Teknopreneur: The Magazine

The first one is the one where I really brushed up shoulder to shoulder to the tough media industry. Apparently from my short stint on the industry, only slim chance for any new players to succeed on traditional media business (that is, the old business model of print media, you provide the content and sell it). In fact, the reality that the magazine is still holding its ground (albeit at some point, struggling) is a remarkable achievement. I wish the current team well and a better year for 2008. There’s still so much potential in it that I believe with some twist on the business and delivery model, it can be a huge success for it.

There are lots of wrong that we did in this business. The one that hit us badly is the bad deal with both distributors and early advertisers. Generally we strike the usual deal with magazine distributors such as x% of our printed price will be shared among distributors and/or retailers. However in practice, there’s this one distributor that operates on one of our biggest market segment that marks up the price extravagantly. This made the magazine isn’t enticing if compared to other thicker and more established competitors.

And to make matter worse, even before that unauthorized markups, our magazine can be categorized as expensive. The business team priced the magazine to aim at BusinessWeek, Fortune, and the likes. Of course as a new magazine, the disparity between the two side is as deep as grand canyon. We don’t hold a candle in term of design, journalistic quality, and news source. Next time I believe we should start on the lower end of the price and gradually increasing it along with quality and quantity.

Final Paper

On to the next big thing, my final paper. I defend it to the panelist in May and graduated in August. The topic of discussion is how to design a better artificial neural network system to use to trade stock in equity market. The premise is from the abundance of option chain data we (the system) can disseminate a lot of information base to form a pattern. I ground this theory from the system that is used by many hedge funds in the US that manages a ridiculous amount of money and still can average a lot better than the benchmark (notably, S&P500, Nasdaq, and Dow Jones Industrial).

At the time (that is before sub-prime mortgage crisis turn to be an all-out credit crisis) I designed a system that performed better than the standard MLP system that commonly used in the industry. Of course I’m very excited because that will give me a good take-off to open my own fund management (based on neural network). But boy, am I in for a ride to the next 5 months. The very same Wall Street companies that used alteration of the model, in which has performed very good for the past several years, actually went bankrupt when volatility spikes on the market. Big guns such as Bear Sterns and Merril Lynch found that some of their hedge funds must be declared bankrupt due to the severity of the market (although they don’t really use that model to trade stock but MBS).

One thing that I regret the most about this is, I delayed stuffs too much. It took me 8 months to finish this paper when in fact, my effective time doing it is probably less than a month. This tendency-to-delay-mentality is really costing me a lot of time in 2007. This one is going to my 2008 resolutions list.

Trading

And that of course will lead us to the last big thing on 2007: my trading. I have been trading in the market for several years now but on that August, I have made a jump to trade the US options market. Shifting my focus totally and exclusively trading options and turn my back to Indonesia equity market (which have performed admirably well, up more than 50%, second only to Shanghai market I believe). Boy am I in for a rough ride. But despite all the turbulence, my performance since early August till end of December is admirably well.

While the major benchmark is pretty much flat since August (Nasdaq up 4.5%, S&P500 up 0.9%, DJ30 up 0.4%), my total portfolio value went up 280%+. I have every reason to be thankful on that kind of performance considering most of Wall Street crooks doesn’t even survive the year, although if compared to peers that trade exclusively options my return don’t actually hold waters because we have to win big in order to tolerate the risk inherited with options trading (mind you, options can be both safe and risky depending on the strategy that you use, I’m using directional strategy for aggressive capital growth).

Again, here’s the major flaw on my trading “system”: I have a lousy risk management and too impatient to wait for the buy/sell signal. How bad? Let’s just say, I reached 400% return on December but gave it all away on the last 2 weeks of the year. It’s THAT bad. I’m holding off to a position for far too long. I know when to open a position, but I found out that the hardest part is to know when to CLOSE that position. It’s a newbie mistake of course. I guess I never experienced that kind of problem in the past is because I don’t use much leverage. Now with options, everything is leveraged 2,4,5 even sometimes 10 times so any profit can be magnified by those leverages but so does a loss. I’m still working on this system of course as the lack of proper risk control already cost me 7%+ YTD, and mind you, the year has just begun! Several ideas come to mind, but I guess that’s for another blog post.

Oh, starting today, I’m going to write regularly again about the stocks that I’m watching so stay tuned late in the day

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And I also postponed the use of additional fund for my account, just putting it for fulfilling the day trading minimum requirement only, probably I’ll wait till my May portfolio account size went over 100% then I’ll consider adding additional money.

