Market Watch for week of July 20, 2009

[Dr. Dave]

Dread -

Because of the swaps, options and futures traded to make the leverage on ultra or leveraged funds, and the corresponding relation to volatility - holding those things long term, particularly long is dangerous. Ie. you don't get 2x, or the 3x on the direxion funds. During low volatility you may get 1.5x and high volatility 3x or so. Also, because it is mulitplied - if you go in the long direction, and take a loss, its really hard to come back.

ie. say underlying IYR rises 25% and theoretically at 2X SRS drops 50% and say both started at $100. IYR needs to fall back 20% to get back to $100. SRS needs a 100% to get back to $100. But if its 2X of IYR, it would only gain 40%. IYR would have to continue to plummet way farther to get that other 60% for SRS.

It's tough, so keep it to trades under a week I'd say.

Check out SRS vs. URE - they should be opposite right... yet if you shorted both from the beginning of this chart - you'd be up in both of them. It seems that if you went long both or short both, you'd be even, but its not the case.

I think folks have caught on to this, so I think you can't actually short them any more - but that was a rumor I heard.

I've lost more than I've earned on those things. Usually from trades lasting more than a few days. They actually had to reverse split FAZ.

[Dr. Dave]

O.K., let's hear the big plays for tomorrow...the cheaper the better!

Hey, anyone that is new and reading here, please feel free to post

The Gang

I was going to say SQNM but it's over a dollar a share, hahaha.You can see on a daily chart, it will have an up day on high volume, followed by 5 days or so of dwindling down. But, if you peek at 60 min or smaller time scales... you can see massive buys - then the buyer(s) leave it alone so people looking at daily charts don't notice. Then let it trickle back. They had some bad press, and I bet that things are actually ok, and that's some folks in the know. It's likely not a good price now though - it's creeping up to its $5.34 resistance. But it's interesting thing to note, and a good reason to look at small time scale charts. The buying is pretty obvious.

Regarding MGLG - I didn't get my sells in, and I'm looking just to dump some of the shares. Like I said, I'm mostly forward testing my ability to play these things, so I don't have much in it in the first place, but I'd rather drop some of it. If it does come back, I'll have a little in.

[bassmaster]

I was going to say SQNM but it's over a dollar a share, hahaha.You can see on a daily chart, it will have an up day on high volume, followed by 5 days or so of dwindling down. But, if you peek at 60 min or smaller time scales... you can see massive buys - then the buyer(s) leave it alone so people looking at daily charts don't notice. Then let it trickle back. They had some bad press, and I bet that things are actually ok, and that's some folks in the know. It's likely not a good price now though - it's creeping up to its $5.34 resistance. But it's interesting thing to note, and a good reason to look at small time scale charts. The buying is pretty obvious.

Regarding MGLG - I didn't get my sells in, and I'm looking just to dump some of the shares. Like I said, I'm mostly forward testing my ability to play these things, so I don't have much in it in the first place, but I'd rather drop some of it. If it does come back, I'll have a little in.

im giving myself 1 year target of when i can daytrade stocks in the $5-10 range. i think a bankroll of 500k is needed to safely do that.

[Dr. Dave]

O.K., let's hear the big plays for tomorrow...the cheaper the better!

Hey, anyone that is new and reading here, please feel free to post

The Gang

Well, provided I get up early enough - I'm thinking of buying calls on AMZN. I may even place the order ahead of time. The nasdaq is settling within the gap, so it likely means it will close the gap. AAPL reported better than ever (I'm happy I sold my calls for disciplines sake, but since its up almost $7 AH, I'd likely had a 200+% gain in the morning). I'll likely go in AMZN because AAPL is too late, but will pull AMZN up, and AMZN reports in 2 days. It's primed for a breakout. I'd rather be awake though, with my finger on the trigger just to make sure AMZN opens higher. $90 strike calls which is below resistance are $455 as of the close, they will likely rocket out of my price range (already are - but I think I'm up to going as high as $500 now), so the $95 strike QZNHS look appealing. They are $262 now, I expect if there is a gap up, and additional premium for the earnings they could be $300 or so at the open. Not a penny I know, but if any of you do trade options, that's what I'm thinking. Note, I'm just starting to trade these, so do your homework.

[Dr. Dave]

im giving myself 1 year target of when i can daytrade stocks in the $5-10 range. i think a bankroll of 500k is needed to safely do that.

I rebought it as it was passing the previous minor high - I'm willing to stay in it long as long as it doesn't cut back too low when it makes its next dip.

[bassmaster]

dr dave, doesnt need to be a penny to be discussed here. maybe more options traders will join us and expand our game selection.

if you or anyone else is open to discussing your trades here then do it , we are all learning and each persons' experience will add knowledge to the rest of us regardless of what market we trade through.

[bassmaster]

O.K., let's hear the big plays for tomorrow...the cheaper the better!

Hey, anyone that is new and reading here, please feel free to post

The Gang

its not cheap. but i really am starting to fall in love with QASP , YOUR PICK!!!. i am in for a small amount ($2k) but if can get get more confirmation on their revenues, i will be increasing my position.

fundamentals need to be confirmed for me.

this is the speculation on the revenues and valuation from the new acquisitions the company is supposed to be closing the deal on next month (from the wheel , btw does this make sense?):


Posted by: c7bk Date: Tuesday, July 21, 2009 12:30:32 PM
In reply to: mm107 who wrote msg# 11642 Post # of 11874

$15M divided by 205M (o/s) is .07 per share

Times a conservative PE of 7 is

.49 share price after closing all 3 acquisitions on 8/14/09

Minimum!

And this correction;

Posted by: thebronkx Date: Tuesday, July 21, 2009 7:00:23 PM
In reply to: c7bk who wrote msg# 11645 Post # of 11876


c7bk - you forgot the 8m for the schooling:

So 8m + 15m = 22m

22m divided by 205m (o/s) is .107 a share

times a conserative PE of 7 is

.75 a share.

[Dr. Dave]

How do you guys pronounce QASP in your heads? I do it as "Kwasp"

its not cheap. but i really am starting to fall in love with QASP , YOUR PICK!!!. i am in for a small amount ($2k) but if can get get more confirmation on their revenues, i will be increasing my position.

fundamentals need to be confirmed for me.

this is the speculation on the revenues and valuation from the new acquisitions the company is supposed to be closing the deal on next month (from the wheel , btw does this make sense?):


Posted by: c7bk Date: Tuesday, July 21, 2009 12:30:32 PM
In reply to: mm107 who wrote msg# 11642 Post # of 11874

$15M divided by 205M (o/s) is .07 per share

Times a conservative PE of 7 is

.49 share price after closing all 3 acquisitions on 8/14/09

Minimum!

And this correction;

Posted by: thebronkx Date: Tuesday, July 21, 2009 7:00:23 PM
In reply to: c7bk who wrote msg# 11645 Post # of 11876


c7bk - you forgot the 8m for the schooling:

So 8m + 15m = 22m

22m divided by 205m (o/s) is .107 a share

times a conserative PE of 7 is

.75 a share.

[Dr. Dave]

QASP chart looks better today than yesterday. I like the idea of going in on an open above 0.03. But that's just me.

[Dr. Dave]

Two sets of fib lines @0.031, and resistance @0.030 -
I haven't looked further than that, but an open above should be a green light