Sunday, July 31, 2011

Out of Acme Packet with a 993% gain

Last week was a bad week. Crox (+10.9% for the week), Deckers Outdoor (+2.9%), and Baidu (+2.0%) were my lone bright spots. Everything else I own was down.

But as bad as it was, there was actually only one change to my portfolio: I was stopped out of Acme Packet Friday afternoon at the close.

- LONG the week of 3.9.09 at $5.39. Placing my stop at $2.89 the R was just $2.50. Closed Friday at $58.92, just $0.52 below its $59.44 stop. The percentage gain on this trade was 993.1%, and the reward-to-risk ratio was $60.31/$2.50 = 21.42.

All in all... not a bad trade.

On to the updates. 
 
Two stocks I'll be watching very closely this week are Boeing and Diamond Offshore, trading just $1.36 and $0.48 away from their respective stops. 
- LONG the week of 3.30.09 at $115.99. My initial stop was $84.39, so the risk (R) on the trade was $31.60. Closed Friday at $390.48 with a $338.23 stop. The new stop for the upcoming week is $337.31. The percentage gain on this trade is 236.6%, and the reward-to-risk ratio is $274.49/$31.60 = 8.69.

- LONG the week of 1.18.11 at $326.58. I used $259.28 for my stop, so the R was $67.30. Closed Friday at $400.55 with a $333.33 stop. The new stop for the coming week is $334.85. The percentage gain on this trade is 22.6%, and the reward-to-risk ratio is $73.97/$67.30 = 1.10.

Netflix (NFLX):
- LONG the week of 12.29.08 at $29.87. Using $19.25 for my stop, the risk was $10.62. Closed last week at $265.99 with a $233.09 stop. The stop for this week drops slightly to $227.37. The percentage gain on this trade is 709.5%, and the reward-to-risk ratio is $236.12/$10.62 = 22.24.

- LONG the week of 9.13.10 at $126.68. My stop was $103.19, so I risked $23.49. Closed Friday at $161.38 with a $141.23 stop. The new stop for this week is $140.30. The percentage gain on this trade is 27.4%, and the reward-to-risk ratio is $34.70/$23.49 = 1.48.

Wynn Resorts (WYNN): 
- LONG the week of 4.20.09 at $36.88. My stop was $15.28, so my R = $21.60. Closed last week at $153.68 with a $132.39 stop. The stop for this week will be $130.41. The percentage gain on this trade is 316.7%, and the reward-to-risk ratio is $116.80/$21.60 = 5.41.

- LONG the week of 8.2.10 at $84.21. With a stop at $62.02 the risk on the trade was $22.19. Closed Friday at $155.32 with a $121.85 stop. The stop for the coming week is $122.64. The percentage gain on this trade is 84.4%, and the reward-to-risk ratio is $71.11/$22.19 = 3.21.

- LONG the week of 7.11.11 at $597.62. With a stop at $500.50 the risk was $97.12. Closed Friday at $603.69 with a $523.19 stop. The new stop for this week moves up to $526.27. The percentage gain on this trade is 1.0%, and the reward-to-risk ratio is $6.07/$97.12 = 0.06.

Salesforce.com (CRM): 
- LONG the week of 3.30.09 at $37.27. I put my stop at $23.04, so the R for this trade was $14.23. Closed last week at $144.71 with a $126.71 stop. The stop for this week will be $126.28. The percentage gain on this trade is 288.3%, and the reward-to-risk ratio is $107.44/$14.23 = 7.55.

Baidu (BIDU): 
- LONG the week of 3.23.09 at $18.32. I used $11.34 as my stop, so the risk was $6.98. Closed last week at $157.07 with a $120.83 stop. The stop for this week moves up to $122.80. The percentage gain on this trade is 757.4%, and the reward-to-risk ratio is $138.75/$6.98 = 19.88.

Potash Corporation (POT): 
- LONG the week of 8.2.10 at $37.80. I used $29.08 for a stop, so the risk was $8.72. Closed last week at $57.81 with a $50.67 stop. The new stop for this week is $50.00. The percentage gain on this trade is 52.9%, and the reward-to-risk ratio is $20.01/$8.72 = 2.29.

