Archive for June, 2009

Tips on setting up a winning trading workspace

Tuesday, June 30th, 2009

Since this is a holiday shortened week and many folks have already fired up their backyard BBQs, I’ve decided to run a couple of “back-to-basics” articles. Today, I’ll be showing you some tips on how you can efficiently set up your trading workspace. This will be of special benefit to newbies, but even you crotchety old-timers might pick up a useful tidbit to chaw on.

Setting up an efficient workspace
You might be using your broker’s trading platform or that of an outside source. Although every trading platform is different, most of them offer many of the same features. Below is a basic workspace designed as a trading tool and also as a portfolio tracking tool. [Click on images to enlarge.]


This workspace is divided into windows containing quote sheets, watch lists, time & sales data, and stock charts. Let’s first focus on the top of the workspace.

Macro constituents
The top left window contains real-time data reflecting the current state of the market. The major indexes are represented here along with several indicators that measure market temperature. These indicators include the following:

The volatility index (VIX) measures the degree of fear or uncertainty in the market. Typically, if the VIX is moving higher means that the market is moving lower.

The TRIN, aka the Arms Index, looks at the strength of advancing issues relative to declining ones. An unusually high TRIN (above 2.50) is regarded as an early indication that the market is running aground and will reverse to the upside. An unusually low TRIN (around 0.5) generally indicates the opposite.

The TICK measures the number of stocks trading on an uptick minus the number of stocks trading on a downtick. The tick is an instantaneous measure of market temperature—in fact, think of it as the market thermometer. If the tick is trading on average over 1000, you know the market direction is bullish even without looking at a single chart. Conversely, if the tick is trading under -1000 (the tick is one of the very few indicators that can be negative), the market is declining. Extreme values in the tick (greater than 2500 or less than -2400) signal that the market is reaching emotional extremes and a reversal in direction is most likely to be imminent.

A candlestick graph of the S&P 500 is to the right of the market quote sheet. This is a one minute chart that tells you where the market is heading in the short term. Although the market was down overall, it closed on a relatively upbeat note. Note that if your portfolio follows Dow Industrial stocks or follows tech stocks, you might want to make your market graph track the Dow or the Nasdaq respectively instead of the S&P.

These two windows give you an immediate glimpse into the temperature of the market. The direction of the market will dictate what types of trades you should be making. Should you go long? Should you sell your positions and go into cash? Or, should you start shorting, if that’s your style?

We’ve finished looking at the macro constituents, now let’s focus on the micro constituents, that is, the stocks in your portfolio.

Micro constituents
The quote sheet labeled “My Portfolio” directly under the market quote sheet tells you the state of your portfolio. It contains the stocks (and options and futures if you trade them) that are in your portfolio. (You can have several of these quote sheets depending on how many separate portfolios you have.) At a glance, you can see how each of your holdings are faring by the P/L % column. Should one of your holdings trigger its stop/loss point (in Qcharts you can set this point), this is a signal for you to exit the position. (Many exit when a stock is down 8-10%.) How well your portfolio is doing is given in the row named Total at the bottom.

The above workspace only shows a truncated portion of the Portfolio quote sheet. Below is a copy of the extended quote sheet which shows further position details:


The window directly to the right of the Portfolio window gives information about a stock that many find useful such as the dividend yield, the ratio of stock price to earnings (P/E), and the market capitalization (the number of shares traded times the stock price).

The Time & Sales window is adjacent to that. Click on the name of a particular stock and the current sales figures will appear in that window. This is a real-time chart and you’ll be able to see by how fast it’s updating and by the trade size how popular (or unpopular) the stock is. Further information can be gleaned by a Level II quote window, but if you don’t have that, don’t worry. Unless you’re a day-trader, it’s not particularly useful.

The rightmost window is a hot list specific to my charting program. This one shows the trade rate which you can think of as a measure of a stock’s current popularity. Hot lists are ways for you to identify potential stock trades based on your own selection criteria, so if your charting program offers them, by all means take advantage of them.

The chart beneath all of these windows highlights the stock you have selected. This is where you can add studies to the chart, such as volume, moving averages, MACD (moving average convergence/divergence), Bollinger Bands, stochastics, moving average crossovers, and other indicators that you understand and that are provided with your trading platform. (“Standard” studies are included in most platforms.)

