Ryan The Rapper

I like to trade my portfolio,
Buying mutual funds, stocks and IPO’s.
I read the Wall Street Journal every day,
looking for the winning stocks to trade.
CNBC is the only show for me,
I like watching Jim Kramer on Mad Money.
More buyers than the sellers makes the markets rise,
never short the uptrend, it wouldn’t be wise.
Baby step positions are the way to trade,
always cut your losses if the bid starts to fade.
So when you see the futures dropping as the market opens,
Remember Baby Ryan, cause he’s the one whose shorting.
Word to your mommy!

The short of Google has yet to be initiated.We are stilling on the offer at $405 awaiting our turn. The market is still in a churn mode and I anticipate an overall down trend to continue on by midweek.Please share the blog with just one person. It will make a difference :)

Staying Alive

Wow. This can't be healthy for the market. I have been watching the major indices swinging around from positive and negative territory like a vicious tug of war between bulls & bears for the past two weeks. I am trying to “stay alive” right now by staying in cash until a true entry point develops. The moves today from -400 to + 400 is completely noise on the charts so it is just not worth trading at this point.

So I did a google on the word “Google” and I got a gaggle of trading goodies for goodness sake. I got “Excited” and yelled, “Yahoo” to celebrate my new short trading idea. I really “Lycos” this trade.

 Google posted better than expected earnings. Keep in mind that the street already lowered their forecasts so it made it easier for Google to beat the street. The stock is trading up about $35 in the afterhour’s market. The chart clearly shows it has been in downward pattern for many months. I am going to test my concept that a bear market is unbiased to its victims regardless of earnings and fundamentals. I do not need an analyst to tell me that next quarter more companies will spend less money on advertising. It is a no brainer so I am going to take advantage of the markup on GOOG and I will short 5 shares of GOOG at the open with a Sell Short limit of 405. We will also place the GTC buy to cover order simultaneously with a 350 Bid. Our stop will be set for 445. We will await our gain /loss in the next 3-5 trading days. 

 
Who in their right mind would short such a beast? Baby Trader, that's who. This is a lesson of being non committal to any company in the market place. Look at the chart above and notice  the nice rally today closed right at the 5 day moving average. This was a mild relief / oversold rally today.   The 5 day moving average  now begins to factor in lower closing points it will force the moving average to push lower and make the market fall some more.  

Bears & Bears & Bears Oh My....

Sorry I have not posted in the past two days. I had a busy schedule which included a day at Mommy & Me class where we held a round table discussion about the theory of relatively and its impact on global warming in the Ozarks. It was very boring and I could not wait to get out of the place.

I would like to thank everyone for helping Ryan Thomas Baby Trader break the 10,000 hit barrier today in exactly 30 days. At least something is going up these days. It seem like just yesterday when Lehman folded and my parents thought it would be cute to manipulate me into an alphabet block shuffling icon on Blogger. I have been extremely accurate on the entire market direction over the past few weeks which are documented throughout my blog. I would like to thank www.investingdad.com for doing a video commentary about this website. He took the time to do a conversion of how I would have done with the exact same trade but in options. Please check it out his site.

So I am sitting in cash right now waiting for the market to come back and test the lows from last week which is 7800. I actually believe 8000 was the original level that I was targeting, however due to the sudden rise in the VIX (69.5) and the incredible rally (+938) and sell off (-733) in two trading days, we will continue to sit on the sidelines and wait for our entry point. I am very bearish right here and have no reason to doubt this call. 

Do not ever put all your money into calling a bottom on the market. It would be like buying insurance on the Titanic from someone on the Titanic. It will never work. I introduce to you the concept of baby steps. Buy 1/4 of your positions if the INDU hits 8000. Then buy another 1/4 position if the INDU drops to 7500 and if we drop to 7000 you buy another 1/4 position and you are done. Keep 1/4 available for unforeseen issues. 