Deckers Outdoor (DECK):
- LONG the week of 6.8.09 at $23.80. Using $15.11 for my first stop, the risk was $8.69. Closed last week at $99.25 with a $76.61 stop. The stop for this week will be $77.12. The percentage gain on this trade is 317.0%, and the reward-to-risk ratio is $75.45/$8.69 = 8.69.

- LONG the week of 5.4.09 at $2.52. My stop was $0.47, so I risked all of $2.05. Closed Friday at $31.33 with a $22.38 stop. The new stop for this week jumps to $24.10. The percentage gain on this trade is 1,143.3%, and the reward-to-risk ratio is $28.81/$2.05 = 14.08.

VMware (VMW): 
- LONG the week of 4.18.11 at $96.81. My stop was set at $74.62, so my R = $22.19. Closed last week at $100.34 with an $84.90 stop. The stop for this week will be $84.03. The percentage gain on this trade is 3.6%, and the reward-to-risk ratio is $3.53/$22.19 = 0.16.

- LONG the week of 4.6.09 at $10.53. With a stop at $6.56 the risk on the trade was just $3.97. Closed Friday at $54.40 with a $46.62 stop. The stop for the coming week is $45.56. The percentage gain on this trade is 416.6%, and the reward-to-risk ratio is $43.87/$3.97 = 11.05.

Boeing (BA): 
- LONG the week of 5.4.09 at $43.65. I used $32.10 for my stop, so the risk was $11.55. Closed last week at $70.47 with a $69.30 stop. The new stop will be $69.11. The percentage gain on this trade is 61.4%, and the reward-to-risk ratio is $26.82/$11.55 = 2.32.

Citrix Systems (CTXS): 
- LONG the week of 4.27.09 at $27.51. My stop was $19.55, so that makes the risk $7.96. Closed last week at $72.04 with a $69.01 stop. The new stop is $69.09. The percentage gain on this trade is 161.9%, and the reward-to-risk ratio is $44.53/$7.96 = 5.59.

Diamond Offshore (DO):
- LONG the week of 1.3.11 at $70.57. Using $57.65 for my stop, the risk was $12.92. Closed last week at $70.79 with a $67.74 stop. The stop for this week will be $67.35. The percentage loss on this trade is -3.9%, and the reward-to-risk ratio is -$2.74/$12.92 = -0.21.

Joy Global (JOYG): 
- LONG the week of 5.4.09 at $29.80. My stop was set at $17.74, so my R = $12.06. Closed last week at $93.92 with an $81.79 stop. The stop for this week is $80.09. The percentage gain on this trade is 215.2%, and the reward-to-risk ratio is $64.12/$12.06 = 5.32.

Sunday, July 24, 2011

Trading Without a Net

Honestly, trading with no short positions makes me feel like a tightrope walker working without a net.

At least the Google trade we talked about last week is off to a pretty good start.

Of course, it's only been a week...

But we'll go ahead and add it to the mix along with a quick update on all of our other open positions.
- LONG the week of 3.30.09 at $115.99. My initial stop was $84.39, so the risk (R) on the trade was $31.60. Closed Friday at $393.30 with a $316.35 stop. The new stop for the upcoming week jumps all the way to $338.23. The percentage gain on this trade is 239.1%, and the reward-to-risk ratio is $277.31/$31.60 = 8.77.

- LONG the week of 1.18.11 at $326.58. I used $259.28 for my stop, so the R was $67.30. Closed Friday at $405.10 with a $325.81 stop. The new stop for the coming week is $333.33. The percentage gain on this trade is 24.0%, and the reward-to-risk ratio is $78.52/$67.30 = 1.17.

Netflix (NFLX):
- LONG the week of 12.29.08 at $29.87. Using $19.25 for my stop, the risk was $10.62. Closed last week at $276.58 with a $232.13 stop. The stop for this week will be $233.21. The percentage gain on this trade is 825.9%, and the reward-to-risk ratio is $246.71/$10.62 = 23.24.

- LONG the week of 9.13.10 at $126.68. My stop was $103.19, so I risked $23.49. Closed Friday at $165.40 with a $142.14 stop. The new stop for this week is $141.23. The percentage gain on this trade is 30.6%, and the reward-to-risk ratio is $38.72/$23.49 = 1.65.

Wynn Resorts (WYNN): 
- LONG the week of 4.20.09 at $36.88. My stop was $15.28, so my R = $21.60. Closed last week at $165.25 with a $131.73 stop. The stop for this week will be $132.39. The percentage gain on this trade is 348.1%, and the reward-to-risk ratio is $128.37/$21.60 = 5.94.

