Market Watch - week of Sept. 21st 2009

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Originally Posted by candleman

This in NOT good news for the Sponge. It looks like it may be awhile till we get our money back.

SpongeTech(R) Delivery Systems, Inc. Announces Rescission of Investment Plans in GetFugu, Inc.
3 minutes ago - Businesswire

Related Companies
Symbol Last %Chg
GFGU 0.63 -7.89%
SPNGE 0.091 -14.23%

As of 2:40 PM ET 9/24/09
SpongeTech(R) Delivery Systems, Inc. ("SpongeTech" or the "Company"), "The Smarter Sponge(TM)", (OTCBB: SPNGE) announced today that the previously announced investment arrangement with GetFugu, Inc. has been rescinded.

On September 8, 2009, SpongeTech had announced that it was going to invest $4 million into GetFugu's mobile-based web search and e-commerce technology, and that SpongeTech would be the first company to utilize GetFugu's innovative mobile search platform.

An aggregate of $1,750,000 had been advanced to GetFugu in anticipation of the entry into a definitive investment agreement. GetFugu has advised the Company that it currently does not have the funds to repay the $1,750,000 and that it is seeking alternative financing sources to fund a reimbursement

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Give me a break...they spent spongies money.....:rolleyes: Alternative sources usually mean "stock". I guess none of them have ever heard of an escrow account.

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Originally Posted by billhart22

Here is the deal:

You can make up to 4 round trips in a week and not be considered a day trader, however, you cannot put the money back into the same stock until it clears. You can purchase another stock, but you cannot sell it until the original money clears.

Anything above and beyond that takes a margin (day trading) account. I do not know how that works with a person's finances.

I am curious....do you need to have $25,000 physical dollars in your account to open a margin account, or do you just get a line of credit for that?

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Cleared for day trading is where you need $25000 cash balance

Margin is a completely separate thing (but you likely need margin to day trade.. in fact, they allow more margin so you can do it I believe). So you can get a margin account without that number.

Margin works like this - but the numbers won't be right, but you'll see what I mean.

Say you have $2000 in your account and no stocks...

your account will look like this:

Buying power (margin + cash balance) = $2000
Cash Balance = $2000

Then you buy $500 of AAPL and say they allow (this is the part where the numbers may be wrong) 50% margin on that... your account will look like:


Buying power = $1750 (here you get an extra $250 loan cause you own $500 of AAPL, so that's the collateral)
Cash Balance = $1500 (you have $500 in AAPL, so this amount is the same you are seeing in a cash account)

So now you can buy $1500 of stock (with commissions included) and not go into margin... same as with a cash account), or if you are brave, you can go into margin, which I don't recommend, and buy $1750 of stock)

Now you buy $1000 of SIRI (I assume this is marginable) - but since it's under a buck, they only give you 25% of the amount to be marginable)

Buying power = $1000 (ie. $500 cash + $250 from AAPL + $250 from SIRI)
Cash Balance = $500

Now you can buy $500 more of stock just as you would with a cash balance and not be in the margin (loan zone), or $1000 stock, but $500 of it would get loan charges).

Now you buy $200 of MGLG.... that likely isn't marginable...

so

Buying power = $800 ($300 cash + $250 AAPL collateral + $250 Siri collateral)
Cash Balance = $300

Now say you want $500 more of SIRI right then and there, but don't want to be on margin...

Sell $300 of AAPL, buy $500 SIRI

Cash Balance = $100 ($300 original cash + $300 AAPL = $600, then buy $500 SIRI, so $600-$500 = $100)

Buying power = $700 [$100 cash + $100 (50% of AAPL remaining) + $500 (25% of SIRI)]

So you could buy $700 of stock now, but $600 would have loan interest.

Truthfully, I never look at the buying power, I only look at the cash balance, so it's not that complicated, if you just look at the cash balance, just like you do in your account, you'll be fine. If you trade within the 3 day settlement period, you'll still get the free ride message, but it won't matter, or shouldn't... not sure what margin you get for pennies, if any). Which in that case, you may want to call the broker and see if margin will even help to get your trades without the settle restriction if you are only buying penny stocks.

Also, one other thing, there is buying power listed for marginable stocks, and not marginable.

But like I said, I don't read it.

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Originally Posted by billhart22

Give me a break...they spent spongies money.....:rolleyes: Alternative sources usually mean "stock". I guess none of them have ever heard of an escrow account.

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Ouch....spnge is taking a beating.... I see it now they spent some of spnges $$$ and now can't pay it back

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Originally Posted by Alaska Guy

Ouch....spnge is taking a beating.... I see it now they spent some of spnges $$$ and now can't pay it back

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Yes, the sponge is taking a bath.....:D

Speaking of SIRI, here's one of my ancient charts - I drew it out in april, and only dragged out some of the lines since

it is my support/resistance chart - I think we had 3 days were prices pierced the 0.68, 0.69, 0.70 resistance...

