going back to my early teens, are hard to break.

So the red alerts are out there. The market gains but can't sustain, and finishes at its day lows. Smart people are getting out. Yet, Biggs and Kass are calling for a rebound in December. Who's right? I suppose both sides are, or will be, at different times.

Friday, November 23, 2007

Chubby's at Kona Bowl

It isn't Tante's Restaurant anymore, but the Beef Tomato is humongous, tasty and filling.

Up, down, all around since August bottom

I formed a mock portfolio a few months back, not long after realizing that Aug. 16 was the bottom of the initial subprime mortage fiasco. Now, more than three months later, it's easy to see whether the current market is really doing as horribly as the media presents. So here's what I found, comparing the intra-day low of Aug. 16 versus Wedneday's closing prices.

Then versus Now

Apple: then 111, now 168, +50.9%
Amazon: then 70, now 79, +13.8%
Crocs: then 44, now 38, -12.1%
Garmin: then 86, now 91, +5.5%
Research in Motion: then 61, now 111, +80.4%
Baidu: then 161, now 307, +91.2%
CNOOC: then 92, now 159, +71.9%
Chipotle Mexican Grill: then 92, now 123, +34.1%
Flowserve: then 62, now 90, +45.6%
Google: then 480, now 660, +37.5%
Blue Nile: then 71, now 74, +4.4%
Nintendo: then 52, now 69, +33.9%
Under Armor: then 54, now 46, -14.1%

As a whole, with an evenly weighted investment in each of these stocks, they would be 34.1% in the positive. Even with the horrendous selloff of the past two weeks, 34% up isn't bad at all for three months of holding. Doesn't mean I'm going to return to a buy-and-never-sell practice, but the numbers appear to be more healthy than I had imagined. Far more.

Tuesday, November 20, 2007

Good Pupule, Bad Pupule

My day started a bit frazzled, but even with my on-hand technology mired in mud, I managed to do the previously unthinkable: trade with discipline. Yep, got out of RIMM with a profit of more than 5 bucks per share. Then I did the truly unthinkable. I went against discipline, bought back more RIMM at high levels — 114.50 — and watched it sink, sink and sink.

Instead of selling at 114 or 113.50, I held, ignoring the fact that the stock had run from 97+ to 115+ in a matter of a few days. I gave up the thought of selling at around 111, simply because this is one of only four stocks that I believe will withstand the mightiest bear market, if it comes to that. So RIMM sank to 106, rallied back to 111 before the close, and finished at 110. In after-hours trading, it is creeping toward 112.

All in all, my good trade early was offset by an absolutely buffoonish trade that is still alive going into tomorrow's market. Good and bad, in one day. Those of you who rode RIMM early from 109 to 115, and late from 106 to 111 get a tip of the hat from me. I give myself a chorus of boos for undisciplined trading.

A small win in RIMM

Sold RIMM @ 113.90
Net: +5.20/share
Got up at 3:10 am (no alarm), fell asleep, had a really strange dream, got up at 5 am. That's 30 minutes after the open. Ugh. Then the laptop was slow, and eventually I restarted it. All that cost me a point or so since RIMM hit a high of 115.50 in the first half hour. But a win is a win, small or large. Of course, the stock ran back up to 114.66 a minute after my sell. Must have emotional distance.

Long-term shares still going strong.

Monday, November 19, 2007

Wild ride for RIMM

Entered a short-term position in RIMM at 108.70. Not the best entry point, and it came after the stock ran from below 104.65 to 109.74 after 2 pm Eastern time. Had my chance to sell at 109.69, but I got too optimistic instead of setting a stop loss to collect a small profit or break even. Quite a roller-coaster ride after that, and the stock sank to 106.27 in the final half hour before rallying to 108.02 at the close.

Considering the market was down (Nasdaq -43, -1.66%; DJ -218, -1.66%), my long-term shares in RIMM did fine by finishing in the green.

Apple was negative, down more than $2 to 164.05 at the close. AAPL actually hit a low of 162.10 intra-day. Nintendo was also down significantly today. Last bid was below 66.

Friday, November 16, 2007

RIMM battles back

The better daytrade was in Research in Motion, which had been crushed, devoured, brutalized, murderized, annihilated and pulverized by the institutional sellers for an eternity. The stock was already below its 50-day simple moving average before the market opened today, then dropped from 103 to 96.80. Then came the comeback.

The last time RIMM dipped beneath its 50-day SMA, three days of huge gains followed. Since we're not in Fed-cut mode anymore, this will be interesting to watch next week. I'm still long RIMM, but I felt more comfortable daytrading AAPL. That may change on Monday. Or not.

Good Apple for the day

Sold AAPL @ 166.75
Net +2.86/share
The strangest feeling, clicking the sell button on a stock with momentum just two minutes before the close of after-hours trading. My web browser stalled up, a rarity, and I shut it down. When I came back to my online broker, the sale had executed. What Jason Zweig said recently about the psychology of selling stocks is true. I'm like a lot of people, apparently, who are more comfortable with the feeling of holding a winning stock rather than locking in those winning profits (rRe: CROX, STV, LULU, etc.).

Though I had a sell price of 170 on my AAPL daytrade shares, I returned to discipline mantra: not to make decisions, but rather to follow rules and procedures and to act in accordance with policy. That means selling the daytrade shares. I could have rationalized that the trade isn't done, it could become a swing trade going into Monday morning. But the volatility of this week, so many down days, has me wary. I'd love to believe that the correction is done, but I can't. I think the market remains in erratic mode for awhile. Therefore, I will continue to daytrade a half-position in AAPL. If I can get nearly +$3/share as I did today with one trade, I'll be content.

If AAPL opens at 167 or 170 on Monday, so be it. Everything will depend on the market, on news. But if AAPL opens below 166 and the market is neutral, I'll look for a re-entry point.

X Factor: Volume was lower today and did not surpass volume of the previous six sessions. Not an overwhelming indication that Apple's rally will fizzle, but bullish either.

