Posted by: ctraderd | December 23, 2012

Watchlist- Week of 12/24/12

In the third week of December, the market gained a small percentage, despite bad news released on Thursday, stating that the G.O.P. Leaders in House Pull Tax Bill, Citing Lack of Votes. Friday held bearish trading, wiping out most of the gains on the week. After the smoke had cleared, the Dow Jones Industrial Average ended up holding +14.86 for a total of +.11%, the S&P 500 gained only +11.50 for a measly +.81%, and QQQ shares closed Friday at $65.21, holding only +.42 for a total of +.65% on the week. Unfortunately, I traded like crap last week, losing $1,837.92 on the week. I tried to day trade AAPL Puts twice and lost a combined $661.13 combined with both of those trades, and my EEM options expired, accounting for $1,340.18 of this weeks losses. The bright side of this week is that I sold my 3 CAT Jan 90 Calls for a small $163.39 profit on Thursday, thankfully. I bought them back on Friday at a much lower price. See more information about these trades on my page. Before making any decisions based on this article, read my disclaimer and do your own research!!

1.) Caterpillar Inc. (CAT)

CAT lost –1.10 last week for a total of –1.24%. I sold my CAT Jan13 90 Calls early morning Thursday when I noticed that CAT was having a pullback. Thankfully I did, because on Friday, CAT fell –1.60, send my Puts all the way past breakeven. I tried to sell, but unfortunately could not get a fill. I will try to sell again when I’m green, but in the meantime, I re-bought the Jan13 90 Calls at a much lower price than the first fill. I filled 3 CAT Jan13 90 Calls at 1.30 and I have a trailing stop of $.31 set to trigger at $1.00 currently. So far on the trade, I am only down around $12 counting unrealized and realized trades.

2.) WisdomTree Japan Hedged Equity (DXJ)

DXJ gained +1.51 for a total of +4.37% last week. You’re probably wondering why I am recommending such a strange stock. Well the reason is because DXJ pretty much parallels the Nikkei 225 (Japanese Exchange) and I believe that the Nikkei 225 will jump considerably over the next few months. The reason for my thesis is because Shinzo Abe, a Japanese leader that resigned in 2007, causing the Nikkei to fall in half and the yen to bounce around 40% in value to the US Dollar, is back in control. Now that Abe is back in office, he has a plan to do what Ben Bernanke has been doing, lowering the interest rate to 0% and printing dollars, or in Abe’s case, yen. I believe that this could send the Japanese stock market up immensely, so I will buy 100 shares of DXJ tomorrow at the open. I will set a 25% trailing stop, and have a price target of $70+ sometime in 2013.


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