Hooray for Stock Market Blood!

There was a very nice 300 point drop on the DJIA today. Why am I pleased about it? I have been becoming somewhat savvy with trading over the past few weeks, that's why. I pull up the charts on Yahoo Finance, see where the support and resistance levels are, and make a hypothesis for as to what the price of the stock could go to. I have been reading lately, articles by people that are more knowledgeable than I, that there is going to be volatility in the market for quite some time. So, in anticipation of the market dropping off again, I put in some GTC (Good 'Til Canceled) stop limit orders and limit orders for my more volatile positions (DRYS, WFR, UPL), and just limit orders for positions that I wanted more shares of (BEAV). We will go into a bull market soon enough, which might be as soon as the next FOMC meeting (03/18/08).

I knew yesterday that the move on Crystallex was just hype, so I put in a stop limit order for it, which ended up selling some of my shares. I now have a limit order for it at the price that I bought it last time. I'm confident that it will get there, unless Hugo signs the permit before then.

A Ray of Hope

The never ending Crystallex (KRY) saga continues today. Crystallex is
a Canadian miner that has been preparing the Las Cristinas gold mine in Venezuela for an extensive period of time now. From what I understand, they have everything in place and have all of the permits they need but one. That last permit is in the hands of none other than Hugo Chavez himself. There is quite a bit of support for the development and production of the gold mine, because of the economic impact of the mine due to the creation of jobs and inflow of revenues to the country. I also read something about the military pushing out illegal miners from a territory nearby, which is apparently a good sign. I think if there is a significant outcry from the people to open it, and when Hugo sees a good opportunity to score some political brownie points with it, then he will sign it.

Taking Stock

I have been learning a few more things in regards to becoming a hybrid investor/trader, such as support, resistance, and breakouts. They are simply phenomenons that occur due to the psychology and irrationality of traders. I saw some videos about support and resistance on www.thestreet.com by Dan Fitzpatrick, and read about them in a book that I have been reading, "Way of the Turtle".

A Thought

It seems as though some things are so heavily dependent on random factors that they cannot be planned, no matter how hard you try. Just expect some random possibility becoming a reality.

Decision-Making Process

This is a highly specialized decision-making process that took many
years to develop:

Step 1: Close your eyes.

Step 2: Take a deep breath.

Step 3: Spin in place three times (more than that if you want to)

Step 4: Open your eyes.

Step 5: Wing it.

This process also works well in conjunction with the
eenie-meenie-mynie-moe method. Enjoy :-)

A Thought

Sometimes, the simplest things make the biggest difference.

Technically Speaking

I have found some technical indicators for stocks that have been
helping me considerably lately:

- Stochastics
- Relative Strength Index (RSI)
- Bollinger Bands
- Exponential Moving Average (use the 50 day average)

These indicators can be found on Yahoo! Finance's interactive charts.

These are playing a part in my quest to make a shift from being 100% investor to becoming 75% investor and 25% trader. It is just a simple matter of making an educated assessment of whether or not a stock is overbought/oversold, and having an idea as to what price to set my limit order(s) and my trailing stop limit orders at. It is an improvement on my buy/sell points.

I am still learning about analyzing share volume and the overall market. It is a matter of making it a point to persist in learning and improving as I go. In fact, my investigation of the OBV and CVI is still in progress.

A Quote

You cannot find something if you do not know what you are looking for.

A Quote

I read about a quote recently made by Napoleon Bonaparte:

"Men are moved by two levers only: Fear and Self Interest"

I like it.

A Quote

The recent activity in the domestic stock market reminded me of a
famous quote, which I think originated from the infamous Ben Graham:

"Be greedy when others are fearful, and be fearful when others are greedy"

If that is not the exact quote, it is at least close enough.

A Ray of Hope

One of the stock positions that I have is Crystallex (KRY), which is a Canadian gold mining company. The gold deposit that they have been developing is one of the largest left in the world, but is located in Venezuela. All of their plans have been laid out, the tests have been done, the equipment is ready, and everything is apparently in order. They have all of the permits required in order to start mining the gold, except one. That last permit that they need, of course, has to be approved by none other than Hugo Chavez. They have been waiting and preparing for the permit approval for quite some time. I was reading something recently that the infamous Hugo Chavez has been having some political problems, tough opposition, and unrest among the people lately. So, considering the number of jobs and income the gold mine would bring, hopefully Hugo will use the mine permit as leverage to help earn the approval of the people.

Q: Foreclosures

I think it is interesting as to the number of foreclosure 'get rich quick' programs there are these days. I'm very curious as to what the implications and the motivations are. I think that if there was an alternate and viable solution for consolidating the number of foreclosures, then we would not be seeing those programs on TV. I'm aware of the abundance of foreclosures that have occurred within the recent past.

What are the mechanics of foreclosures? How do they affect the overall economy?

I'm on the Lookout

I have been looking for a viable bank, mobile or even brick & mortar that operates and is located in Africa. A publicly traded bank, that is. I would like to have a small speculative position in one, and not necessarily via an ETF. Any developing economy needs a financial system in place.

Africa is Next

China has obviously been growing at a rapid rate for quite some time now, and is projected to grow their GDP at a 6-7% rate for years to come, and similar with India. Now that people in China have been producing more and the demand for workers has been growing, people are demanding that they should be paid more. So, that results in comapnies' margins being squeezed to the point in which they have to charge more for their products. One of the main reasons China is (was?) such a good place for American companies to build manufacturing plants and produce goods is because of cheap labor.

I think Africa will be the next big labor market, to produce cheap products much like China has done for years. Their population is growing fast, and is relatively young. Their political issues need to be resolved first.

The only other solution that I can think of would be to move further inland in China. They do have the largest population in the world at the present time.

A Quote

We ride a fine line between success and our own destruction.