One-day chart below. I like, but has the one-day chart. I slept through the big run. I actually remember falling asleep as AAPL began to bounce of its low of 159. Told myself not to bottom-fish just yet. It was about 5:30 am Hawaii time. By the time I got up, it was after 7 am (noon Eastern) and the stock had already run to 167. Amazing. But I like the entry point AAPL gave me later at 163.89.

Sorry for the sloppy lines. I don't have a mouse, nor a pen thingie for the laptop.

170 is a longshot for today, but ...

... you never know! I put in a sell (AH) for the Apple daytrade shares at 170. AAPL closed the session at 166.32, huge move in the final 20 minutes from 164. I would like to hold the shares into Monday, but I put in the AH sell as a hedge in case it runs even more here. If it does somehow go to 170, I would expect a cheaper entry point sometime on Monday. I tend to think AAPL and RIMM will bounce big on Monday now that OE is over, but history shows that the Monday after OE is not a guarantee of a up market. If I get the sell at 170, no complaints or whining whatsoever with a $6 plus profit/share.

If AAPL doesn't hit 170 AH, I'm content to hold.

An Apple a day ...

Bot AAPL @ 163.89
Daytrade only. AAPL earlier dropped to 159.33 and ran to 166.74, but a) I didn't want to risk a return to the downtrend, and b) I slept through most of it. At 163, almost half the gain from the low has been given back. The stock is down 42¢, hovering at 163.90. The market is up (DJ +53/0.41%, Nas +8/0.31%) for now, could be a selloff toward the close because of OE.

This is like watching your brother, who was stuck on a deserted island for a week, finally get some water and food to eat. He gorges on all the chicken he can for an hour, then pukes it all out and nearly passes out. Now he's somewhat alert again, and he's eating again, but a bit more slowly.

Eat, Apple, eat.

Still have my long-term position, too.

Thursday, November 15, 2007

Juicy red Apples

Apple is resistant to many strains of virus, but it can't avoid the very market it lives in, sells in and once thrived in. 150 is a key level of support now, where it once was was major resistance (late July, early September). I really have no intention of selling my shares, but I do have thoughts of daytrading a partial position. The volatility is almost perfect, or at least it was today.

Google-icious temptation

For someone who has never owned a share of Google, yet uses it every day, I am probably a hypocrite. In fact, I've been using Google for years, probably since 2001 or so. This blog is provided by, which is owned by Google. I use gmail. But I cannot enter Google stock just yet.

Volume in GOOG has been declining through the selloff, which is a good sign. But the waiting is the hardest part, as Tom Petty used to say. Tom Petty? Google him. The guy has rocked for decades now.

Google will lead the rally back. So will Apple. But patience is key here. The market needs a spark from the Fed first.

VMware is oversold, but I am allergic

One of the few bright spots of this ridiculous selloff is that I sold a bunch of my portfolio off before they were in the red. One of them was VMware, which I bought at 97 and sold at 102. I held through the run-up and the decline, but I didn't lose money. That is good. VMW is begging to be bought here, but I'll stay on the sidelines until the sun comes up one of these weeks.

Unlike RIMM, volume has declined in VMW's selloff. Good news, but still way too riksy here.

When will the RIMM slaughter end?

The institutions are still unloading their RIMM, I believe, which is why volume is still very high. The selloff has been merciless, but the big boys want their profits to offset their subprime disaster. I should've gotten out of RIMM yesterday at the same time I got out of Baidu. Belief in a company should never be married to (personal) business decisions.

Schitzo Apple worth the daytrade?

Hindsight can be so deceptive, but there's something going on in Apple.
• At the open, AAPL got as low as 165.24. Within 15 minutes, ran to 169.75.
• Sank to 165.46 at 10:00 am EST. Went back up to 168.42 by 10:10 am and clung to the 168 handle for several minutes.

More interesting low and high points during the day:
• 166.88 at 10:32 am. 169.59 at 11:18 am.
• 164.60 at 12:45 pm. 167.55 at 1:14 pm.
• 160.30 at 3:07 pm. 164.03 at 3:23 pm.
• 160.80 at 3:40 pm. 164.30 at 4:00 pm close.

All right, only Nostradamus would have nailed all of these low buy points and high sell points. He's dead. But by the third intra-day move by AAPL, I was convinced that this is the one stock worth daytrading. The volatility may not always be like this, but for now, there are worse things than being "stuck" with Apple stock at 160.

Daytrading Apple is not something I ever envisioned. I may never do it. But the first bite may lead to a profitable practice.

RIMM under siege

Yep, no bounce in one of my A+ picks, not today, not tomorrow, but maybe on Monday. I'm out (at 104.60) of the short-term position I added today. Still long in RIMM with my older shares.

The RIMM conundrum

Depending on who you believe, a great company like Research in Motion is simply back to a more realistic valuation or is being held hostage by institutions. RIMM hit a mid-day low of 104.49 today, far off its all-time high of 133 on Nov. 7. The high was more than a double from its Aug. 16 low of 61. Gray-area watchers would place RIMM's value somewhere in-between, which is why 104, or the current 105.81 (11:30 am EST) seems fair in some respects.

But even at 105, RIMM is 21% off its high. RIMM has all the earmarks of a great growth stock. But if it's true that at least one instiution is still unloading stocks to pay its investors, it seems obvious that RIMM is one of those stocks. While Apple (+1.1%), Baidu (+0.5%) and solar stocks like First Solar (+3.3%) are holding their ground today, RIMM is down 4% on no news.

I scooped up more shares of RIMM at 105.50 today, but there seems to be no sustainable momentum against the trend. But when the dumping is done, I expect a whole lot of buying on RIMM at these relatively cheap prices. My guess is Monday morning.

Wednesday, November 14, 2007

Slimy shorts and false advertising

As former lululemon athletica long, I'm a bit embarassed to say I didn't even know the company made products that contained seaweed. Or claimed to, anyway. The New York Times article (Wednesday) makes the company look like a group of flakes, but frankly, all of this stuff will go away if and when LULU blows away earnings estimates in a few weeks.