What are the best studies to use? If you’ve just decided to dangle a toe in the trading waters, my advice is to start out with a candlestick chart and volume. It’s upon these two quantities that 99% of the underlying indicators are based. They are still the most powerful ones out there. Learn how to read these well and you will have essentially mastered the art of reading charts.

Adding indicators can give further confirmation to a bullish or bearish signal. One indicator that I really like is the Commodity Channel Index, the CCI. Most indicators tend to lag the price of the stock, but the CCI is the least of the laggards and the most reliable if you set it right. Most defaults set the CCI to a 20 period average, but for best performance, you should adjust it to each stock or index you’re following and consider the time frame of your trading. Investors with longer expected holding times should consider bigger CCI parameters, such as 50.

That’s about it. Unless you subscribe to the same charting service that I do, you won’t be able to exactly duplicate this sample workspace. But with enough savvy and creativity you might be able to duplicate its spirit. Just remember that you will want your workspace to contain the same information: What is the current state of the market? What is the current state of my portfolio? And finally, how can I adapt it to fit my trading objectives?

A properly designed workspace will give you the answers to all of these questions. The day-trader’s workspace will undoubtedly look vastly different from that of a long-term investor: the elements will be the same but the time-frames and chart indicators may be worlds apart.

I hope this short tutorial will give you some guidance on how to lay out your trading workspace for maximum effectiveness. Happy trading!

High quality, high dividend stocks

Thursday, June 25th, 2009

With the market resuming its upward motion, now might be a good time to consider adding dividend stocks to your portfolio. Buying dividend paying stocks at low prices not only locks in the dividend yield at current prices but also packs the double whammy of price appreciation. To that end, I did a search on the MSN Money Central Stock Screener (free to everyone) to find high quality, high-dividend paying stocks. (The only tie I have to MSN Money Central is that it’s my home page.)

Here are my search criteria:

Stock price > $2

Average daily volume > 100,000 shares

Current dividend yield = as high as possible

Stock Scouter rating >= 8 (out of 10; based on expected 6 month return vs expected volatility. Top-rated stocks are expected to gain the most in the future with relatively less volatility. See site for more info on Stock Scouter ratings.)

I also displayed other parameters including dividend payout over the previous twelve months compared with five years ago. A twelve month figure greater than the five year figure indicates an increasing dividend—tough to do nowadays.

So, culled from the top 50 candidates and all having current dividend yields greater than 7.5%, here are my picks arranged into three tiers according to their chart technicals.

The top tier
All of the stocks in this tier are making new highs. The first two, HTS and AGNC, are making new all-time highs on better than normal volume. This is a really good sign of price continuation. The other three are making new relative highs on lower than normal volume. In this group, NZT is the only stock whose latest twelve month dividend payout is greater than its five year payout. There’s no stock where the reverse case was true because the rest of them have only been paying dividends for less than five years.


The second tier
These stocks have been in an up-trend but are currently off their highs. Many are well off their historic highs. Those whose twelve month dividend payouts are less than their five year payouts are ANH, CMO, and NI. Those whose twelve month dividend payouts are greater than their five year payouts are CTL, LFL, and O. The rest of the group has not been paying dividends for five years.


The third tier
These stocks have been trending upwards but maybe stuck in a channel or are nearing resistance. Those whose twelve month dividend payouts are less than their five year payouts are ASR, EDE and NS. Those whose twelve month dividend payouts are greater than their five year payouts are MFA, PDLI, WES, and WIN. The rest of the group has not been paying dividends for five years.



You can see that most of these fall into the traditional high-dividend stock groups: REITs, mobile communications (still a huge field ripe for M&A activity), natural gas MLPs (UNG, the natural gas ETF, looks like it’s basing and possibly rebounding), and “specialized” airports (ASR and PAC in Mexico, and LFL in Colombia).

The latter are interesting precisely because they shouldn’t be. (Money laundering, off-shore tax havens..?  Or they could just be airports with really lucrative duty-free shops.) Perhaps the subject of another article…

Please remember to do your own due diligence when selecting stocks to add to your own portfolio!

