Monthly Archives: June 2008

Going On Vacation

I’ll be leaving for a much needed vacation starting Monday and I won’t be back till late July.  I hope all my readers sit tight and I ask any new readers to please signup for my feed (see the upper right corner of the page).  You’ll be notified of my return when I start posting again.

Have a great summer!

Ichimuko Is Out!

While its visually stunning and has some technical merit, I won’t be using the Ichimuko charting indicator to trade off of going forward from here. I probably don’t know enough about it to fully use it and will resume my breakout strategy. After three strikes, err stop outs, its out for now!

Heres yesterday’s currency trading scorecard:

  • GBPUSD: -80 Pips
  • EURUSD: – 100 pips

Forex Scorecard

I’m testing out a new Forex trading method right now using the Ichimuko charts and I’m 1 for 1 in my currency trades with a third one currently at a loss. At least my first trade was a winner!

  • EURUSD +38 pips (break out/counter trend rally)
  • AUDUSD – 25 pips (Ichimuko chart technique)
  • EURUSD still short and sitting on a 37 pip loss (Ichimuko chart technique)

Moral of this story, stop using the Ichimuko chart technique to trade off and go back to your old support/resistance line method till you got it figured out.

Going Off The Tracks With Greenbrier Company (GBX)

A long time ago, as I was searching for some good long term infrastructure plays when I came across The Greenbrier Companies (GBX). Here’s what they do, from their company overview page:

The Greenbrier Companies, Inc. (Greenbrier) is engaged in designing, manufacturing and marketing of railroad freight car equipment in North America and Europe and a provider of railcar refurbishment and parts, leasing and other services to the railroad and related transportation industries in North America.

I work in the railroad business and I believe that railroads are going to be a big business in the next few years as we try to find more efficient ways of moving freight long distances. Depsite my rosy outlook for the industry, GBX’s stock chart stinks.

It looks like the stock has been in a downtrend and last week shares were down over 7% as Greenbrier (GBX) took a big tumble on news that Ichan ended discussions with GBX on a possible “business combination” with American Railcar Industries Inc (ARII).

After I read that tidbit of news I’m staying away from both companies. When Carl Ichan gets involved, you know that there are problems with the company! Carl is a smart guy but he’s out for himself.

PS: If you ask me, GBX is probably going to test the $16.03 low back on Jan 23, 2008!

No Currency Trades Yet

My EURUSD currency limit orders haven’t triggered yet. I’m planning on going short at 1.381 but Euro seems to be bouncing back from its lows and heading higher. No matter, my order is in place for a week and if it triggers it will confirm my short-term negative bias for the Euro.

Not to miss a counter rally I decided to place a limit order to go long at 1.5464 so we’ll see how that goes this morning when the US markets open.

You have to have patience when stalking the currency markets. The right breakout can me good profits! :)

Back To Trading Forex

Although I haven’t placed a trade yet, I’m busy stalking the currency markets again. I’ve been watching the EURUSD, AUDUSD, USDJPY, and EURJPY pairs again and I’m seeing some interesting things happening. I think we’re seeing possibly trend exhaustion in the EURUSD and AUDUSD pair signaling a possibly a top.

Why do you ask? Well I think the rumors of the USD’s demise are greatly exaggerated. While I agree that the USD will remain week in the months or years to come, the collapse of the US empire isn’t going to happen when we’re all watching it. It’s going to be a BSE just when we think everything in the world is peachy keen. On top of this, Bernanke is shifting to an inflation watch so interest rates have no where to go but up. Higher rates means stronger dollar.

Still though, the trends for the Euro and Aussie Dollar remains UP and we shouldn’t fight the tape. We should be very cautious and always place our stops.

Oh Forex, How I Love Thee!

The Revolution Continues

I’m sorry to see Ron Paul has suspended his campaign for President but it was a matter of time and the odds were stacked against him. However, for the first time in my entire voting life, I truly felt a connection with Ron and his platform. Hell, I even registered as a Republican!

I’m really happy to hear that Ron has started a new organization to help get like-minded people elected to Government at all levels. Ron started the Campaign for Liberty who’s mission is:

The mission of the Campaign for Liberty is to promote and defend the great American principles of individual liberty, constitutional government, sound money, free markets, and a noninterventionist foreign policy, by means of educational and political activity. [Ron Paul's Campaign For Liberty]

I just joined and I plan on staying involved. Because of Ron, I’m actually eyeing running for local government in the next few years. We can take this country back.

Stock Market Goes On Sale

Say what you want about Robert Kiyosaki, the author of Rich Dad, Poor Dad, but he’s a smart man. I could help but laugh when I read this line from an interview with The Street.com (emphasis mine):

“I haven’t been this bullish in years,” says Kiyosaki. “What a buying opportunity. … The stock market goes on sale, and everybody runs away.”
But, he’s excited probably only for a short time.

“When the market comes back, I go back to sleep,” he says.

I too share his sentiment but I managed to pull money out near the top and buy near the market lows (I hope). As of yesterday I started my program of rotating my cash and bond holdings back into the market and plan to be 95% in stocks by December 2008.

Lehman Brothers Holdings (LEH) – The Other Shoe?

Ever since the Fed bailed out Bear Stearns a few months ago, I began to wonder who’d be the next investment bank to fold. It’s looking like the other shoe has dropped and the mystery bank is Lehman Brothers (LEH).

Now I don’t know if LEH will implode like Bear Stearns did, its desperately trying to avoid that and by selling assets to cover its write-downs, but I suspect that LEH will come out this situation extremely bloodied. Still though, Bear Stearns thought it would survive too.

No matter what happens to LEH, its a pretty forgone conclusion that a test of the low ($20.25) on March 17th is coming!

Any breaks below that low and its over Johnny.

Grading My Portfolio Risk

Reader sc suggested I check out the American Association of Individual Investors and poke through their portfolio scans and risk analysis. In the end I signed up as a member of AAII and Riskgrades to help analyze my portfolio risk for my 401k and IRA holdings.

Overall I really like Riskgrades! My initial analysis confirms what my Excel based Monte Carlo sim revealed; I’m doing a good job but I can do better and I have holes in my strategy.

Based on Riskgrades, our retirement portfolio is designated as a growth portfolio with a very low volatility relative to the S&P500; it has a beta of 0.79. My risk was reduced by 14% because of my diversification and 99% of S&P500 stocks are more riskier than our retirement portfolio. The good news is that my individual stock selections (with a few funds) are the biggest driver of my returns but my large cash position (40%) is killing my returns right now.

As I wrote in my Achieving Financial Critical Mass post, I’ll be contributing more money to our IRA’s and selecting more stocks. In our 401K’s, I’m going to start shifting our large cash positions back into the market, over the next few months, into more aggressive funds I suspect that I’ll end up holding 95% stocks by the end of this year with 5% in cash and bonds.

A Review of Emcor Group Inc (EME)

I posted my stock analysis of Emcor Group Inc (EME) on February 2/25/06 right before I went long at $24.83. It promptly decided to fill the gap and head lower but I still held on because I like the long term infrastructure play. What can I say? I’m a die hard Civil Engineer!

Well after holding on through the next 4 months, I’m sitting on a small gain of 13.8%. Nice! I goes to show you that this isn’t a stock market but a market of stocks, the trick is to select the right ones.