Stenzrob's specials

[stenzrob]

Replaced 4/5 of the sold positions with a dose of QID at $45.10.

Intel's miss should be good for QID: INTC is down over 10% and QID up about 3% after hours.

[stenzrob]

Sometimes taking the loss to prevent further loss turns out OK.
I only wish I'd been quicker.

On 1/15, I went on a stock liquidation spree and bought QID.
This is the result from the two days since then:

Stock , Sell price , 1/17 close
HRBN , 21.25 , 19.90 (-6.35%)
REXX , 11.60 , 10.13 (-12.67%)
IDRA , 12.06 , 11.17 (-7.38%)
AXTI , 4.90 , 5.00 (+2.04%)
CYBS , 15.62 , 13.23 (-15.30%)

QID , bought at 45.10 , now 48.02 (+6.47%)

Major stenz pronouncement:
My view is that we are now in the early stages of a serious bear market that will last another 6 to 18 months. The bull market that started in early 2003 is over . All the indices (S&P, Dow, Nasdaq) peaked in October 2007. I will watch to see if I'm wrong, but right now, my crystal ball is saying that this is not just another correction. There will be bounces along the way, and I will attempt to trade them, but basically the market is toast until sometime in 2009.

This major trend turn is what I have been waiting to see if I would recognize ever since I was burned (like so many) in 2001 and 2002.

It's pointless to debate fundamentals or economics. Trends maintain themselves. As the losses start to mount up, more and more regular folks will start to pull their money out of stock funds. The fund managers will have to sell the stocks from their portfolios whether they are undervalued, great long term growth stories, or whatever, in order to satisfy the redemptions.

Fund reallocation
After selling individual stocks and buying QID in the self-directed portion of my IRA on 1/15 as discussed above, I also calculated new allocations for the mutual funds portion last night and placed the orders to make the adjustment. Over the past year, the stock funds had grown to several percent above (and bonds below) their targets, so reallocation was about due anyway. The self-directed portion has outperformed all other allocations (except international) - was 4.5% a year ago and is now over 5.5%, but that is not subject to reallocation. The agreement I made with my wife when we transferred a bunch of loose IRA's and 401k's into single IRA's for each of us and reallocated about a year ago, was that 4.5% of the total at that time was what I could play with. There is a virtual wall around it - no money goes from mutual funds to self-direct or vice versa. I can only sell shares in a mutual fund if the proceeds go directly to another mutual fund as part of a reallocation. The only way that I get to actively trade/manage a larger portion of our retirement funds is to grow it myself into a larger portion. This way, if I suck at it, the losses are contained.

These allocations are designed to be significantly higher than average risk with a retirement timeframe of about 10 years.

Normal allocation:
Bonds 15%
SmlCap 15%
MidCap 15%
LrgCap 25%
Internat 25%
StenzPicks 5%

Bear Allocation:
Bonds 25%
SmlCap 10%
MidCap 10%
LrgCap 20%
Internat 20%
BEARX 10%
StenzPicks 5%

I'm no economist, and have done enough trading based on my own analysis to know that I'm no genius either. Since my pronouncement that we have just begun a major bear market could very well be flat-out wrong, the adjustments to my portfolio are what I would call incremental. Increasing bond allocation only makes the portfolio as a whole more conservative, and the portion that is specifically geared toward a bear market is only the 10% in BEARX, and that StenzPicks is likely to be in and out of an ultrashort ETF like QID until this bear is over.

[skiracer]

at least you have taken the time to try and develope a plan Stenz. better than just floundering.

[stenzrob]

Thanks ski. It's sad to see the same old stuff on the yahoo boards that was rampant in late 2000 and early 2001. Please note I only look at yahoo boards for amusement and to observe human (anti-social) behavior patterns.

"This stock can't possibly go below $xx because a) that's where support is b) that's where the P/E would be too low"

"This stock won't go down much further because this companies growth will be unaffected by the recession"

Many of those people are real people, who will be losing real money in the months to come (if my bear call is right). Some will use this "buying opportunity" to max out their margin accounts. It is useless to make any attempt to even moderate their wildly optimistic views.

[stenzrob]

Stimulus package won't help much, but has the futures up.
I took a look at pre-market trades in QID and set a stop limit at 46.50.

Taking my Audi to the shop today, leaving in a few minutes and might not be back until the afternoon. Set the stop because even during bear markets, rallies can be sharp and severe. Again, taking my cues from staring at the charts from late 2000.

[stenzrob]

Well, the market tried just hard enough to rally this morning to trigger my stop, which executed at 46.55. Still, the QID position still gained 3.2% while the market has tanked. I'll probably wait a few days before trying anything again, mostly because I don't want to be caught in anything, short or long, for more than a day right now.

[stenzrob]

Tuesday morning should see a significant gap down at the open.

Glad I adjusted my mutual funds, but it's a shame that I got stopped out of QID.

This is the update on futures on marketwatch today:
"March contracts on the Dow Jones Industrial Average traded 522 points lower to 11,584 as of 11:30 a.m. Eastern.

"Futures contract don't move in complete lockstep to the underlying indexes, but by comparison, the Dow industrials fell 382 points on Sept. 20, 2001, just days after the terrorist attack on the Twin Towers, and by 387 points on Aug. 9, 2007, shortly after the recent credit crunch first emerged.

"S&P 500 futures fell 60 points to 1,265.00 and Nasdaq 100 futures fell 76 points to 1,773.25."

[stenzrob]

back into QID at $50.
I'm thinking this bounce won't last.

[stenzrob]

AAPL's outlook should drive the market lower and QID higher tomorrow.
After hours, AAPL is down over 10%, and QID up about 3%.
The fun is just beginning.

[stenzrob]

Again, needed to hold that QID position for 3 days to prevent more serious trading restrictions on my account. This is very inconvenient, and meant that I was not able to exit intraday yesterday, but was able to escape this morning near the open at 50.32, with a measly 0.6% gain since Tuesday.
I will probably stay in cash for a few days until this rally starts to sell off again, which I still believe it will. I am looking for the nasdaq and qqqq to reverse at the 200 day ema.

[stenzrob]

Again, needed to hold that QID position for 3 days to prevent more serious trading restrictions on my account. This is very inconvenient, and meant that I was not able to exit intraday yesterday, but was able to escape this morning near the open at 50.32, with a measly 0.6% gain since Tuesday.
I will probably stay in cash for a few days until this rally starts to sell off again, which I still believe it will. I am looking for the nasdaq and qqqq to reverse at the 200 day ema.

Couldn't resist, got back into QID again at 49 just before the close yesterday. Out of touch until a few minutes ago, I see it opened at 47 today and has been headed up ever since. Now comfortably back in the green again. QID is the only position I feel comfortable trading right now.

[stenzrob]

Set a stop no QID at 50.40.

Bought some ZRAN at 15.36, a bit slow on the trigger
Saw some demand for it at the open, and then saw that it was upgraded, also reporting after the close today.
Now I'll go see if I can find out the rationale for the upgrade.
Metrics look good, price/sales, price/book, PEG are all low and showing ZRAN to be undervalued here.

[stenzrob]

Set a stop no QID at 50.40.

Well, that didn't take long. Out of QID for now.

Holding LUNA and ZRAN.

[stenzrob]

Bought some SIGM for $46.00.

Now about 40% invested in a few long positions, also considering some SDTH. If the rally continues, these should do well, and if not, I'm prepared to dump them and go back into QID.

[stenzrob]

ZRAN's outlook sucks. Down a few dollars after hours. Oh, well.