- LONG the week of 8.2.10 at $84.21. With a stop at $62.02 the risk on the trade was $22.19. Closed Friday at $160.25 with a $116.32 stop. The stop for the coming week is $121.85. The percentage gain on this trade is 90.3%, and the reward-to-risk ratio is $76.04/$22.19 = 3.43.

Google (GOOG): 
- LONG the week of 7.11.11 at $597.62. With a stop at $500.50 the risk was $97.12. Closed Friday at $618.23, and the stop for the coming week moves up to $523.19. The percentage gain on this trade is 3.4%, and the reward-to-risk ratio is $20.61/$97.12 = 0.21.

Salesforce.com (CRM): 
- LONG the week of 3.30.09 at $37.27. I put my stop at $23.04, so the R for this trade was $14.23. Closed last week at $150.41 with a $128.65 stop. The stop for this week will be $126.71. The percentage gain on this trade is 303.6%, and the reward-to-risk ratio is $113.14/$14.23 = 7.95.

Baidu (BIDU): 
- LONG the week of 3.23.09 at $18.32. I used $11.34 as my stop, so the risk was $6.98. Closed last week at $154.00 with a $115.40 stop. The stop for this week moves up to $120.83. The percentage gain on this trade is 740.6%, and the reward-to-risk ratio is $135.68/$6.98 = 19.44.

- LONG the week of 3.9.09 at $5.39. Placing my stop at $2.89 the R was just $2.50. Closed Friday at $65.70 with a $60.56 stop. The new stop for the coming week will be $59.44. The percentage gain on this trade is 1,118.9%, and the reward-to-risk ratio is $60.31/$2.50 = 24.13.

Potash Corporation (POT): 
- LONG the week of 8.2.10 at $37.80. I used $29.08 for a stop, so the risk was $8.72. Closed last week at $61.64 with a $50.70 stop. The new stop for this week is $50.67. The percentage gain on this trade is 63.1%, and the reward-to-risk ratio is $23.84/$8.72 = 2.73.

Deckers Outdoor (DECK):
- LONG the week of 6.8.09 at $23.80. Using $15.11 for my first stop, the risk was $8.69. Closed last week at $96.42 with a $75.94 stop. The stop for this week will be $76.61. The percentage gain on this trade is 305.1%, and the reward-to-risk ratio is $72.62/$8.69 = 8.36.

- LONG the week of 5.4.09 at $2.52. My stop was $0.47, so I risked all of $2.05. Closed Friday at $28.24 with a $21.89 stop. The new stop for this week is going to be $22.38. The percentage gain on this trade is 1,020.6%, and the reward-to-risk ratio is $25.72/$2.05 = 12.57.

VMware (VMW): 
- LONG the week of 4.18.11 at $96.81. My stop was set at $74.62, so my R = $22.19. Closed last week at $106.72 with an $84.99 stop. The stop for this week drops slightly to $84.90. The percentage gain on this trade is 10.2%, and the reward-to-risk ratio is $9.91/$22.19 = 0.45.

- LONG the week of 4.6.09 at $10.53. With a stop at $6.56 the risk on the trade was just $3.97. Closed Friday at $60.26 with a $45.44 stop. The stop for the coming week is $46.62. The percentage gain on this trade is 472.3%, and the reward-to-risk ratio is $49.73/$3.97 = 12.52.

Boeing (BA): 
- LONG the week of 5.4.09 at $43.65. I used $32.10 for my stop, so the risk was $11.55. Closed last week at $72.67 with a $69.67 stop. The new stop will be $69.30. The percentage gain on this trade is 66.5%, and the reward-to-risk ratio is $29.02/$11.55 = 2.51.

Citrix Systems (CTXS): 
- LONG the week of 4.27.09 at $27.51. My stop was $19.55, so that makes the risk $7.96. Closed last week at $75.27 with a $69.00 stop. The new stop is $69.01. The percentage gain on this trade is 173.6%, and the reward-to-risk ratio is $47.76/$7.96 = 6.00.

Diamond Offshore (DO):
- LONG the week of 1.3.11 at $70.57. Using $57.65 for my stop, the risk was $12.92. Closed last week at $70.79 with a $67.74 stop. The stop for this week will be $67.50. The percentage gain on this trade is 0.3%, and the reward-to-risk ratio is $0.22/$12.92 = 0.02.