Very sorry since I can’t add anymore review lately because as I said, I have a lot to catching up and with my increasing tendency toward day trading it’s pretty hard to look for opportunities, then take the trade, then post it here. However, once the volatility in the market ceased, I promised to post more of my usual stock review :-)

Now I’m very tired (it’s Thursday morning here) and still have to drive to my parents house for the fasting season (I promised them). Last but not least, I offer you all my apologize for my wrong doings all this time. Happy Ramadhan and Happy fasting! May there’s no violence anymore on earth :-)

It’s Muhammad Yunus him self — on the way to Seoul Korea!

A very sweet closure of this whole holiday. Now back to the daily grind!

PS: I’m the one in the right with the jacket

In effect, this will make our capital market (well, US market do has a global influence) spoiled and will make even riskier bets in the future. I choose any day now another 10% drop from where we are now (or yesterday, on Thursday) than a 20% jump because of the news conference.

I’m still going to day trade the market for the next couple of weeks although we are already break the 13300 Dow Jones bearish resistance line and only MA50 now holds yesterday’s rally (or today? Good God, I really lost the track of time), basically we already out of the July-August correction range. I’m going to keep an eye on the market every time I have an open connection or get access to CNBC/Bloomberg. Gotta catch a flight, see you guys later.

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I’m not going to be around till around 10th of September (that a day after next week). 5 trading days not in front of a monitor might get me a good dose of sanity, this month made me age several years older because of the extreme fluctuation of the market (hence my account), the opportunity won’t go anywhere because there’s opportunity EVERY DAY for traders.

Can’t post my live trading session for a couple of days since due to the volatility reason (the market is CRAAAAAZY I tell ya!), it’s just very hard to do the trade and posting it on my blog at the same time. See you guys around!

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However, with Friday’s looming for Bernanke’s speech (and possible sign of a rate cut), I believe that we will see INDU test 13300 level. If it breaks, I’m going to throw more cash into the trade (currently 80% cash) still conservatively waiting for Friday’s speech. This Thursday is going to be a good day to trade ;-)

Here’s the level that INDU must break (didn’t post COMPQ’s or SPX’s chart because both already broke its short term bearish resistance):

The stock is currently down 13% from closing, so not good for my position (didn’t enter strangle or straddle — thinking that the China’s gaming industry is booming). This is so not me. I have to get back into my discipline to NOT playing earnings (or playing it from the safety net of straddle or strangle). This loss could easily shaved around 5-10% of my profit from last May (that means I’m back to my last week’s position). Darn.

I still can’t shrug off my old bad habit. When my position took a hit, I usually over trade and I over trade A LOT. And this gives my account a disadvantage especially because the commission is hiking and the trade that I made usually does mediocre at best.

Currently heavy on cash (more than 80% cash) with market neutral position (put position on XLF and call position on NYCT earning play). With a broad market down like this, it will be no surprise that we will see overnight market in Asia will get pushed down and Europe will also feel some selling pressure tomorrow at least before Bernanke speech on Friday.

On another note, I’m going on holiday starting next week so the blog will be light on capital market content. After the holiday I’m going to try scaling my trading since I’m planning to add more cash into the trading account so starting early September, I’m going to “restart” my ROI calculation relative to portfolio. Hopefully with the new cash added, I can still maintain a good 2007 performance. So far it’s 77% between February-April, and 41% from May-August. There’s a ROI calculation reset between April and May since I added more cash to the account at the time. See you guys tomorrow!

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Going to post more later, I’m just really tired for the week. See you later

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Going to go long call AAPL now, Sept 21 ‘07 125 call @ $10, filled. Average position @ $9.8. AAPL’s candle not looking good. The market is still holding though

Going to go long INTC now, Oct 19 ‘07 22.5 call @$ 2.25, filled, averaging position @ 2.2 filled

Going to go long SPWR now, Sept 21 ‘07 65 call @ $3.6, filled. Darn I can’t believe I’m impatient on this stock, again! Should’ve wait so I could get a lower fill. Averaging position @$3.8 unfilled (canceled) and @$4.2 filled — Closed all @ $4.6. Going back in @ $4.5 half.

Going to go long DIA now, Sept 21 ‘07 132 call @ $3.1, filled. I specifically took this position because until now the market can hold its ground. I might close this trade early if somehow the market retreats.

Going to go long LUV now, Sept 21 ‘07 15 call @ $0.8, filled. Oil price is just zig zagging around $70ish and lower. Unfortunately, the options isn’t too liquid. Going to take a loss here and sold @ $0.7 filled

Going to go long AMZN now, Sept 21 ‘07 75 call @ $5.3 filled — Closed all @ $5.8, not bad for a day trade.