The line has been holding for a month now...

Coulda gone in big on the last pennant, and cashed out there... but my days of going in big are gone... but next time we get something like that, I'll likely double up, which still isn't as big as I used to go, lol.

http://www.scripps.edu/~davess/siri13/SIRI.png

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Originally Posted by candleman

Yes, the sponge is taking a bath.....:D

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Heck! I might need one of these sponges for the bath I'm taking on this right now! 

Wow, almost 3 billion shares have traded hands so far.

Not bad for a company that only has 385 million shares outstanding.....

I wonder how they do that???:rolleyes:

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Originally Posted by Dr. Dave

Cleared for day trading is where you need $25000 cash balance

Margin is a completely separate thing (but you likely need margin to day trade.. in fact, they allow more margin so you can do it I believe). So you can get a margin account without that number.

Margin works like this - but the numbers won't be right, but you'll see what I mean.

Say you have $2000 in your account and no stocks...

your account will look like this:

Buying power (margin + cash balance) = $2000
Cash Balance = $2000

Then you buy $500 of AAPL and say they allow (this is the part where the numbers may be wrong) 50% margin on that... your account will look like:


Buying power = $1750 (here you get an extra $250 loan cause you own $500 of AAPL, so that's the collateral)
Cash Balance = $1500 (you have $500 in AAPL, so this amount is the same you are seeing in a cash account)

So now you can buy $1500 of stock (with commissions included) and not go into margin... same as with a cash account), or if you are brave, you can go into margin, which I don't recommend, and buy $1750 of stock)

Now you buy $1000 of SIRI (I assume this is marginable) - but since it's under a buck, they only give you 25% of the amount to be marginable)

Buying power = $1000 (ie. $500 cash + $250 from AAPL + $250 from SIRI)
Cash Balance = $500

Now you can buy $500 more of stock just as you would with a cash balance and not be in the margin (loan zone), or $1000 stock, but $500 of it would get loan charges).

Now you buy $200 of MGLG.... that likely isn't marginable...

so

Buying power = $800 ($300 cash + $250 AAPL collateral + $250 Siri collateral)
Cash Balance = $300

Now say you want $500 more of SIRI right then and there, but don't want to be on margin...

Sell $300 of AAPL, buy $500 SIRI

Cash Balance = $100 ($300 original cash + $300 AAPL = $600, then buy $500 SIRI, so $600-$500 = $100)

Buying power = $700 [$100 cash + $100 (50% of AAPL remaining) + $500 (25% of SIRI)]

So you could buy $700 of stock now, but $600 would have loan interest.

Truthfully, I never look at the buying power, I only look at the cash balance, so it's not that complicated, if you just look at the cash balance, just like you do in your account, you'll be fine. If you trade within the 3 day settlement period, you'll still get the free ride message, but it won't matter, or shouldn't... not sure what margin you get for pennies, if any). Which in that case, you may want to call the broker and see if margin will even help to get your trades without the settle restriction if you are only buying penny stocks.

Also, one other thing, there is buying power listed for marginable stocks, and not marginable.

But like I said, I don't read it.

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Hey Dave,

Thank you for the great explanation. It works totally different than I had imagined. I didn't realize that the cash and margin were so intertwined. I am going to read that a few more times and let it really soak in.

Again, thanks for the big explanation.....it really helped!

QASP is qasping for air too. Down to 2 cents again.

This is not a good day!!!!

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Originally Posted by Dr. Dave

Speaking of SIRI, here's one of my ancient charts - I drew it out in april, and only dragged out some of the lines since

it is my support/resistance chart - I think we had 3 days were prices pierced the 0.68, 0.69, 0.70 resistance...

The line has been holding for a month now...

Coulda gone in big on the last pennant, and cashed out there... but my days of going in big are gone... but next time we get something like that, I'll likely double up, which still isn't as big as I used to go, lol.

http://www.scripps.edu/~davess/siri13/SIRI.png

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Dave you got your fibs in there right.... 1.08 is 100% then taking off from there is correct. 1.50 and 2.77 are subjective, but overall you nailed it! ;)

Oh my gosh, SIRI just dropped below 62 cents. I bought a boatload. I hope that was a momentary drop and I get back out in a few minutes.

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Originally Posted by billhart22

Hey Dave,

Thank you for the great explanation. It works totally different than I had imagined. I didn't realize that the cash and margin were so intertwined. I am going to read that a few more times and let it really soak in.

Again, thanks for the big explanation.....it really helped!