I hope they do. The Times was alerted to this seaweed fabrication (pun intended) by a short seller. How slimy is that?

Impuse to flee

Got out of Baidu with the market so skittish. I keep sleeping through the open (4:30 am Hawaii time), and that hurt me today. Everything was up big at the open, then sold down through the day. BIDU was up 28 to 369, my break-even point, at the beginning of the session. By the time I woke up, BIDU was down to 350. Then it slid and slid. My mental stop-loss was 344 (7% off today's high), but I held on and then sold at 337. Of course, the stock rallied a bit to 344 at the close.

Another factor in my BIDU sell was John Najarian saying that he believes there is one more major selloff ahead because a major institution is still unloading and will do so on the next drop. Najarian is astute, no reason to doubt him.

Apple killed me today. Apple opened up from 170 to 177, then slid. At 166, I'm was ready to sell, but I remembered my oath to never sell Apple shares again and held on. RIMM was at 118 early before sliding like the rest. At one point, by my math, my account was up more than 10% (at each stock's high). Sure I can't pick the top, but had I sold near the top, that's a 7 or 8% profit instead of finishing in the red for the day.

I fret because of this margin call, small as it is. I thought today would be up and I'd chip away at that debt. Instead, I lost money (on paper). I'll be content to get out of this market. Too wacky. Still have AAPL, RIMM and NTDOY.

Tuesday, November 13, 2007

Approaching valleys and dips

Because they will happen. On the next major dip, this formula will be preferred:

Major selloff: Projected re-entry points/percentage of position(s)
Possible reversal, Day 1: 10%
Possible reversal, Day 2: 20%
Possible reversal, Day 3: 30%
Possible reversal, Day 4: 40%

The translation in terms of Apple during the recent selloff (and 19.8% dip from its high of 191):
Day 1: 10% at 175 (closing price) (Thur Nov 8)
Day 2: 20% at 165 (Fri Nov 9)
Day 3: 30% at 153 (Mon Nov 12)
Day 4: 40% at 160 (on the open of rally day) (Tue Nov 13)
Apple closed today (Day 4) at 169.

This would be known in some circles as a version of a Pyramid approach to buying on the dip. Apply stop-loss marks as desired.

Of course, the best approach is to buy and hold a great stock and quit sniffing at the minute-by-minute fluctuations. And best to enter after the storm has passed. Today's opening price at 160 was just fine for those who wisely waited.

Swoons and a margin call

Today, finally, is a good day in the green, up 10% or so. In the meantime, I sold my itty-bitty positions in McDonald's and Under Armor today. I bought these stocks a few months back for my 11-year-old nephew as a way to show him how buying what you know is a good thing, and he's bullish on both, especially Under Armor. Well, UA was obviously horrible, sinking from the 61-65 levels I bought it at. The bloated P/E was a real indicator of where the Co was as a retail stock, plus the huge insider selling was blatantly arrogant. McDonald's on the other hand is a fine Co and I'll be buying that back for my nephew in the near future, long before UA. I'm not anti-UA. I just see major bloating, and the market crushed the stock.

The sales were key for me because of (I saw today) a small margin call. I could have avoided this problem if I had

a. Sold my CROX, LULU and STV (and other stocks) at or near the top
b. Avoided buying speculative stocks like LFT (an IPO)
c. Avoided buying more BIDU and AAPL on the way down

I could've waited and bought BIDU and AAPL earlier today when the market rebounded from the horrendous 5-day slide. I will stay on top of this margin call, of course. Took 20 minutes to get through to someone on the phone at E*Trade, but he said that it's possible that if my account continues to rise before Thursday's margin call deadline, they may not require me to sell any shares. "It's a mystery," Jeff said.

Hmm. Well, I sold the MCD and UA shares today, which could help if the funds settle quickly. You know, if I were a genius and sold near the top before the recent crash, I'd have an account worth about twice what it is today ... and today's session would've been a buying spree to da max. Instead, my account is just getting back to 60% of what it was at its top. Moral of the story: It's a trader's market. I am fully aware of this now. No longer in denial.

When the next dip begins, I'll sell 50 to 75% of my stuff, even AAPL. Then I won't dread looking at my account or at the market action next time. Yesterday (Monday) I didn't even look at my account. First time in a long, long time. Even today, I haven't activated my MarketTrader tool to watch trading in real time. It was good. I had no buying power anyway. But what I must always remember, however, is that I always have selling power.

I have always been faithful to the point of blind faith. Back in the day, when we were 13-year-old comic book collectors, it was me and Peter who loved to read the comics and learned to appreciate great stories. It was Jae who paid superficial attention to the content and really, really knew how to hustle other kids — especially the younger ones enamored with flashy cover art and infamous superhero names like X-Men and Frank Miller's Daredevil — to buy his comics. He was a GREAT salesman who knew what appealed to the masses. He'd have the same comics on the same table as Peter. Jae would have a higher price, but his loud, busy mouth and great salesmanship got him the big profits. He would sell sell sell and make money.

I hold and lose huge profits. The concept of selling, somewhere in my subconscious, is probably that it's a form of "giving up," which is absolutely preposterous. I'm learning to sell to avoid losses, which I did with many stocks in the past month. But the concept of selling to LOCK IN profits is still novel, and I must embrace it.

I realize that my honesty here can and probably will open me up to criticism, but I'm the first to admit that knowledge is key, and I intend to learn from my mistakes, to learn how to sell. It's psychology, not so much the mechanics — a 7% stop-loss is sensible to me. What's crucial now is to overcome the losing mindset, the denial that any stock is going lower ... and lower ... and lower. Hitting that sell button is equally as important as investing long term, if not more. I plan to do both.

Monday, November 12, 2007

Why is Pupule eventually optimistic?