Correction (6/26/09): LFL is a Chilean airline company. It does not own any airports but it does have interests in two concession companies. My apologies for the error!

Using binary options to forecast market direction

Tuesday, June 23rd, 2009

Binary options have been around for a couple of years. There are binary options on some of the more highly traded stocks and ETFs such as Apple, Microsoft, and QQQQ. These are offered on the AMEX, but so far there are only two binaries offered on the CBOE—the SPX, the S&P 500 index, and the VIX, the volatility index.

What are binary options?
Binary options are an all-or-nothing type of bet. If the underlying instrument closes above (or below) a specified strike price at expiration, you, the option buyer, will receive $100 per call or put contract accordingly. If not, you’re only out your original investment.

Since binaries are not defined by the Black-Scholes equation, they don’t have “Greeks.” That means, you don’t need to worry about time (theta) decay nor implied volatility. For these reasons, binaries are easy to understand and to trade. (See my 6/30/08 blog for a more in-depth commentary.)

Theoretically, the price of a binary should equal the delta of the associated “regular” option. If it doesn’t, an arbitrage opportunity exists, but unless you’re a floor trader, you probably won’t be able to take advantage of it. Just another card in the deck stacked against the retail trader.

However, one thing that we, the “little people,” can take advantage of is what the binaries are telling us concerning market direction. Binaries are priced between zero and one, and because of their construction, their price at any moment represents how the investing public feels about them succeeding at expiration. Essentially, the current price of a binary option represents the probability that it will expire in the money.

VIX & SPX short-term predictions
The first chart plots VIX put binaries between 20 and 40 for the next three months, July through September. The VIX is currently trading around 30.

The second chart plots the put binaries on the SPX between 850 and 950 for the next three months. The SPX is currently trading near 900. The next support level on the SPX is 875.

[Note that the following charts reflect the average price between the bid and the ask prices. FYI, the charts for the same-strike calls are exactly the opposite.]



The chart of the S&P 500 (SPX) put binaries is telling us that right now the 875 support level is expected to hold with the SPX residing someplace between the 875 and 900 at July expiration.* This movement to slightly lower levels is confirmed by the VIX binary chart. Here, the VIX is expected to move upward, closing between 30 and 32.5 at July expiration.

After July, the situation turns more bullish. The 900 level on the SPX is expected to be reached by mid-August and essentially remain flat to mildly bullish in September. But beware! Just as in meteorology, the uncertainty in long-range forecasting increases. Expansion of the bid/ask spreads in later months reflects this uncertainty especially in the VIX binaries as the September spreads are as high as 20%.

Even after a year of being on the market, the SPX and VIX binaries are thinly traded and, in my opinion, don’t represent a very liquid playing field. However, they still can be a useful tool as a short-term predictor of market direction. As of today, the binaries are forecasting a slight bearish trend in the S&P 500 to mid-July after which it will turn around and stage a mild recovery.

We’ll see if this scenario actually plays out.

*The expiration date for SPX binaries are on the third Friday of each month determined at the market open price. VIX binaries are settled at the opening price of the VIX on the third Wednesday of each month.

For the record:  The Stock Market Cook Book would like to wish website designer and occasional article contributor, Professor Pat, a very HAPPY BIRTHDAY!

MANDA Portfolio Update

Thursday, June 18th, 2009

No changes have been made to this portfolio since 6/2 but I haven’t posted the entire portfolio in a while.  Note that there’s only five open positions. 

Wish there was more M& A activity!


[Click on image to enlarge.]

How Forever 21 is redefining retail

Wednesday, June 17th, 2009

It’s been a while since Dr. Kris has ventured into the mall and boy, oh, boy have things changed! Stores that used to be teeming with weekend fashionistas are now all but deserted. Except for one which has been stealing its competitors’ consumers: Forever 21, aka F21. And that store is up to its third-story eyeballs in clad-happy consumers grabbing handfuls of tees in differing hues from white lacquered tables marked: Camis: $2.50.

Standing in the long lines for the dressing rooms (where you’re allowed to try on well over the maximum six articles as long as you promise to hang everything back up) are not only teenagers, but their mothers AND their grandmothers. The checkout lines are just as long but it’s not as bad as it sounds because for some reason, all of the lines move very quickly, just like the merchandise.

