Here is a short list of ground rules:
- Strictly one submission per blog
- Submissions will be included in the order they are received
- The carnival will be posted on the blog on Monday, February 2nd
January 19, 2009
The Carnival of Stock Trading and Investing
Welcome to the 1st edition of the Carnival of Stock Trading and Investing dedicated to posts that cover stocks, commodities, real estate or anything related to stock trading and investing. Please submit your blog article to the next edition of The Carnival of Stock Trading and Investing using our carnival submission form.
Here is a short list of ground rules:
Here is a short list of ground rules:
January 18, 2009
Fibonacci Retracement on S&P 500
The Fibonacci retracement is very useful tool for stock traders to identify strategic places for transactions to be placed. Stocks will often pull back or retrace around a percentage of the previous move before reversing. Four levels of the Fibonacci retracements often occur, and they are usually at 23.6%, 38.2%, 50%, and 61.8%.
Let's first take a peek at the 2-year S&P 500 Chart below. From its high at 1576.09 points to the November low at 741.02 points,
1. The Fibonacci retracement of 23.6% is at 938.10 points
2. The Fibonacci retracement of 38.2% is at 1060.02 points
3. The Fibonacci retracement of 50% is at 1158.56 points
At 938.10 points or 23.6% retracement level, although the high on that day broke the level, S&P 500 closed below this level on January 6, 2009, and the short term bullish trend reversed.
At 1060.02 points or 38.2% retracement level, the S&P 500 failed to break through on Oct. 14, 2008, and the trend continued until it hit the low in November.
Let's then have a look at 3-month S&P 500 Chart below for the shorter term trends. From its November low at 741.02 points to the high on January 6 at 943.85 points,
1. The Fibonacci retracement of 38.2% is at 818.50 points
2. The Fibonacci retracement of 50% is at 842.44 points
3. The Fibonacci retracement of 61.8% is at 866.37 points
S&P 500 was not able to close below the 50% Fibonacci retracement level on the last two trading sessions. The Friday's close above might have confirmed the reversal of the down trend. Should it close below 50% retracement level, we would have to see the index re-test the 38.2% level where there were only 4 sessions closed below the level.
Generally speaking, the longer term retracement levels are more reliable compared to short term ones. Short-term Fibonacci retracement levels should be used with the oscillators and moving averages.
Let's first take a peek at the 2-year S&P 500 Chart below. From its high at 1576.09 points to the November low at 741.02 points,
1. The Fibonacci retracement of 23.6% is at 938.10 points
2. The Fibonacci retracement of 38.2% is at 1060.02 points
3. The Fibonacci retracement of 50% is at 1158.56 points
At 938.10 points or 23.6% retracement level, although the high on that day broke the level, S&P 500 closed below this level on January 6, 2009, and the short term bullish trend reversed.
At 1060.02 points or 38.2% retracement level, the S&P 500 failed to break through on Oct. 14, 2008, and the trend continued until it hit the low in November.
Let's then have a look at 3-month S&P 500 Chart below for the shorter term trends. From its November low at 741.02 points to the high on January 6 at 943.85 points,
1. The Fibonacci retracement of 38.2% is at 818.50 points
2. The Fibonacci retracement of 50% is at 842.44 points
3. The Fibonacci retracement of 61.8% is at 866.37 points
S&P 500 was not able to close below the 50% Fibonacci retracement level on the last two trading sessions. The Friday's close above might have confirmed the reversal of the down trend. Should it close below 50% retracement level, we would have to see the index re-test the 38.2% level where there were only 4 sessions closed below the level.
Generally speaking, the longer term retracement levels are more reliable compared to short term ones. Short-term Fibonacci retracement levels should be used with the oscillators and moving averages.