Because eventually the hedge funds and mutual funds have a bottom line. They must make money for their masters. Until Google and Apple and RIMM and all of the world's most productive companies cease to be profitable, the big boys will have to get back into the market, sooner or later. They're stampeding out now, but soon enough, they will stampede back in.

The question is, when?

19.8% of rotten Apples — again

Well, I didn't want to see it happen, but Apple is replicating its August dip.

Percentage-wise, the stock is now at a point that matches its August fall. Between late July and August 16, AAPL went from 146 to 117, bottoming out with the rest of the subprime mortgage sludge at a 19.8% drop. This month, AAPL has collapsed from 191 to today's low of 153, a fall of 19.8%.

Back in August, the stock spent six sessions below its 200-day simple moving average before bouncing back up. In all, AAPL traded below its 200-day SMA for nine trading days. Today, AAPL went below its current 200-day SMA for the first time.

In the summer, AAPL took 14 sessions to drop from 146 to 117. This time, AAPL has gone from its new high to today's 153 in just four sessions, eliminating six weeks worth of gains.

Though the RSI is now at 33, virtually the same as it was on Aug. 16 — the bottom of the summer swoon — I'm not optimistic yet. When AAPL's stock rallied after the August swoon, the 10- and 50-day SMAs already crossed over (on Aug. 15). Right now, AAPL's 10- and 50-day SMAs are nowhere near crossing over. Yet.

In addition, volume to the downside increased today from Friday. Though the stock was up a few dollars to 167, it slipped badly and hit an intra-day low of 150. The increased volume, though, is astounding. Not a good sign for Apple bulls.

A trader's market, indeed.

(Note: corrects the SMA info from 200-day to 50-day.)

Friday, November 9, 2007

VMware ahead of the game

VMware is the main player in its sector of virtualization. Dell, Microsoft ... they're behind the 8-ball and can't really buy their way into VMware's position. But a double in less than three months will prompt any self-respecting capitalist to take profits in a spooky market. Heck, it was more than a double. The stock closed the week at 87, below both its 10- and 50-day simple moving averages. VMW has pulled back 30.4% from its all-time high, astounding ... except when compared to its 150% gain from Day 1 (50) on the market to its all-time high (125).

So, is VMware a buy here?

Abstaining from eye candy

Crocs. lululemon athletica. Those are just two of the sugar-loaded treats that could beckon people like me who like the products and growth. But like any cavity-creating demon, these stocks are capable of striking the nerves quickly and causing massive pain both in the head and in the wallet.

As much as I saw tremendous gains in smaller cap retail like Crocs and lululemon over the past few months (gains that I never capitalized on!), retail is dead to me. Companies are fine, but the stocks will not move very far. Crocs had a nice bounce today after being oversold into the mid 30s. But for the stock to go beyond the 40s will take a number of catalysts. The one good piece of news for the stock is that the "underpromise/overdeliver" mantra is in place. A patient CROX shareholder will be rewarded. I'm not one of them, though.

All the insider selling that followed guidance raising should've been yellow flags for loyal longs, which I once was. Sure, it wasn't just that the board was making mucho bucks. Anyone who invested in CROX early had every opportunity to cash out big. But in hindsight, the insider sales were the tip of the iceberg, the one that cracked at the slightest bit of warning and warming.

And this is a company that has huge revenues. The other growth toddlers like China Digital TV, Longtop Financial, etc. haven't even proven their worth yet. For now, I'm interested in riding the real powerhouses when the rally arrives. If the market can stabilize with a bullish trend, maybe then I'll explore the mid- and small-cap growth stocks. But I'm not assuming that will happen, and even if it does, I'm all about quick profit-taking. Watching paper profits evaporate has a way of leaving an impression.

Who will lead the rally?

Bulls say Apples, bears say oranges.

Is this a buy now?

I added a few more shares at 165.70 just before the close.

Just a thought: Apple shares hit a then-high of 148 on July 26 before pulling back to 119 intra-day on Aug. 16, the darkest day of the subprime sludge. That slide of 19.6% was astounding, though nothing like the pullback of the year before. In July of 2006, Apple had corrected from the 80s to the low 50s, a drop of nearly 40%.

Things are a bit different now for Apple, which is riding the wave of 1) iPhone, 2) iTouch, 3) substantial growth with Macs, 4) global growth. If we get a similar, 19.6% slide like the one over the summer, AAPL will drop from its recent high of 192 to 154. A big if. I think it could happen. The Fed is out of rate cuts for the short term. Financials are slow to be forthcoming about the severeity of their mortgage nightmares. Apple at 154 is only 6.7% away. For now, though, I'm content with today's buy at 165, and even yesterday's premature buy at 175. Not overly happy, not overly upset.

Thursday, November 8, 2007

Google at a discount price?

Calling all Googleheads and wanna-be Google owners . . .

Is this a buy?

Too early, but Apple & RIMM will be right

Here I am rushing to get AH orders in ... and only afterward do I remember that the East Coast is only 5 hours away. Not 6. AH market closes at 3 pm Hawaii time.

RIMM bot @ 124.67
AAPL bot @ 175.95

I'd have bought more but that's the max. I was gone during the last hour of the session, when the markets rallied and cut losses significantly. Apple's intraday low was 167.77 — 13% off its recent high of 192. RIMM's intraday low was 115.88 — 13% off its recent high. Craziness. Wish I could've seen it and added more shares cheaper, but I was at another meeting. Actually, I could've plugged in the laptop and watched during the meeting, but that would've been a little rude. I did turn the laptop on, but only later.

Apple at 175 is trading right in the middle, a short-term sweet spot below its 10-day SMA (186) and above its 50-day SMA (160). Does the market tank further tomorrow, more than likely on a Friday? Possibly. But Apple is one stock I trust when it comes to fundamentals and technicals at this point. If the market dips one more time, I'll bite the bullet and look forward to future fruitful times from my favorite growth stock.

