November 28, 2011

Good morning.
As I stated, I was going to review the overnight action from the S&P 500 Futures, and review how this affects my dividend investing thoughts for the next week. Overall Market (SPX, SPY, ESH12 or ESH2): Overnight, we did not pull back that much. Moving averages are pulling up to support, as the price remains elevated. This lends me to believe that the support base of around 1147 may hold in the short term. Which means that I begin to look at companies with strong balance sheets. Again, as long as 1147 holds as a base of support. With a strong open, if anyone has any remaining hedges left over from last week, I think they should begin to be taken taken off. The hedge by this point would be more than profitable and at the very least, if it wouldn't be eliminated it should at least begun to be 'shred' out of as I explain my methodology series. Procter & Gamble (PG): I haven't talked about PG that much within the pages of this newsletter. However as I mentioned in the premiere issue, this is a stock that remains on my watchlist. With a EPS of 3.94, it's earning more at the moment than either General Mills (GIS) who has an EPS of 2.61 or Waste Management (WM) with an EPS of 2.05. Although the shares are trading with a slightly higher P/E. So what's the plan of attack? I'll watch the open of trading at 9:30 E.S.T. At the moment, Procter & Gamble (PG) has to form some sort of congestion on either the one hour chart, or even the 10 minute chart. As you can see in the chart that I have included, I have set an alert at or above $61.82. That price level will play into my decision making process. Preferably, I'd like to see some congestion form, and then buy on a break up out of any such possible congestion at around $61.82. If the market opens higher than $61.82, then I'd want to make sure that it does not gap open on me, reverse, and begin to fall all day. So shortly after the open, if the market opens than $61.82, I might wait a minute, watch the tape carefully, and then would chose to buy only if we break higher still. This still runs the risk of a gap entrance. But it's only the initial purchase. For the purposes of the AMB portfolio, I'd consider a purchase size of 4 shares, and the DRIP would be turned on immediately.

Shipping Finance Ltd (SFL): The last time I talked about this company, I stated that it could be bought with a break above $15.01 in consistent trading. I think Shipping Finance Ltd (SFL) underscores the point I was trying to make last night. Build a parameter that must be met before jumping into any position. We never reached $15.01, and then the boat anchor that I mentioned of Frontline Ltd. (FRO) dropped, and dropped hard. So it's safe to say at this point, that Shipping Finance Ltd. (SFL) can be completely taken off the board for establishing any sort of position whatsoever. Johnson & Johnson (JNJ): I'll also be watching this stock for a purchase, according to the parameters that I mentioned for Procter & Gamble (PG). For the purposes of the AMB portfolio, that would mean about 4 shares as well. The pre-market is acting rather strongly. Preferably, I'd like to see some congestion form, and then buy on a break up out of any such possible congestion at, strangely enough, the same price as Procter & Gamble (PG), that is, around $61.82. If we don't get that congestion, I would buy JNJ after the open by watching the tape carefully, and then would chose to buy only if we break higher still. Again, this is only the initial purchase. As far as trades, don't forget that I'll be watching the Lean Hogs market open. Until next time, stay safe trade well, and remember that loving other people doesn't cost a dime.
Note: The above statements should not be construed as an investment or trading recommendation. Aileron Market Balance is a newsletter that allows subscribers to look 'over my shoulder' as it were, for my own personal specific trading and investing ideas and thoughts for the next week. But they are only thoughts as of the moment of publication, and are subject to change. Any trades or investments that I discuss within this newsletter are simply my own thoughts regarding my own investing and trading outlook. Remember that entering any market is an individual decision. There is no guarantee that I will enter, or have entered any of the trading or investing ideas that I discuss in this newsletter; as larger accounts may require a different strategy as the ones presented here. This newsletter simply contains my trading and investing thoughts for the next week. I, the author do not grant this work for wide distribution beyond any single individual subscriber as this publication is protected by U.S. And International Copyright laws. All rights reserved. No license is granted to the user except for the user's personal use. No part of this publication or its contents may be copied, downloaded, stored in a retrieval system, further transmitted or otherwise reproduced, stored, disseminated, transferred, or used, in any form or by any means except as permitted under the original subscription agreement or with prior written permission. I personally only enter any market after watching and reading the tape and I trade using money management principles. The losses in trading can be very real, and depending on the investment vehicle and market, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 15 years of experience in trading and investing in these markets. The Model Portfolio accounts are hypothetical accounts,with all of the inherent problems therein, which are used within this newsletter in an attempt to track the results of this newsletter, and is run for the education of other traders who should make their own decisions based off their own research, due diligence, and tolerance for risk. Any pictures used within this newsletter are believed to be public domain. Any charts that are displayed using the ThinkorSwim platform, and other pictures were obtained through Wikipedia's public domain policy.