I have been back for a while but have been really busy to update this blog. In addition to that MSN screener that I used to scan for stocks is no longer available. Currently, I am looking at few other businesses to start in Nepal and am busy working on the business plans.
Here is a simple strategy that should beat the market. We are in a bull market now and the best bet is to buy pullbacks. Wait for the S&P 500 to touch the 65W EMA and buy one of the indexes (SPY, DIA, QQQQ, IWM) using margin. Once S&P goes up by 80 points, sell some so that you are not using margin and hold the rest. Then you wait for another pullback. Your stop is 6% below your buy price.
Currently, S&P 65W EMA is at 1020.
5 comments:
Good to have u back nepali trader. Hope u had a great vacation.
The inability of S&P to close above 1100 2 times in last three weeks suggest me a correction around the corner. I see, S&P trying to get beyond 1100 today too. Let's see where it ends up today.
Last correction brought us down to 1029. Don't u think we should be looking for 1000-980 this time?
Last but not least, wish u good luck on yr new business plans. Thank u.
welcome back.. and i was actually waiting for 980 but didnt get the pull back ..
anyway i will look for 1020 for now.
i dont know if im as brave as u to margin.. but i will buy some bull call spreads.
TNB,
If you are going to be buying bull call spreads, make sure that they are atleast 3 months out. Let's say if you buy 102 and sell 106, your cost will be somewhere around $2.5 and your maximum profit will be $1.5. If you buy 1 month out your cost will be less (around 1.5)but since you are buying premium, time works against you. If you think 102 will hold, it may be better to sell 102 put and buy 98 put.
I can't understand why s&p is hovering around 1100. I was looking at those four indexes, thy are almost all 52 weeks high, Can you suggest what would be the good entry price on spy?
Anit,
We are in an uptrend. It is hard to tell whether the market will pullback to 1020 or keep on charging ahead. If your time horizon is months to years, you ca buy some now. Your stop loss will be below 95. If that is too much to risk, then wait for a pullback to 65 week MA.
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