Trading Tip #18: Do Not Trade In DECEMBER

If you’re someone whose either made a lot of money YTD (Year-To-Date) and are looking to end this year with a BANG, or someone whose lost a lot of money throughout the year, and are looking to hit that one jackpot trade that’ll help you recover all your losses, STOP NOW !!! You are on a path of destruction.

Rule #1: Do Not Trade In DECEMBER !!!

This rule is the holy grail of Trading, especially if you’re a Retail Trader, trading from your own E-Trade account. You will ruin the holidays not only for yourself, but also your Family, and the ones that depend on you. December is the month where the Vacuum Tubes (Algos) completely take over 99% of all Trading Activity. The Volumes and Volatility are pretty much non-existent. It’s a Muppet trap, specifically designed by MIT/Harvard Graduates, to make sure that they keep making money while they’re sitting at a table in Las Vegas, playing strip poker with Maria Bartiromo and Santa Claus Cramer, while you’re on the verge of Bankruptcy, Insanity, and full-on Depression. No matter what instrument you trade, or what side you take (Bull/Bear), you will get Butchered by The Machines.

Conclusion:

Do not trade from December 1st - January 15th of ANY YEAR.

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Market Crash Awaits !!! - Really Carl??

Man, the hype that comes with being one of the biggest A-Hole on Wall Street, simply astounds me. Carl Icahn, The Exterminator has spoken. According to Carl, the markets are about to crash, or at least a 10% correction in the near future. His thesis is Fake Earnings, and Non-Existent Economic Growth, which would make sense if he himself was net short the market. In fact, if Icahn is so Bearish on the economy, why did he just buy $1+ Billion worth of AAPL shares? Is AAPL also reporting FAKE Earnings?? Come on son.

This is the exact farce that makes me sick, esp. when it moves the markets. Right after Icahn’s comments, the markets reversed and since then, the cautious approach has continued into today’s market action.

So is the market Over-Bought? Is the market about to Crash? 10% Correction?

All these are pure hypotheticals, and anyone who thinks that they can Time the markets, is merely delusional. Not sure of Icahn’s intentions, and neither do I care. The reality is, as long as you’ve got the Central Banks around the world flooding the markets with FREE Money, I wouldn’t bet against these BTFD Markets. Sorry.

Although, there are a lot of negative and bearish blogs out there that are extremely happy after listening to what Icahn had to say. Wishful thinking indeed; or more like a Propaganda machine churning out BS.

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Carl Icahn Might Be BAD News For Apple Investors

Well, The Exterminator finally revealed the size of his positions in Apple (AAPL) today, and it’s something that AAPL investors should really be afraid of. Icahn has a $1+ Billion position in AAPL, and depending on its price, could add some more. That’s a lot, especially if it’s an obnoxious fool like Icahn, who wont take NO for an answer. That to me is a big problem, more than anything else right now.

AAPL has thrived over the years by creating value for its investors through the development of high quality products that world has never seen before, which in turn results in high quality earnings. That’s exactly how any legitimate company should create VALUE. The problem is, Icahn is not a VALUE Investor; dude’s an Activist. Which means, he’s like a Leech, that’ll suck a company dry of its life source, and then move to the next HOST. It’s certainly a great strategy that has worked for him over the years, and that’s how he has made his wealth; by Bullying companies into making decisions that they wouldn’t normally make.

Here’s what I think will happen:

  • Icahn begins unloading his position as soon as AAPL breaks $700.
  • In the mean time, Icahn will bully AAPL into a Stock Buyback, of approximately $50+ Billion dollars.
  • Icahn completely exits his position at AAPL $1000.

Conclusion:

I request AAPL investors to be on high alert once AAPL breaks $700, as some unexpected volatility might cause High Blood Pressure.

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Is Twitter Overvalued?

As the non-existent volatility in the markets take a toll on my mental and financial well-being, I thought it’d be fun to indulge in some critical thinking, to kill some time. As such, someone asked me yesterday whether Twitter (TWTR) is Overvalued? The question certainly seems pretty legit, since the market doesn’t seem to think that way. In fact, investors are buying every single dip on TWTR that they can get their hands on. Personally, I’m a little mixed about the way I feel about TWTR, but I certainly don’t think TWTR should be trading above $40.