Here is the link to the video if the above link is not working

Baby Trader on investingdad.com website

Vote For the Sucic Family !

A call for all the Baby Trader readers to do a favor. My cousins are finalists to win a road trip with their 2 beautiful children. The youngest child has Down Syndrome which does not stop them from living a wonderful life. If they can win a free vacation, that would definitely help them relax. A simple vote is all I ask of you. Click this link to make the 1-2-3 vote.

www.parentingextras.com/familyroadtrip/sweeps_vote.php

and choose the Sucic family on the bottom right. Simply type in your email and click enter. It is that easy. If you have to sell candy for your kids school or something of this nature, I owe you the favor back and count me in for a box or two. Ryan loves those Girl Scout Samoas. A good deed always gets paid forward.

The Rally caused by the Sheep!

Well the target was 9300 and we got there in 1 trading day. That is not normal, but I shall take it. The sheep were running wild today buying up everything. Nothing has change. The market is still sick. I have moved back into cash for the near future. I expect nothing but lower highs and lower lows for the next 2 weeks until lwe have a complete retest down to 8000. Yes 8000. So I thank the sheep today for getting me out at a decent profit.

Starting balance was $2,500.Balance after today is $3,444.50

Here are all the trades that were closed out today.

A little bit of luck?

 10-13-08 4pm QUICK UPDATE :

MARKET IS UP A RIDICULOUS AMOUNT AND  I WILL BE SELLING EVERYTHING AT THE CLOSE.

We hit the target in one day 9387. A great baby trader call indeed. Moved into cash at the close. A monster trad percentage wise.

It was almost like winning the NYS Lottery. I guess I had my buddy, A Little bit of Luck on my side. I thought the entire prediction from Tuesday was quite accurate.I shall let the judge decide if the play was good. Anyways, I bought in using margin and established 8 positions based on dollar cost averages of $500 per symbol. Normally I would suggest 1/3 positions going in, but I am using money that I can afford to lose. When the market opened I executed market orders across the board and did not worry about timing the bottom. Here are the entry points. Notice the volume on the QQQQ. It was 2.5 times the daily which is a great indicator for a short term bottom.

Here is where all the stocks closed on Friday night 10-10-08

Every position is in the money, and I am in these trades for a rebound to approx 9300 on the INDU. The reason for this number is simple. Every time the INDU has had a massive collapse or capitulation such as on Friday, it pulls off a rally of approx 18% from the low point. The low was 7882, 18% of this is 1418 which brings the sum to 9300. Not need to over think this play. Just buy and hold. Yes the market can go lower, yes more negative news can affect the conditions. These are the risks of the market. 

Here are the other risks that will cost you. Never take advice from the flock. The flock loves AAPL, RIMM, and GOOG. They think these are godly stocks. They are the ones that will KO you every time. These are the people that end up going to share holder meetings in order to have their free therapy as they watch the stocks fall out of bed to levels they can't understand.

Never buy a stock that shows up on your radar due to volume increase, hot news, or an analyst upgrade. You must find 3-4 sectors that you have a passion about. I follow semi chips, video cards, video game makers and box makers. These are the only sectors I trade period. If you watch your basket of sectors every day you will be rewarded. These stocks become your children. You know when they are happy due to volume spikes in the 1st hour or trading, you know when they are sick immediately. You can simply look at them and you just know, almost innate. So you have the upper hand on the risk reward just based upon this aspect. When your stock becomes a hot stock due to new or earnings, all the sheep that see it pop up on the most active list and the news wires are about to step onto your playing field. Now you have home field advantage. That is how baby trader plays the game. This is the biggest game of mind chess in the world. Never go for the homerun and  never go off your home court, The best players in baseball get into the hall of fame for 2 reasons, base hits and averages,  rarely homeruns. If they are hitting homeruns, then they are using steroids.