RIMM fell big, like AAPL, but really had further to fall than Apple. Even now, at 124.50 (after hours), it is just a hair beneath its 10-day SMA (125.31). Still would have liked to have bought more RIMM here ... a good sign for shorts. Not kidding.

I almost went back into YGE, which I sold earlier today at a fractional loss. The stock closed up at 35.20, a penny ahead of my latest entry point. I just think that the solars are going to fizzle out sooner than later, and Yingli will peter out, too, even before it had a serious run. I'd love to daytrade YGE for the 2 points between 35 and 37, but if solars go limp tomorrow, I'd rather have my hard-earned money in A+ monsters like Apple and RIMM.

It's just as well that I bought now instead of later. I have to get on the road, pick up my nephew, get some work done, la-dee-da. But first, Starbucks, here I come.

Sucker punched

Yep, the market is tanking big time, no thanks to the ever consistent Big Ben. I got out of Yingli at 34.41. Sold at a loss of $0.78/share. The market is very ugly right now; NAS is down 78 points (2.9%). Even Apple is down big, and Baidu has cratered to 360. After I sold, YGE recovered a bit to 34.60. However, I refuse to take a bigger loss.

Three times this week, including this morning, YGE went from 35 to 37. I would've made a nice 2 points each time had I sold at 37. Lesson learned. See a pattern, trade the pattern. Would've made me a nice profit had I acted on the pattern and sold the second and third times. I had my chances. YGE just sat there above 37 without moving despite a robust earnings report this morning. I should've taken the profit.

The only stocks in the green today are the solars. First Solar to the moon, was up $60 at one time to 230, and is now holding very strong at 215.

Wednesday, November 7, 2007

Suckage wasn't as bad as I thought

I manage to beat myself down pretty good when a trade goes sour. But looking over my mistakes, I can feel a little better about recent sells. No, I didn't sell at the right price or time. That's listed for the record in my full disclosure (at right). But these stocks that I recently got out of have dipped even lower since.

Amazon (AMZN) • sold @ 90.11 • currently 86.01 (after hours)

China Mobile (CHL) • sold @ 87.54 • currently 86.49

Crocs (CROX) • sold @ 41.70 • currently 40.76

Garmin (GRMN) • sold @ 117.20 • currently 89.00

Longtop Financial (LFT) • sold @ 25.90 • currently 23.19

lululemon athletica (LULU) • sold @ 43.70 • currently 41.00

Blue Nile (NILE) • sold @ 81.25 • currently 80.70

China Digital TV (STV) • sold @ 37, 39 • currently 35.24

VMware (VMW) • sold @ 102.72 • currently 99.80

Yingli Green Energy (YGE) • sold @ 34.85 • currently 36.00

I bought back only into one of these stocks: YGE. Other than that, I'm more than happy to wait out this storm. VMware and China Mobile are the most attractive of the rest.

Schizo action in YGE

The stock closed the day at 34.80, slightly down with earnings out tomorrow morning. Then, First Solar announced blowout earnings, went from 169 to 188 in after hours. Came down to 185, then zoomed to 207.

In the meantime, YGE went up, up, up to 37.60 in sympathy to FSLR. But as soon as FSLR hit 207, it went down to 203, and that's when YGE collapsed to 34. What gives? Total manipulation by the market makers? I'm just glad I didn't add more shares at 35 or 36 after hours. I gave up thinking about chasing when YGE hit 37.

If someone suddenly found out something about the earnings report and then unloaded shares, it wouldn't be a first. It would just piss me off.

This is the second time this week YGE has run from 34+ to 37 before pulling back to 34+. I don't feel good going into tomorrow's earnings report. It's my old superstition about announcements and the day of the week. A bullish report is usually out on a Monday or Tuesday. A bearish report is out on a Wednesday or Thursday. Crocs announced after the bell on Halloween, a Wednesday. Sunk like a rock. Baidu announced on a Monday. Initial selloff, then the huge run to 400+ began.

Yingli ... I have my superstitions, but I'll stand my ground and hold. Damn schizo stock.

Out of VMware for now

Stock dipped to 102, a major selloff from yesterday's close at 110. I got out at 102.72. The Dell news has spooked off a lot of VMW longs, or rather, short-term holders. I'll look for a new entry point when the selloff is done.

Welp, here it comes. VMW is back up to 103.73 now. Figures. But I wasn't about to sit there and see a profit turn into a potential loss. Not going to complain about a $6 gain/share. When the sentiment in the stock turns, I'll re-enter with another small position.

Bargain hunting in a nervous market

What is great? What is cheap? Phil Town did it his way, the way he learned from a mentor: buy great companies on the cheap. Of course, we all have different definitions of "great," but we probably can agree on cheap. For me, a bargain has less to do with P/E and more to do with discount, particularly of a growth stock. So, with those notions in mind, here's a look at what's on sale. Or not.

Apple 191.79
On paper: Back in the 90s, 120s and 130s, the stock had longs feeling impatient. After all, when AAPL hit an all-time high of 85, it promptly sunk into the 50s and took 10 months to return to the 80s. That's one hell of a wait. But since breaking out of the 90s with initial news of the newfangled iPhone, the stock has been on a tear. A double in six months is something magnificent. The stock has traded above its 10-day moving averages almost all the time since August.
The skinny: holiday season is upon us, but it is still more than two months until the next earnings report. Can AAPL continue to ramp up without news?
Of course, the best and simplest approach is to buy and hold. My faux buy-Apple-only (monthly) portfolio is nothing but green, green, green.
Pupule says: As much as I love the company and the products, I will wait.

Google 741.79
On paper: Screw paper. This is a "holy shit" stock and has been since mid-September, when GOOG traded at 520. The stock is well above its 10-day moving averages. There is not much to be said for a stock that has traded up nearly every day for two months. The news keeps coming out, good, great and peerless.
The skinny: The good news won't be endless, and there will be a pullback sooner or later. Then again, this stock sat at 460-500 for such a long time that those of us who passed on GOOG (me) deserve to suffer as fans on the sidelines.
Pupule says: Wait. Do not chase.