In fact, it moves so fast that you can shop the same store once a week and see a completely new selection of merchandise. Now that’s exciting! But that’s far from being the only thing that this company is doing right. Here’s the short list:

1. Their stores are big, bright, colorful, and inviting. Just down the street, the Abercrombie & Fitch (ANF) store is anything but. This place is so dark and cavernous that one needs night-vision goggles to avoid tripping over sales associates and clothing racks. Also, is it too much to ask to turn down the volume? Playing techno-junk at 150 decibels does not make it sound better. Needless to say, I didn’t get very far into the store before I turned around and hurried out. And I wasn’t the only one heading for the exit sans shopping bag. This company seems intent on keeping customers out, and the fact that it’s stock price is trading at a 68% discount from previous 2007 highs reflects that. (Yes, all retail is down, but compare ANF with Urban Outfitters (URBN) which is only off 44%.) ANF also made a repeat appearance in this year’s MSN Money’s survey, The Customer Service Hall of Shame as being particularly irksome. I can’t imagine why.

2. F21’s clothes are not only on the cutting edge of fashion, but are very inexpensive and well-constructed considering the price. Most tee shirts retail between $2-$8; leggings start at $4.50; dresses start at $8 with the majority priced under $30; shoes are also under $30; and fun bling can be had for the price of a frappuccino. In fact, I’ve been complimented many times on a double-stranded necklace of faux jet beads that I picked up for just $7.80. (You can check out their wares on the F21 website.)

Now much has been made of F21’s practice of attending fashion shows, knocking off select pieces, and shipping them to their stores sometimes faster than the original designer is able to do. But the company is smart enough to change the style just enough to avoid copyright infringement, at least so far. (It’s been involved in a string of lawsuits.]

One store in particular that has felt the sting of being knocked off by F21 (and has sued them for it) is Bebe (BEBE). On my last retail safari, I walked into the Bebe store that is right next to F21 and it, like ANF, was deserted. What was once my favorite store now looked slightly dated, both in fashion and in floor plan. The contagious excitement of its next door neighbor was nonexistent here. This sad state of affairs is reflected in its stock chart:


Bebe has fallen almost 75% since 2007 and is not looking good at the moment. They need to get with the new fashion program or else they might find themselves going the way of the buggy whip.

3. F21 seems to listen to the needs of its customers. Realizing that while a woman’s mind might be in the forever 21 mode, her body may have other ideas, especially the ladies who haven’t seen 21 candles on their birthday cakes since the Carter administration. Sensing a need for high fashion for the BBW (big, beautiful woman), F21 is preparing to launch a plus-sized line. I’m betting that will be a huge success (no pun intended). I can’t think of any other stores outside of Wal-Mart (WMT), Target (TGT), and stores specifically catering to this group who even acknowledge that plus-sized people might want something fashion forward, too.

Other competitors
F21 isn’t the only retailer employing this fast and frugal fashion approach. Charlotte Russe (CHIC) and Swedish-based H&M both follow similar models with H&M’s probably being the closest to the F21 paradigm. Since F21 is privately held (boo!), we can’t get a look at its books, but if H&M is any indication, it’s probably doing great. H&M reported strong profits for the fourth quarter of 2008 and plans to open 255 new stores mostly in Europe and the US which will add around 7000 employees to its payroll in 2009.

It’s unfortunate that F21 isn’t publicly traded because I’d certainly be adding its stock to my equity wardrobe. I might as well get some sort of return on my investment! In the meantime, I do think that clothiers should take notice of this tornado ripping through retail for it seems to be sucking the life out of everything in its path.

Tomorrow is another WWDay

Tuesday, June 16th, 2009

I’ve been doing some research in the field (okay, I’ll come clean–I’ve been shopping, but I really needed socks) and that’s why I’ve been posting a little less than normal. But despite this seemingly banal amusement, I have been learning a lot about woman’s retail. And the picture is not nearly as pretty as the fashions on the store window mannequins.