So while I am not bullish on the market, I would like to see this dead cat bounce rally up to the 9300 on the INDU. Then I will move back to the sidelines and await the signals from the flock on how to play the next inning. Please share the blog with someone. I takes 5 seconds to leave a comment. These posting take me away from time with my daddy. A comment or feedback is critical if I am to continue forward with this blog. Thanks for reading and remember Sheep are very bad.

Pocket Full of Kryptonite

Well, if you read my last post from Tuesday called, "Help save the animals", you can see I was pretty accurate on the 8500 range by this Friday. No market crash is exactly the same as history has proven. Tomorrow Baby Ryan will be going long in his trading account in the form of the common stocks listed below. I expect the market of open down approx 200-250 points  and will become a buy once the INDU is down 300 points off the open. After the forced liquidations get absorb you will see the infamous CAPITULATION take place. This is a once in a lifetime opportunity to buy in at a discount better than you can find at the Christmas Tree Shoppe or Kmart. Simply buy your position, shut down your computer and enjoy the weekend.

The Vix is at 65 and moral is at zero. These are the indicators that make this market a nibble right now. Now what sectors do you buy for the future. You buy Semiconductors and Storage Management companies. Look at this list and notice that some of them are up during this massive selloff and the rest are mildly down. 


A smart play is to buy all 8 of these for 1/3 of your normal position. You now have you own mini mutual fund without all the extra lagging stocks. Regardless of how long the market takes to regain its footing, technology and storage will continue to advance. It falls under the topic of, "Who moved my cheese?" This basically states that if you sit dormant and complacent you will miss the boat. Adapt now and bitch later. You can apply this to anything in life. The new lifecycle of the market is about to begin so just get in small. I can imagine how many people sat and watched their money disappear the past month and actually have started liquidating this week. These are the sheep and sadly, sheep are abundant. Never follow the flock for they are the greatest inverse indicator within the stock market. The market always trades on emotions rather than earnings and technicals when it is overbought and over sold. 

Positions of all 8 will be acquired in lots of $500 per symbol. The final prices will be updated tomorrow night. I plan to sit in these for at least 2 weeks to maximize their discount. Please share this blog with a friend. My daddy lets me stay up late to share my views and since I can't walk he has to wait till I finish my blog to carry me into my crib. So for a reward of my time, please share the blog or just leave a quick comment below. See you on the field when the bell rings at 9:30am.

Help Save the Animals

Ryan is thinking the stock market must have had some bad Chinese food or something. It's puking all over the place....... 

When the 4 PM bell rang on Wall Street you would have though that the Dow Jones (INDU) announced a 2-1 stock split. It was that bad. Another 500 point erased on top of the 4500 points that have vanished in the past 10 months.  This is an unprecedented market that will play out in a way our economy has never seen. I met this raccoon living in a cardboard box on the grates of Grand Central Station. He told me he has a subprime mortgage that blew him out of his home. This is nothing to joke about since the biggest losers will be our parents who have been screwed out of their retirement accounts and will probably have to work longer then they have expected.

If anyone tries to call the bottom on this market they are playing the guessing game. With that said, I am a child and I love games. So I am going to guess that the market drops to 8500 on an interday fall by this Friday. I blew out of my QQQQ's for a 4 point lost -($200). Cash is king right now. Please share my website with your friends. Thanks, Ryan :)

Photo of raccoon is from www.icanhascheezburger.com Please visit their fantastic site

Avenue QQQQ

My daddy is an ass! Go buy an index, it's the best type of trade when the market is in a major downtrend. The QQQQ's were in my face by 5 sticks at one point today. They rallied back in pity and are only 3 1/4 away from cost. I feel like the market is driving the wrong way  into traffic on Aveneue Q .

While my buddy Warren Buffet is investing in the market and robbing the markets everyone is losing their shirts. Warren is trying to make some coin by buying in under his terms and screwing the shareholders. He is already down sharply on his investment, but he can at least sit on it indefinitely. This is an unprecedented marketplace that is going to take a long time to rebound.