January 17, 2009
Financial Goals for 2009
This post is about
Goals
1. TFSA - Open a Tax Free Saving Account (TFSA) - I've put $5000 in BMO's TFSA which provides 3.00% interest with no transfer fees attached. The main purpose of this saving account is for my first home purchase down payment in next two years when the real estate market settles down. Canadian Capitalist talks about some great ideas about how to use the TFSA.
2. Emergency Fund - Build myself an emergency fund of $3600 by end of the year 2009 - this is to prepare for potential job loss, medical expenses, and/or auto repairs. Basically, I would like to be prepared when emergencies happen. My goal is to save $300 to BMO Smart Saver Account with 2.75% interest rate at present. You can read about How and Why to Start an Emergency Fund on Get Rich Slowly
3. Charity - My goal is set to donate $500 and plus 10% of stock trading profits by end of year 2009
4. RRSP - Maximize the reduction on my taxable income, and take advantage Home Buyers Plan when I decide to enter the real estate market in near future. You can find tons of RRSP Tips & Strategies on this website.
5. Saving - Save money aggressively, and take advantage of compound interest as early as possible. My goal is to put away $2000 per month including $300 monthly emergency fund contribution to my BMO Smart Saver Account which currently has 2.75% interest rate.
6. Alternative Income - Build up alternative income streams so that I am less dependent on my salary from my job. My goal for each source is,
7. Net Worth - As I mentioned in my initial net worth update, my target for this year is net worth of $90000 by end of 2009.
2. Emergency Fund - Build myself an emergency fund of $3600 by end of the year 2009 - this is to prepare for potential job loss, medical expenses, and/or auto repairs. Basically, I would like to be prepared when emergencies happen. My goal is to save $300 to BMO Smart Saver Account with 2.75% interest rate at present. You can read about How and Why to Start an Emergency Fund on Get Rich Slowly
3. Charity - My goal is set to donate $500 and plus 10% of stock trading profits by end of year 2009
4. RRSP - Maximize the reduction on my taxable income, and take advantage Home Buyers Plan when I decide to enter the real estate market in near future. You can find tons of RRSP Tips & Strategies on this website.
5. Saving - Save money aggressively, and take advantage of compound interest as early as possible. My goal is to put away $2000 per month including $300 monthly emergency fund contribution to my BMO Smart Saver Account which currently has 2.75% interest rate.
6. Alternative Income - Build up alternative income streams so that I am less dependent on my salary from my job. My goal for each source is,
- Part-time referee: $2000 (~ 40 games)
- Online survey sites: $200 (~ 100 surveys)
- Credit card arbitrage: $1600
- Dividend Income: $900
- Stock trading: $5000
7. Net Worth - As I mentioned in my initial net worth update, my target for this year is net worth of $90000 by end of 2009.
January 16, 2009
Weekly Trading Update - January 16, 2009
Positions From last week,
Horizons BetaPro US Bond Bear+ ETF: 100 shares: total cost of $1,333.95
Horizons BetaPro S&P 500 Bear+ ETF: 250 shares: total cost of $6994.95
Transactions this week,
Horizons BetaPro S&P 500 Bear+ ETF
Jan 13, sell, 250 shares @ $31.37 - $9.95 commission
Total Cost: $6994.95
Realized Gain/Loss: $7832.55 - $6994.95 = $837.6 (11.97%)
Jan 13, Buy, 400 shares @ $31.90 + $9.95 commission
Total Cost: $12769.95
Jan 15, Sell, 400 shares @ $34.88 - $9.95 commission
Total Cost: $13942.05
Realized Gain/Loss: $13942.05 - $12769.95 = $1172.1 (9.1%)
Jan 16, Buy, 300 shares @ $33.66 + $9.95 commission
Total Cost: $10107.95
Jan 16, Sell, 300 shares @ $33.94 - $9.95 commission
Total Cost: $10172.05
Realized Gain/Loss: $10172.05 - $10107.95 = $64.1 (0.63%)
Horizons BetaPro S&P 500 Bull+ ETF
Jan 16, Buy, 2000 shares @ $6.47 + $9.95 commission