Joy Global (JOYG): 
- LONG the week of 5.4.09 at $29.80. My stop was set at $17.74, so my R = $12.06. Closed last week at $99.85 with an $82.16 stop. The stop for this week is $81.79. The percentage gain on this trade is 235.1%, and the reward-to-risk ratio is $70.05/$12.06 = 5.81.

Saturday, July 16, 2011

Buying Google at $600?

Yes.

The only new position I added to my portfolio this week is Google, just shy of $600/share.

My signal to go long coming into the week was $550.82, but it's not like there was any chance of getting in at that price. After closing at $528.94 and then announcing huge Q2 earnings after the bell on Thursday,  it opened at $597.50 yesterday. So all in all, I was relatively happy to get in a few pennies shy of $597.62 at the close.

My initial stop for the trade is going to be $500.50, and using my 1% risk model the position will carry a total portfolio weight of 5.98%.

One other thing to think about: if I was trading my daily model on Google I would have taken a long signal back on June 30th at $506.38 (with a $476.35 stop) and I'd already be sitting on a nice 18.0% gain. 

The stop for that model would be $535.13 for Monday. 
 

Sunday, July 10, 2011

Never Confuse Brains with a Bull Market

Of course, I do it all the time. 

I've been doing it for more than two years.

This is just a quick update on all of the positions I'm holding right now.

Apple (AAPL): 
- LONG the week of 3.30.09 at $115.99. My initial stop was $84.39, so the risk (R) on the trade was $31.60. Closed Friday at $359.71 with a $312.19 stop. The new stop for the upcoming week is $311.52. The percentage gain on this trade is 210.1%, and the reward-to-risk ratio is $243.72/$31.60 = 7.71.

- LONG the week of 1.18.11 at $326.58. I used $259.28 for my stop, so the R was $67.30. Closed Friday at $368.70 with a $326.26 stop. The new stop for the upcoming week is $324.24. The percentage gain on this trade is 12.9%, and the reward-to-risk ratio is $42.12/$67.30 = 0.63.

Netflix (NFLX):
- LONG the week of 12.29.08 at $29.87. Using $19.25 for my stop, the risk was $10.62. Closed last week at $295.14 with a $216.13 stop. The stop for this week will be $233.21. The percentage gain on this trade is 888.1%, and the reward-to-risk ratio is $265.27/$10.62 = 24.98.

- LONG the week of 9.13.10 at $126.68. My stop was $103.19, so I risked $23.49. Closed Friday at $162.79 with a $141.86 stop. The new stop for this week is $141.02. The percentage gain on this trade is 28.5%, and the reward-to-risk ratio is $36.11/$23.49 = 1.54.

Wynn Resorts (WYNN): 
- LONG the week of 4.20.09 at $36.88. My stop was $15.28, so my R = $21.60. Closed last week at $161.15 with a $118.18 stop. The stop for this week jumps to $128.53. The percentage gain on this trade is 337.0%, and the reward-to-risk ratio is $124.27/$21.60 = 5.75.

- LONG the week of 8.2.10 at $84.21. With a stop at $62.02 the risk on the trade was $22.19. Closed Friday at $149.01 with a $114.64 stop. The stop for the coming week is $115.71. The percentage gain on this trade is 77.0%, and the reward-to-risk ratio is $64.80/$22.19 = 2.92.

Salesforce.com (CRM): 
- LONG the week of 3.30.09 at $37.27. I put my stop at $23.04, so the R for this trade was $14.23. Closed last week at $156.67 with a $122.82 stop. The stop for this week will be $127.31. The percentage gain on this trade is 320.4%, and the reward-to-risk ratio is $119.40/$14.23 = 8.39.

Baidu (BIDU): 
- LONG the week of 3.23.09 at $18.32. I used $11.34 as my stop, so the risk was $6.98. Closed last week at $147.78 with a $113.18 stop. The new stop will be $114.90. The percentage gain on this trade is 706.7%, and the reward-to-risk ratio is $129.46/$6.98 = 18.55.

- LONG the week of 3.9.09 at $5.39. Placing my stop at $2.89 the R was just $2.50. Closed Friday at $72.27 with a $59.64 stop. The new stop for the coming week will be $61.02. The percentage gain on this trade is 1,240.8%, and the reward-to-risk ratio is $66.88/$2.50 = 26.76.