All because of 3 letters CDS (credit default swaps)

Here is the definition of a CDS

A credit default swap (CDS) is a credit derivative contract between two counterparties, whereby the "buyer" pays periodic payments to the "seller" in exchange for the right to a payoff if there is a default or credit event in respect of a third party or "reference entity".

In the event of default in the reference entity:
The buyer typically delivers the defaulted asset to the seller for a payment of the par value. This is known as "physical settlement".
Or the seller pays the buyer the difference between the par value and the market price of a specified debt obligation. This is known as "cash settlement".

By calling the product a SWAP instead of INSURANCE, the SEC does not having the authority to regulate the product. So while the SEC is chasing down some boiler room stockbroker who is looting grandma's life savings, the big boys are looting America and leaving us to hold the bag.

I am going to ask my daddy to search for monsters under my bed before I go to sleep tonight. It was that scary today. I am hoping for a market rally, but the INDU at 9000 is a stone’s throw away.

The Little Guy

Sometimes I wonder if the market is truly accessible to the little guy.

I was in a gang years ago when gangs didn't carry guns, they carried lollipops. Lollipops are great for teething babies. That's me on the right.

The bailout has been finalized and each and every American will pay around $3,000 of our taxes to subsidize the $700 billion price tag to keep our economy afloat. Baby trader believes that each publicly listed company should have to pay a nominal amount to help contribute to this bailout. These companies can afford to make a contribution and get a tax write-off at the same time. 

Wachovia Bank with all their financial problems lingering still managed to make some nifty donations such as this check to the University of Maryland to the sum of $150,000. As we know most universities have coffers bigger than 3rd world countries and they actually invest these gifts into the stock market for bigger returns. Just for comparison this amount is equivalent to 5,000 overdrafts @ $30 per check. Banks should have more common sense with respect to honoring the shareholder's value agreement. 

Increasing shareholder value should be the first mission of all companies. I only mention all of this because I am irate that the Wachovia-Citibank marriage is already a thing of the past. Wachovia now plans to unite with Wells Fargo Bank at an 80% premium compared to the Citibank deal. So now you get $6.00 instead of $2.00. Big Deal. Why couldn't the CEO of Wachovia figure out a simpler way to create shareholder value instead of allowing this company pummel to the single digits. 

If you want to know more about the lollipop kids and what we have been up to since the Wizard of Oz please click on this link below. It is all about the little guy aka Munchkins. It is hilarious!

Click Here for Ryan's Favorite Video

Gophers and Golfers

This is a list of some very high ranking portfolio managers, CEO's and directors who work on Wall Street and have very low handicaps on the golf course. Amazingly 1/3 of these companies have since fallen from grace in the form of bankruptcy, mergers or take under. 

If you have the time to play golf where your handicap is this low you should not be managing any money. How can these money managers fulfill their fiduciary responsibilities to investors when they are playing golf during market hours?  

Here is a quote from #29 on this list of golfers.
Many were reluctant to discuss their devotion to the game. "Wall Street is paranoid about golf," says Stephen Worth, a five-time club champion at The Creek Club in Locust Valley, N.Y., and a managing director at the investment firm Evercore Partners. "I think it's because our customers expect us to be available 24/7, and you can't play golf with a cell phone or BlackBerry."

Uh.. shouldn't the people that you trust to manage your life savings be reachable during market hours? Is this too much to ask? What do they have a Blackberry for, to make their tee times? Obviously many people have been duped into mortgages and loans that they were never capable of managing, however; as a consumer & investor it is imperative to do your own due diligence on the people that you blindly trust to control your money.

Still long 50 shares of QQQQ @ $38.00. The market was down sharply, yet financials  held strong and UBS  and regional banks were actually up. Crude dropped to $93 which is now $54 from the highs 3 months ago. A bottom is trying to form in the market. Baby trader's instinct says a quick test and dip under 9,800 on the Dow should be a solid entry point for buy and hold.