Total Cost: $12949.95
Market Value: $6.45 x 2000 = $12900
Unrealized Gain/Loss: -$49.95 (-0.39%)
Trading Gain/Loss from this week: $2073.8
Year-to-date Trading Profit: $2566.3
Horizons BetaPro US Bond Bear+ ETF: 100 shares: total cost of $1,333.95
Horizons BetaPro S&P 500 Bear+ ETF: 250 shares: total cost of $6994.95
Transactions this week,
Horizons BetaPro S&P 500 Bear+ ETF
Jan 13, sell, 250 shares @ $31.37 - $9.95 commission
Total Cost: $6994.95
Realized Gain/Loss: $7832.55 - $6994.95 = $837.6 (11.97%)
Jan 13, Buy, 400 shares @ $31.90 + $9.95 commission
Total Cost: $12769.95
Jan 15, Sell, 400 shares @ $34.88 - $9.95 commission
Total Cost: $13942.05
Realized Gain/Loss: $13942.05 - $12769.95 = $1172.1 (9.1%)
Jan 16, Buy, 300 shares @ $33.66 + $9.95 commission
Total Cost: $10107.95
Jan 16, Sell, 300 shares @ $33.94 - $9.95 commission
Total Cost: $10172.05
Realized Gain/Loss: $10172.05 - $10107.95 = $64.1 (0.63%)
Horizons BetaPro S&P 500 Bull+ ETF
Jan 16, Buy, 2000 shares @ $6.47 + $9.95 commission
Total Cost: $12949.95
Market Value: $6.45 x 2000 = $12900
Unrealized Gain/Loss: -$49.95 (-0.39%)
Trading Gain/Loss from this week: $2073.8
Year-to-date Trading Profit: $2566.3
January 14, 2009
Passive/Active Index Investing
This post is about
Investing
I just don't understand the attraction to passive or active index investing ever since index investing gets so popular. The idea is simple enough; use only broad-based index funds and always stay invested. The proponents of passive investing believe that active management cannot reliably beat the market and they always have plenty of data to back up the theory.
Stock indexes have always been an indicator of the broad market movements that affects all stocks simultaneously. Mutual fund managers traditionally compare their performance against that of a stock index. Hence the term "beating the market". Around forty years ago, some very intelligent people thought it will be easier to start a fund that mimics the performance of stock indexes instead of trying to beat it.
And this was how index funds came about.
Picture Source: www.dailyreckoning.com
However, the whole deal about "investing in the market" hinges on the crucial assumption that the stock market tend to go up over time. How can we be sure that this remains true in the future?
For centuries, Europeans believed that all swans were white until black swans were discovered in Australia. Likewise, we have always assumed that stock indexes tend to rise in the long run (and hence are great long term investments) until we saw data on the recent S&P 500 and that of the Nikkei index.
Given that many economists, including Nobel Prize winners, advocate a index fund approach to stock investing, I certainty wouldn't say it's a FALSE theory.
Stock indexes have always been an indicator of the broad market movements that affects all stocks simultaneously. Mutual fund managers traditionally compare their performance against that of a stock index. Hence the term "beating the market". Around forty years ago, some very intelligent people thought it will be easier to start a fund that mimics the performance of stock indexes instead of trying to beat it.
And this was how index funds came about.
Picture Source: www.dailyreckoning.com
However, the whole deal about "investing in the market" hinges on the crucial assumption that the stock market tend to go up over time. How can we be sure that this remains true in the future?
For centuries, Europeans believed that all swans were white until black swans were discovered in Australia. Likewise, we have always assumed that stock indexes tend to rise in the long run (and hence are great long term investments) until we saw data on the recent S&P 500 and that of the Nikkei index.
Given that many economists, including Nobel Prize winners, advocate a index fund approach to stock investing, I certainty wouldn't say it's a FALSE theory.
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