TWTR for me is a $15-$20 stock, and unless I see the company beat Wall Street estimates for 2 consecutive quarters, I’m going to stick with that opinion. To be honest, the so called “smart money” that’s being parked in TWTR, themselves don’t know WTF they’re investing in. Don’t get me wrong, TWTR is a great Company/Website, and I love TWTR; but that doesn’t mean I should log into my trading account and place a Market BUY on TWTR for 10,000 shares. That’s idiocy. Unless a company can definitively prove that they can generate consistent revenue, at least for 2 quarters and more, the IPO/Post-IPO price of a stock is irrelevant. It’s all HOPE, no real substance.

So my recommendation to you is, TWTR is an Overvalued stock and you should stay as far away from it as possible. Don’t touch this one until it comes back down to a reasonable price range .i.e. $15-$25.

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Options Trading Is Not For Everyone

My favorite neighbor, whose wife makes some legitimately delicious Pasta, got killed this week trading Options, and asked me whether there is a Holy Grail to consistently make profits trading Options.

First of All: Options Trading is not for everyone. The risk involved is simply too much even for Professional Traders to handle, let alone profit consistently. Any Financial Instrument, that involves leverage, is a sure shot way to lose your life savings, and disrupt your personal life to the point where you only find peace in constantly Worrying about your Finances; like a drug addict.

Can you make money trading options?

Sure you can; but the risk of losing that money is equally HIGH.

The ideal way to trade Options, is to not trade Options at all. Look for safer instruments like Stocks, and try to walk the fine line between Trading and flat out Gambling.

Conclusion:

Knowledge is NOT equal to SKILL.

And in Trading, SKILL is NOT equal to PROFITS.

Because in any case, when you place a trade, you’re still at the mercy of the broader market to deliver those flashing Green lights on your computer screens.

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Aaron Rodgers Should Only Return After Completely Recovering From His Collarbone Injury

One of the greatest athletes of our generation and the best QB in the NFL, is sidelined for at least 4-5 weeks due to a Collarbone Injury. Given the fact that Aaron Rodgers is the most passionate, determined, and focused athlete the world has ever seen, I’m sure he might be itching to get back on the field and do what he does best: Shred Secondaries. Though that is exactly what all Packer fans want, I believe that Aaron Rodgers should rest, and only return after completely recovering from his Collarbone Injury. The reason being, if he were to return earlier than expected, he faces the risk of re-injuring that collarbone and possibly being out for the entire season. We don’t want that. No one wants that. Even the fans of rival teams love watching Aaron Rodgers put-on a show every time he walks on the field. The man is Leonardo Di Vinci of our generation. Cerebral.

I believe the most realistic date for Aaron’s return is December 8th, 2013. And that is exactly when he should return. I have faith in coach McCarthy and I believe Seneca Wallace will do what needs to be done: Mange The Game.

Go Pack Go !!!

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$JPM - Dangerous Head-and-Shoulders Pattern On JPMorgan

JPMorgan (JPM) is on a dangerous path to destruction. The charts and the fundamentals are for once, perfectly aligned, and it appears that the Financial BULLS are in for a rude awakening. JPM is one of the many Banks that are tangled in a web of infinite lawsuits, both Civil and Government, and almost every other day is paying out Billions of $$$$ in settlements just to stay out of the news for bad publicity. Add to that the non-existent interest income, thanks to the Fed’s ZIRP; the NIMs of banks have been squeezed to an extent where the are forced to solely rely on Trading revenue to please their investors.

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NFC North: The Green Bay Packers Can Still Make The Playoffs With A 11-5 or 10-6 Record

To all the depressed Packers fans out there, still coping with the reality of Aaron Rodgers not being available to play for at least 4-5 Weeks with his Collarbone Injury, STOP WORRYING!!! We’ll still make the playoffs and eventually WIN the Super-Bowl. The path is not as complicated as the situation might deceive us to believe.

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$Z - Earnings Beat On Zillow; But Stock About To Get Beat Up.

We got an earnings beat on Zillow (Z), as a result of which the stock will Gap Up this morning by about $4.50 (5.70%). Despite this new found optimism, the charts don’t look as Bullish; in fact, the charts have never been more Bearish on Zillow than they are now. If Zillow were to close below $87 today, that would be a Mild Sell Signal, well within the range.

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$BBRY - Possible Island Reversal On BlackBerry

BlackBerry (BBRY) has been battered by the Bears and admittedly killing my portfolio for a while now. For now, it looks like BBRY seems to be bottoming out here, at these price levels, and all things being equal, could bounce from here.

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