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The most important thing is to only look at your cash balance, same as you do in your cash account, and you shouldn't have any problems, i take that back...

The only caveat is say
if you started with $10000

Bought $9000 of SIRI and thus had some buying power
had $1000 in cash left

Bought $1000 AAPL, then sold $1000 AAPL - not sure if the cash balance would read $0 on that day, or $1000 - it should say $0, since AAPL hasn't cleared. But technically, you should be able to buy $1000 of something else right away anyway. I'm pretty sure cash balance is always cash that's settled. Like I said, I haven't messed it up... the 2 times I went over was when I used market orders, and I slipped a little into it... MB trading charged me interest (but your talking like $1), scottrade didn't since I corrected it the same day.

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Originally Posted by candleman

Wow, almost 3 billion shares have traded hands so far.

Not bad for a company that only has 385 million shares outstanding.....

I wonder how they do that???:rolleyes:

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Watch this hand!

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Originally Posted by candleman

Oh my gosh, SIRI just dropped below 62 cents. I bought a boatload. I hope that was a momentary drop and I get back out in a few minutes.

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I have $0.636

The market is taking a little dump - mixed on decrease in job loss, but decrease in home sales. SIRI is listed... so plan accordingly.

Actually, since it's movement to the downside precedes stronger stocks, it's not a bad barometer for the rest of the market.

http://www.scripps.edu/~davess/siri13/SIRI-AAPL.png
http://www.scripps.edu/~davess/siri13/SIRI-index.png

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Originally Posted by Dr. Dave

The most important thing is to only look at your cash balance, same as you do in your cash account, and you shouldn't have any problems, i take that back...

The only caveat is say
if you started with $10000

Bought $9000 of SIRI and thus had some buying power
had $1000 in cash left

Bought $1000 AAPL, then sold $1000 AAPL - not sure if the cash balance would read $0 on that day, or $1000 - it should say $0, since AAPL hasn't cleared. But technically, you should be able to buy $1000 of something else right away anyway. I'm pretty sure cash balance is always cash that's settled. Like I said, I haven't messed it up... the 2 times I went over was when I used market orders, and I slipped a little into it... MB trading charged me interest (but your talking like $1), scottrade didn't since I corrected it the same day.

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I gotcha now! I see how you play it now...good information.

SIRI is forming a larger pennant - and the ES (SP futures) were taking a breather, but still looking for upside.

That 0.70 resistance will be a tough one to break - SIRI had a smaller pennant and I advised on the other boards about a month ago not to play it because of that triple resistance...

We'll have to see where the market goes. Back in april, the folks on the other board were looking at the 200 sma, no mention of the pennant back then, now after several pennants, those folks started mentioning the pattern, and when that happens, it's more likely to fail, as it did last month, we'll see what happens to this larger one.

Need to see the volume on the major indexes at the end of the day, and how IBD and the rest call it.

I have another long term chart, and the two indicators I use for it are pointing a little down... but that's typical when this pattern forms.

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Originally Posted by billhart22

The spoke is the shrub which is the wheel.

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LOL .... Ah man ... too funny, got totaly distracted during lunch here.

Picked up another 3 mil EVFL earlier (Etrade ...) and was thinking about flipping it, then my boss came back to chat ...

Candleman ... the shrub\spoke\ wheel ... it's all code so they don't drag their children over here ... I mean, so that the children don't invade our happy little home ...

Rat's meeting time ...

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Originally Posted by candleman

QASP is qasping for air too. Down to 2 cents again.

This is not a good day!!!!

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There supposed to be starting a stock buyback, if it doesn't happen soon, I'm going to take a bath on this one too!!! And I have serious dough on this one

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Originally Posted by billhart22

I gotcha now! I see how you play it now...good information.

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All in all, you won't hurt yourself if you sign up, and just keep an eye on the actual cash you have in hand... whether for that 3 days during settlement cash balance would read $0 or $1000...

at the end of 3 days, it's surely $1000, and I'm pretty sure it would read $0 during those 3 days... since you couldnt withdraw it until settlement.

When you go to your account tab though, it will have a lot of stuff in it... as you would then also be cleared to short stocks, and that adds money to your account. But again, if you don't go into margin, then there's no reason to confuse yourself. It made my head spin for a while...

in fact, I just looked, and cash balance is "total money balance" on the home page tab, right above "Total account value"

Man, I've been online all day, need to work, wanted to see where ASFX closed.

Thank goodness, market closed... I hope the ES starts a rally, I need to decide on what to cut here... PACR has been good to me, but it's just not going to the next level, and the market could dump, and it's listed.

If the market starts dumping, I'm going in on PMU - I may just go in tomorrow, judging from that chart, want to buy within yesterday's candle.