Potash Corporation (POT): 
- LONG the week of 8.2.10 at $37.80. I used $29.08 for a stop, so the risk was $8.72. Closed last week at $59.19 with a $49.53 stop. The new stop for this week is $49.97. The percentage gain on this trade is 56.6%, and the reward-to-risk ratio is $21.39/$8.72 = 2.45.

Deckers Outdoor (DECK):
- LONG the week of 6.8.09 at $23.80. Using $15.11 for my first stop, the risk was $8.69. Closed last week at $95.18 with a $75.25 stop. The stop for this week will be $75.34. The percentage gain on this trade is 299.9%, and the reward-to-risk ratio is $71.38/$8.69 = 8.22.

- LONG the week of 5.4.09 at $2.52. My stop was $0.47, so I risked all of $2.05. Closed Friday at $27.47 with a $20.81 stop. The new stop for this week is going to be $21.82. The percentage gain on this trade is 990.1%, and the reward-to-risk ratio is $24.95/$2.05 = 12.19.

VMware (VMW): 
- LONG the week of 4.18.11 at $96.81. My stop was set at $74.62, so my R = $22.19. Closed last week at $105.00 with a $79.01 stop. The stop for this week jumps up to $84.40. The percentage gain on this trade is 8.5%, and the reward-to-risk ratio is $8.19/$22.19 = 0.37.

- LONG the week of 4.6.09 at $10.53. With a stop at $6.56 the risk on the trade was just $3.97. Closed Friday at $63.10 with a $43.76 stop. The stop for the coming week is $45.63. The percentage gain on this trade is 499.2%, and the reward-to-risk ratio is $52.57/$3.97 = 13.24.

Boeing (BA): 
- LONG the week of 5.4.09 at $43.65. I used $32.10 for my stop, so the risk was $11.55. Closed last week at $75.07 with a $69.65 stop. The new stop will be $70.09. The percentage gain on this trade is 72.0%, and the reward-to-risk ratio is $31.42/$11.55 = 2.72.

Citrix Systems (CTXS): 
- LONG the week of 4.27.09 at $27.51. My stop was $19.55, so that makes the risk $7.96. Closed last week at $82.98 with a $69.88 stop. The new stop is $70.61. The percentage gain on this trade is 201.6%, and the reward-to-risk ratio is $55.47/$7.96 = 6.97.

Diamond Offshore (DO):
- LONG the week of 1.3.11 at $70.57. Using $57.65 for my stop, the risk was $12.92. Closed last week at $70.71 with a $66.57 stop. The stop for this week will be $67.32. The percentage gain on this trade is 0.2%, and the reward-to-risk ratio is $0.14/$12.92 = 0.01.

Joy Global (JOYG): 
- LONG the week of 5.4.09 at $29.80. My stop was set at $17.74, so my R = $12.06. Closed last week at $97.25 with an $80.17 stop. The stop for this week is $81.47. The percentage gain on this trade is 226.3%, and the reward-to-risk ratio is $67.45/$12.06 = 5.59.

Sunday, July 3, 2011

No More Short Selling

I covered all of my shorts last week. 


I didn't cover in any kind of panic over the direction the market was taking, but I was eager to eliminate each and every one of my short positions once I completed a research project I'd been working on for the last month. 

After studying all 198 trades I've made over the last 8 years, I determined that short selling was clearly doing my portfolio more harm than good.

Here's a quick look at the actual performance:

Total trades: 198
Winning Trades: 122 | 61.6%
Losing Trades: 76 | 38.4%
Avg. Winning Trade: $40.77
Avg. Losing Trade: -$10.66
Avg. Trade: Gain of 71.6% | $20.12 | Risk-to-Reward Ratio (R): 2.51

Now, what if I had taken only the long signals?

Total trades : 102
Winning Trades: 78 | 76.5%
Losing Trades: 24 | 23.5%
Avg. Winning Trade: $49.60
Avg. Losing Trade: -$10.35
Avg. Trade: Gain of 140.0% | $35.30 | Risk-to-Reward Ratio (R): 4.96

Of course, past performance is no guarantee of future results... but for the foreseeable future (at least the balance of 2011), I'm going to try running a long only portfolio and we'll see what happens.