Going to go long (a very small portion) to NVDA now, Sept 21 ‘07 47.5 call @ $2.8 filled

11AM - market is wavering…

Going to go long on FCX, Sept 21 ‘07 85 put @ $4.3 filled — Close all @ $4.4, quite nervous on this trade and probably booked too fast for profit. But hey, profit is profit no matter how small that is :-)

I’m off for today, any unclosed trade will be carried out over night. See you guys tomorrow

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I believe it’s safe to buy puts or short if PALM today can’t break a $15 price. William’s %R is still not in an oversold condition so there’s still probability for PALM to go minus for today. As usual, this is only for day trade, not sure where the market is heading since we already tried to break 13100 barrier for 3 days in a row without success.

If the first scenario panned out, I’m going to buy some DIA calls and keep it for several days because Dow still have another resistance above 13100 level (refer to this chart). If Dow is showing some weakness, I’m going to enter DIA puts for day trade. Unlike previous days, today I’m going to write my trading activity live for everyone to see.

See you at the market opening! PS: Still eye-ing for some weakness in BSC, AAPL is also on the verge to either go down or go up, today’s market action will decide

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Out from 3 trade idea that I posted here, I only execute two of them which is the solar play WFR and SPWR. I didn’t short BSC because it didn’t gap up today nor does the Dow. Out of that two, I got burned a lot by SPWR because apparently it failed to break its pretty minor bearish resistance level. Nonetheless, I’m still keeping my eyes on this stock because it can break that resistance anytime soon and will jump back and trade above its med-term bullish support.

Two impulse trade saved my portfolio today and avoid losses (I manage to get some profit for pocket change). AMZN break its 2 weeks trading range, bought Sept ‘07 75 call @ $3.9 and sold it for $4.5 (the weird thing is, the stock closed higher than when I sold the options but the closing options price is a lot lower now @ $3.4 — does the Theta sink in that fast?). And playing some quick buck on INTC (bought it when the stock hits -1.5%, sold it around -0.5%). I’m going to post more trade ideas (only for day trading — the market hasn’t trending now) later today or early tomorrow morning.

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As you can see on the chart above Dow yet again failed to pass its old trend resistance. If the market today opened below that line and tried to go green, that line will be proven a good shorting area (considering that at the time of this writing, European market is gloomy). If, however, the market opened above that gap I still believe that the opening price will still be a good shorting area just make sure you put a tight stop on all your position because we’re on a turning point here.

There’s not much of a trading opportunity here, but I will short BSC if it gapped up (only if dow failed to break its resistance). Click to enlarge

That line will be a good area to go short. Safe trading all

If you read this blog yesterday you will know that I only plan on buying FSLR and ADSK while AAPL and STP is more of an impulse buy. Impulse buy it turns out can hurt your trading performance, so always plan in advance how you want to trade the securities. Also, I liquidate almost all of my position when Dow Jones yesterday hit -60, I consider this move as Dow Jones breaking its intraday support. There’s nothing wrong with this move since I’m sticking to the plan that Dow Jones must hold 13000 or else. That prove that even if you made a right move (at least at the time), you can always make a loss in Wall Street.

All and all, I will still go with day trading in this highly uncertain market.

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If it closes in the green with a short down tail, I believe we’re on an upbeat reversal. (PS: I’m eye-ing some technology stocks, especially those that doesn’t only close in the green on Friday, but also has a green candlestick — meaning that it closes higher than it opened)

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However, after The Fed’s announcement, we can see a very big rebound which succeed a long doji the day before (my guess is, the news might already leaked and some smart money is using that to go shopping). The rebound however is rejected at its resistance level and the only way to confirm that all of the selling pressure has ceased is only when Dow can close above it’s descending triangle resistance. Anything lower than that can and will confirm the bearish move (click to enlarge).

Thursday late rally move is creating a kangaroo’s tail, a good reversal sign (in this case from bearish to bullish), but only valid if DJ30 can close between 13100-13200ish range. We’ll see about that tonight.

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From technical point of view, this is a good play short term. Click at the chart.

From my point of view, ADSK is a good long candidate if it breaks the horizontal resistance line that has been hold since last January. The second position to open in this stock will be when the stock can close above the second resistance that I drew (see the chart). That line is the old trend line support that has been a new resistance from July till September last year.

I also have a long-term play on this stock based on the big picture. Click the chart below.

Buy only when the stock close above the long term horizontal support/resistance line. That line hasn’t been breached at least since early 2005 and will confirm an ascending triangle pattern with a very high target price. Still, in this market, be prudent and be patience as always.