Intuitive Surgical 317.07
On paper: This was below 140 three months ago. Holy crud. The stock is trading below its 10-day SMA (320.79), but above its 10-day EMA (311.38).
The skinny: Cramer helped move the stock with his "buy-buy-buy!" directive a couple of weeks ago. Until major buying volume returns, ISRG is too hot to handle.
Pupule says: Wait.

Research in Motion 131.64
On paper: Upgrades and hype, like Citigroup's new label as the "best stock of 2008" don't hurt. The stock is far above its moving averages.
The skinny: RIMM is one of the very few stocks I feel comfortable viewing as a long-term hold. It is also a stock that moves in boxes (re: Nicolas Darvas), which makes it attractive as a trading vehicle.
Pupule says: Until there is a kryptonite for RIMM, it is almost a "can't lose" stock. Still, best to wait until it comes down below its moving averages, hopefully some time in this decade.

Baidu 407.70
On paper: Far above its moving averages. Frothy.
The skinny: No news to lift it any further. BIDU has gone straight up from 310 to 430 (Tuesday) without a breather.
Pupule says: Wait, wait, wait.

China Life Insurance 92.98
On paper: The China selloff hit LFC in a nice way. At 92, it is trading at the same levels it did at the end of September. A bargain? Relatively, yes, for a stock that has doubled in six months. Trades well below its 10-day EMA (95.78) and SMA (97.16).
The skinny: I always thought of LFC as a "safe" play but had no idea it would explode. All of the more sedate sectors seem to explode in China thanks to the influx of new arrivals to the growing middle class. Family-oriented societies are going to invest in life insurance, no ifs, ands or buts.
Pupule says: A fair buy here. Still down 13% from it's all-time high.

China Mobile 92.06
On paper: stock hit 104 on Oct. 29, more than double since Aug. 16. The recent selloff brought the stock below 90, and it had a moderate comeback on Tuesday to 92. Still below its 10-day averages (EMA 95.26, SMA 98.01). Nowhere close to its 50-day EMA (83.78) and SMA (81.96).
The skinny: The stock has bounced off every gap down since the August low.
Pupule says: Yeah, I got out at 87 the other day, but this a classic red chip stock on sale — 16% off its high. Buy.

Chipotle Mexican Grill 131.88
On paper: CMG is down from its all-time high of 141, now touching its 10-day EMA (131.71) and under its 10-day SMA (132.31).
The skinny: The stock has run to two new highs in the past month, but volume really kicked up on the second leg up. Is there another leg left? Dunno.
Pupule says: Wait. Yesterday's volume was very weak, and it's a big if whether there are still more buyers out there than sellers.

CNOOC Ltd. 190.03
On paper: After hitting 218 on Halloween, CEO has sold off and now trades below its 10-day moving averages.
The skinny: Crude is at its all-time highs, which means the weakness in the stock right now is not a happy signal. After doubling in less than three months, the stock could be in for a long stretch of consolidation.
Pupule says: I loved this stock in the 90s, but didn't have the foresight to buy at a P/E of 11. Anyone with insights about this stock, please chime in.

PetroChina 229.42
On paper: Like CNOOC, PetroChina has tumbled as quickly as it spiked. After running from 190 to 266 in just five sessions (mid-October), PTR went stagnant, then dropped on Monday. It trades below its 10-day moving averages (EMA 239, SMA 244).
The skinny: Do you trust a state-owned sector leader that is charged with geopolitical undercurrents? If so, then this is your cup of tea.
Pupule says: The price screams buy. Buying PTR and/or CEO almost feels (I imagine) like buying a piece of the mob. They won't be defeated, and you'll never really get a clean look at their books. I'm not picky that way. I wish I'd been long PTR and CEO all along.

VMware 110.04
On paper: After debuting at 50 in mid-August, the stock has risen as high as 150%. VMW is down 12% from its high of 125, now below its 10-day EMA (112.89). Four down days in a row with shrinking volume is a good sign for longs.
The skinny: Virtualization. Dominance. Most likely to succeed? Probably.
Pupule says: For VMW groupies, this is clearly a buy. For bargain hunters, worth waiting more. At 110, the stock is at a pivotal point. Market gyrations could give us a cheaper price. Those of us who pass on VMW will be lamenting our ineptitude when it hits 300 in one year. Just my little guesstimate.

Tuesday, November 6, 2007

Dozing through profit opportunities

Baidu, Baidu, Baidu. I have confidence that BIDU will return to 427. Maybe not tomorrow or this week, but I'll hold for now. Goes to show that technicals are still important even with a momo stock. BIDU had been up seven days in a row when I bought a little more this morning. The stock closed after-hours trading at 405. Boo. Bad trading.

Yingli wasn't so bad. In fact, YGE was up more than $2 to 37+ and I could've sold for a little profit if it hadn't been 6 a.m. and if I hadn't been flat-out asleep. Yingi pulled back to 35+ by the close. No complaints here. But looking over at Suntech Power (STP) and its 12% move today, I wonder why I like Yingli so much instead of the Chinese solar leader.

Apple closed strong today, up more than 3% to 192. Very nice. One of the faux portfolios I keep is nothing but Apple based on monthly buys regardless of price. It's amazing sight to behold, so much green lighting up the screen. The pruning I did yesterday has me thinking more and more about sticking with a handful of stocks, maybe even just three or so. Three great companies.

Those wouldn't be YGE or STP though. Not yet. Formative years, strictly trade material. I need to stock up on Monster energy drinks. Maybe then I'll see the light. Get it? Solar stocks. Light. Boo...

More Baidu

Added a little more Baidu at 427. First time I'm really watching its ticker. Amazing liquidity, volatility. 428 one minute, 426 the next. Baidu is frothy, far above its moving averages, already up more than 2% ($9) today. I'm playing this with the IPO since Baidu has announced C2C auctioning recently. I'm also playing this with Google, which got upgraded to 850.

