StockOptionSystem Blog

Core Laboratories (CLB) has a strong balance sheet and is a solid play on companies that are poised to step in and help with offshore drilling now that the U.S. ban has expired.

Based in The Netherlands, in a part of the world where many countries drill offshore (Denmark, The Netherlands, Great Britain, etc.), CLB is a leader in it’s field in providing expertise to help countries tap into their natural resources.

Strong balance sheet with an amazing 140% Return on Equity it is a company I am looking to build a core position around to take advantage of the selling panic that we have seen in the last few weeks on the global market.

Good Trading,

Billy W. 

Tags: CLB, DOW, the best stock to invest in, value investing

Hey Stock Fans!

Well, the market failed to make the year end seasonal rally that has rewarded us in the past which means that the fund managers are very worried about the sub-prime mess and are in CYA mode. Small investors are getting rammed in the face with poor returns as the market appears to be stuck in a trading range with no reason to mount another serious rally attempt.

RIMM offered a VAT setup when it exploded in price on positive reports but, sadly, has floundered and failed to reach its old highs. I took a small loss but will watch to see of it surges past its highs of the lap bar before closing the gap. If it does close the gap then I will take it off my list as a potential VAT trade.

In the meanwhile, CYA and watch for potential VAT short setups. I think we will be getting alot of them in the days to come.

Good Trading,

No tag for this post.

Hey Stock Fans!

Just a quick comment on this week’s market action and it doesn’t look good for the bulls. The market is sitting on top of a key support level (look at the two-year chart of the DOW) and if that fails then we are looking at the market taking a serious dive to the downside.

Cheap money and the lack of self-discipline is what brought us to this point where banks made money readily available to people with questionable credit and even greater questionability on people who are both compulsive and impulsive shoppers. Even in my own neighborhood (which is barely two years old), there are “For Sale” signs popping up left and right.

Short selling is the Special of the Day with emphasis on lending related companies or companies catering to the real estate market. If you go bullish on anything then make it gold but be prepared for manic rallies followed by gut-wrenching crashes at some point in the future.

I hate to write this because I can hear the “Uggghhs” of those pros who hear this all time but these things move in cycles. Like I wrote, lenders made cheap money available to people who lacked any financial literacy and/or discipline now a bubble has formed and is deflating while taking the economy down into recession.

Recessions usually take an average of nine months for us to work ourselves out of it so if you want to go value hunting for stocks during this time then go for it. I know I will.

Other than short selling some choice stocks then I say stay out of the market. I don’t care how aggressive the Fed says its going to be this is going to be a roller coaster ride with emphasis to the downside.

Good Trading,

Billy

Tags: bullish, gold, market, short selling

Hey Stock Fans!

Well, for those of you who haven’t heard, I am suspending my personal trading and have closed out all positions due to the impending arrival of my new baby girl, Grace, who will be arriving any day now. I don’t trade around big life events as it has been my experience both personally and observing other traders that it can lead to disaster. Stress is a huge factor in poor decision making and can lead to tragedy in stock option trading or select the next big momentum stock for online stock trading.

That said, there are some big developments taking place but before I get into that I wanted to respond to some questions I have been getting lately. Mainly, with all the volatility in the market sending the indices up and down ad nauseum if there are any safer alternatives for more moderate traders. I can respect the position as there are some traders with less experience who don’t necessarily know how to trade in volatile markets with option trading or trading stocks. So what safer options does one have?

Fortunately, there are ETF’s or Exchange Traded Funds which are baskets of stocks within a given niche that act as its own index. The major benefit is that it allows the trader to intelligently speculate on a sector of the stock market while reducing the volatility of owning an individual stock within that same sector. This is extremely beneficial as these ETF’s tend to trend much better without huge spikes or crashes in price.

The reason this is important for someone looking to lower there risk while putting themselves in the best position for a strong run within a sector. As fears of the subprime market begin to grow and evidence of the damage becomes more apparent in form of reduce jobs in the market, house supplies growing, home prices falling, etc. you can expect more companies to report bad earnings. Once the bad earnings reports are released or expectations for the next quarter turns sour you can expect alot of companies stock prices to implode and lose 30% to 50% or greater of there share price virtually instantly!

There are numerous ETFs to choose from and the great news is that almost all of them are carry options so that means that stock option traders can take advantage of the reduced volatility while lowering there risk even more using options on ETFs. You can even choose ETFs that are “short” ETFs on a given sector where available. The major benefit there is that you can now short the market in your IRA (Individual Retirement Account) as ETFs are approved for IRA investments!

Check out ETFs today and play with the charts and I think you will find a place for these unique and versatile instruments in your trading arsenal.

Good Trading,

Billy

Tags: ETF, momentum stock, online stock trading, Option Trading, stock option trading, stocks, trading stocks