YGE is up to 36.50, which is positive. Make that 36.64. Crude is up $2 today, plus a bombing near Yemen. The oil situation was on my mind yesterday, and I wanted PTR at 222, but it was late and my broker stopped taking PTR orders (I don't know why) in the final 5 minutes. PTR was up to 228 in pre-market, but is back down to 222.

Monday, November 5, 2007

Like the Chinese solar play

Got a sizeable position in Yingli Green Energy (YGE) before the bell at 35.19. Wanted shares of PTR, but my broker kept telling me that the market was closed ... five minutes before the market actually closed. Unless CNBC is airing on a 5-minute delay, I'm not sure what that was about.

CEO and PTR were more favorable as far as moving averages go, but YGE is a stock I am positive on in several ways. In addition, Yingli got a boost today from a "Buy" rating by a boutique investment house. The first of many to come.

Is Chinese energy in play?

Worth examining?

CEO 190, -8% for the day, down 13% from its all-time high (218). Trading below its 10-day SMA (200).
PTR 222, -13% for the day, down 16.5% from its all-time high (266). Trading below its 10-day SMA (249).
YGE 35.50, -2.3% for the day, down 9.5% from its all-time high (39.20). Trading slightly above its 10-day SMA (34.40).
STP 56.61, -0.7% for the day, down 9% from its all-time high (62.18). Trading above its 10-day SMA (55.56).

Pruning the barren pupule tree

Sold CHL (loss of $7/share), LULU (gain of $2/share) and YGE (even). Just too much unpredictability and negativity to hold these babies, even with small positions. I'm not going to wait for these stocks to bleed to death. YGE is actually hanging tough, and had been early in the day. But I will stay out of these. I'm still holding BIDU, MCD, NTDOY, UA, RIMM, AAPL and VMW. MCD and UA are for my nephew.

There's no doubt in my mind. With the Fed out of rate cuts and the US economy slowing, our market is bearish and getting more so by the day. Companies like Crocs and Under Armor are raising guidance and getting pummeled. The only stocks seemingly resistant to all of the financials (Citigroup) and housing subprime crap and economic slowdown today are Google and Baidu. Blue Nile, which reports tomorrow, is up 3.1%. McDonald's is up fractionally.

Other than that, I'm just relieved to prune those stocks out of my folio. When the market turns, I'll be back in.

Crocs takes a bite out of my stubborn pride

What was once my pride and joy has turned into a fucking strikeout to the nth degree. I should've sold a chunk with profits, but I never envisioned this as a trade. I was married to this stock, breaking Rule #1. I sold so that I could avoid even more losses. The stock was in the mid-40s before today, then cost me a few hundred more dollars today in a slightly down market. It's Cramer's effect, telling everyone to get out, plus the fact that the Co has done little to impact the downtrend.

My portfolio gain is practically gone. But there's some relief in being out. I was once up 70% on this stock. Then I made the foolish move of doubling my position the day of earnings, and then poof! The stock cratered and I wouldn't sell, thinking it was a temporary overreaction. Today, I am forced to sell at a 30% loss. The notion of waiting it out is impossible at this point, not the way the stock keeps falling off one cliff and then another. It is impossible, at this point to fight the trend, to fend off the shorts and bears who hate this stock like no other, really.

All growth stocks trade with volatility, and the worst thing that can happen with taking big profits is that you make money. The best thing is that you can re-enter on dips. I am now at the point where I am going to trade/take profits in everything I every buy from this point. The only stocks I might leave a half-position long in are Apple and RIMM. Maybe. This was a costly lesson. My position was small, so it didn't break me, but it's still painful, a blow to my ego. That's a good thing.

Even Cramer warned people to avoid buying/trading on earnings. It was almost as if he was telling me don't buy more CROX, fool. This is another case where my personality traits work against me as an investor. I have patience. I have a high threshold of pain. I also have enough arrogance to imagine that my conclusion about a great stock will always trump anything the market brings. The truth is, it is still emotion that stunts my growth when it comes to making money in the market. Otherwise, I would be entirely mathematical about my profits and take then on every 7% (or 5% or 3%) decline. All my stubborness about holding stocks for a year to lower taxes is meaningless. CROX is a perfect example.

Just a week ago, CROX was near 75. Had I been prudent and put in a 7% stop loss, I would've stopped out at about 69.75 ... or actually, much less because the stock started tanking before the earnings report ,,, somewhere around 60, which is what I remember in the moments of the earnings report. It doesn't matter if there's major manipulation going on by the big boys. Can't fight it, can't stop it, and though I hate to admit it, Cramer is right. Better for us average Joes to get in and out quickly, before the big boys can leave us hung dry and holding the bag. Empty bags.

It wouldn't surprise me to see CROX rebound eventually, but it won't happen any time soon without positive news. Strong positive news. And though Georges Yared is probably right about CROX in his latest analysis, one thing he and a lot of bulls have never really grasped is the fact that this is the most tumultuous, volatile market perhaps ever. Long-term investors are better off staying away from streaming quotes and computers for weeks and months at a time, while traders are raking in profits on the long and short sides.

Up 70% (Crocs), up 57% (China Digital TV), up 49% (lululemon athletica), the least I could've done was take half the position off the table and bank it. Instead, my gains were minimal, losses were substantial (within small positions). We'll get our dips and our runs. Now I have to figure out what to do with my LULU and CHL.

CHL is a cheap call

And I don't mean call as in options. China Mobile got butchered on the Hang Seng simply because Big Red (Chinese government) is delaying retail investors from entering the HS. So shares sank all the way down to 86+ this morning. I added more to my little position at 89.78. It may take some time, but China's economy, the use of cellphones to surf the net and online gaming are unparalleled. I think 89 is a steal at this point. The stock is trading far below its 10-day averages (SMA 99, EMA 97).

Ni hao ma!

Friday, November 2, 2007

China Mobile a buy

Almost picked up more VMware, but the increased volume today on a dip kept me at a distance. I did scoop up a few shares of China Mobile for the first time. The stock has ramped up in the past few months and may be in for a period of lengthy consolidation. That's fine. I like where it is right now, and also where the prospects of the Co are in the near future. As I mentioned earlier, online gaming is huge in China, and CHL is just starting to dip its toes into this new area.

For trading purposes, I would've been better off increasing a position in another stock, but CHL is too good to bypass anymore. It's an A grade stock, but I won't hesitate to take a good profit.

Steroid Monsters Good

Normally, words like steroids and monsters conjure up negativity, even nightmares for squeamish little boys and girls like us. But really, in the market, the big-cap growth stocks have flourished for long-term holders. For short-term swing traders, they have been glorious. Apple. RIMM. Google.

Today, with the market returning to a neutral state, at least in the NAS, I'm looking for a bargain. China Mobile is at 99.15 in after hours, just below its 10-day simple moving average. CHL is well off its highs of the week, a steroid monster with the dominant position in China. Because of the Chinese penchant for internet surfing via cellphone rather than the PC, growth is still going to be huge for China Mobile. The Co is only beginning to tap into the enormous online gaming market, as well. Those brothers in China love their online games, and the sisters absolutely depend on text messaging.

Another complex, intriguing temptor is lululemon athletica, which is below 47 right now. The stock has been a trader's wet dream, really, spiking from 40 to 60 in almost no time because of raised guidance. Of course, anything that ascends too quickly comes crashing down just as quickly, if not faster. That's the case for LULU, which has now traded down in seven of the last nine sessions. Today's dip to 46.75 (AH) came on larger volume — not a positive buy sign. Then again, if the market truly is oversold, this is a good place to start a small position. Those who got their 50% gain and sold are wiser and wealthier for it.

I love this Co, but it has to be a trading vehicle, at least with a half-position. It'll probably stay in that category until after Q3 earnings are out. If the Co meets expections — the ones that it guided to last month before the huge spurt to 60 — there could be another selloff. To me, guidance is foolhardy, but the Co may have been responding from a previous dip that sent the stock from 47 to 41 in just two days.

Oh well. This is the nature of the game today for younger growth retail companies. Guide or sink. Google allowed its stock to sink from 125 to 85 in the first few months of its IPO. No guidance, no outward stress. They did all right. I'm not hoping for LULU to dip even more here. I would like to hear about an earnings announcement date, though. Early in any of the upcoming weeks rather than later — one of my few superstitious tenets about bullish-versus-bearish reports. LULU is trading below its 10- and 50-day moving averages. A clear buy signal for an established stock. LULU is too young right now for me to stamp an automatic strong buy tag on it. Risky.

VMware is another attractive buy, even though it has run up so strongly. At 116.75 (AH), the stock is down 4.5% today, but still above its 10-day SMA (114.35). The stock hit a low of 114.55 mid-day, so this may have been the short-term bottom. I love the Co and its prospects, its dominant state. I've said this before, when I bought before earnings, and my perspective has not changed. As long as there's no negative news, it has support at this level. I'm real close to getting a few more shares of VMW right here.

The cloud above all of this thinking and guessing, of course, is the market. No Fed rate cuts on the horizon. More clouds ahead. But the true steroid monsters will plow forward, unstoppable by problems in the U.S. That's what makes CHL compelling. Bad numbers or not in the periphery, VMW will plow forward because of demand. Retail, though, can't really digest a future without stronger consumer spending and/or Fed rate cuts. That rules out more LULU, probably. I'm overweight there to begin with.

Crocs? The stock is all over the place, currently at 47.36 (AH). Can't tell if this is a bottom, or whether it will sink more on Monday without another buyback by the Co. But I haven't sold a share.

Trade in profits when possible. That's my new mantra. But there's no profit with a buy first. Bargain shopping resumes now.

Crocs faces poachers

By nature, I'm a buy-and-hold investor, but the best thing I've learned from Cramer is that the street owns. If the street wants something, it gets it one way or another, sooner or later. That's why he pushes the profit-taking mantra daily. Take half off if you have a huge profit. He knows and now I know it's been a Trader's Market for a while now, and there's extra money to be made by trading a half-position, 2/3 or 3/4 position, whatever, in your best stocks.

Crocs is a classic example. The street was far behind the common investor on this stock, and the street has been trying to punish us little guys forever (high short interest). Well ... they finally got to us, street gets the last laugh. Bank the short, put cheap CROX shares on the books. Twofold win. Manipulation? What manipulation? The street wouldn't do that, would they?

Of course they would. Legal or otherwise. But there's no crying in investing. Who can be poached by the street when profits are already in the bank? That's why Cramer, in his own way, is absolutely right ... much as I hate to do short-term trading. I'm just glad the bleeding has finally stopped. In 2006, AAPL went from 87 to 53 (July). If Crocs maintains growth rates above 100% and the dollar remains weak, numbers from overseas could surpass anyone's imagination. Maybe an Applelicious type of run ahead. I don't doubt it could happen.

Apple is at 187 today. If Crocs has a similar buying psychology (it doesn't because of immense hatred from bears/shorts) and we have a similar reversal, the sky is still the limit.

Back to Cramer. He implores the masses (his groupies) to take significant profits as quickly and prudently as possible, in effect beating the street whenever there's a run. The street knows this, and takes profits earlier and earlier. We have an accelerating pattern of sells on surges, and thus, mammoth volatility. Cramer did some of us a favor by hating Crocs overnight. Those of us with dry powder.

Remember, he always said the time to sell Crocs would be after it had four big-time analysts following it. Never happened. A string of good news will send shorts covering.

Thursday, November 1, 2007

Crocs announces buyback

Thank goodness, we may have a reprieve.

Crocs, Inc. Board of Directors Authorizes Stock Repurchase

It's "only" a million shares, but anything would help to stop the bleeding at this point. Crocs has done its share of guiding the street, both at mid-quarter and at end. Google seems to do fine without guiding anyone.