Tomorrow, I’ll show you some dismal charts draping previously fashionable companies, and suggest how their business models should be redesigned if they are to survive in this iPod-esque paradigm of instantly wearable, inexpensive, and cutting-edge couture.

‘Til the morrow…

New website feature: The daily blue plate special

Monday, June 15th, 2009

The Stock Market Cook Book’s resident expert on Modern Portfolio Theory and ace software programmer, Professor Pat, has developed an addition to the right sidebar per my request. It’s going to be a short, mid-day feature highlighting stocks that are making new highs on strong volume, stocks that are making new lows, stocks breaking out (on strong volume) as well as those breaking down, and low-priced stocks in strong, bullish trends. Think of it as a the daily blue plate specials.

So what does this feature mean to you? Well, if you’re an active trader, you might want to check these out for short-term plays. Stocks breaking out of bases might entice the longer-term trader and investor while those breaking to new lows or breaking support might provide savory tidbits for all you hungry bears.

The stocks will be named by symbol only. Those on any short list will be either priced more than $5 (at the time of writing) as most brokerage firms will not let you short stocks under that price. If a potentially shortable stock is currently trading under $5, it will only be listed if it has options, and those stocks will be designated with a * next to their symbol.

No research is done on these issues. That, dear reader, will be left in your hands. Space permitting I might also include a thought on general market trends or note anything else of interest. Please be aware that penny stocks will not be included (unless there’s a spectacular reason why one should be), and most of the stocks I’ll mention will be trading over $2 on decent volume (generally over 150,000 shares on average).

I hope you find this feature valuable since some of these categories, especially the breaking out and breaking down ones, are something not found in too many other places, if at all. (I’m not aware of any.)

Although it’s after market hours, I’ll still post today’s blue plate specials. This is a trial run so we’ll see if the software works the first time through.

Bon appetit!

More on Cadiz’s “wet deal”

Thursday, June 11th, 2009

Several days ago I wrote an article on Cadiz (CDZI), a California-based land-holding company that just signed a letter of intent with the Golden State Water Company, California’s second largest publicly-traded water utility, plus four unnamed public municipal water agencies serving the San Bernardino, Los Angeles, Orange, and Ventura counties to develop its underground aquifer as a water-holding system to be piped into Southern California communities during times of severe drought. The 44 mile proposed pipeline project to connect the aquifer with the California aqueduct will come at a financial cost of $200 million and an as yet undetermined environmental cost.

Today, Los Angeles Times columnist Michael Hiltzik picked up on this story and expanded upon it a column appearing in the Business Section. Entitled “This deal was all wet the last time” Hiltzik reveals that Cadiz CEO, British-born Keith Brackpool, had in 1983 plead guilty to criminal charges that included dealing in securities without a license.

Indeed, Brackpool’s motives have been under suspicion by many for a long time. Quoting from an article written nine years ago, “He’s a real operator,” said Steve Erie, history professor at UC San Diego who served with Brackpool on the [Governor’s Commission on Building for the 21st Century]. “He’s shrewd, and I don’t mean that in a pejorative sense. He’s out there defending Cadiz’s interests at all times.”

We’ll see if this project goes anywhere. If, by some miracle, it does, Cadiz stands to profit by at least $500 million, assuming the estimates from a previous similar proposal are any guidelines. But the project faces major opposition from environmental groups as well as California Senator Dianne Feinstein as I mentioned in my previous article. If you’re itching to get in on a water play, I would stay away from Cadiz  because in the end it could well be the shareholders who will be the ones getting soaked.

FYI: Two new trading tools

Wednesday, June 10th, 2009

Attending financially-focused shows like the LA Traders Expo last week is a good way to not only learn new investing and trading concepts but it’s also a great way to discover and possibly test-drive new trading tools. During my stroll down Exhibit hall, I stumbled upon a couple of new tools that I hadn’t known about. I’d like to share them with my readers as you might find them to be valuable additions to your own trading toolbox.  (I’m not getting paid for this review.)

The first is This is a real-time streaming charting service that offers many of the bells and whistles of other such services but the difference is that this one is completely free of charge. Hence the name.

So, what’s the catch? The catch is that about an inch or so of the very right side of the charting display is devoted to paid advertising similar to that found on the right side of a Google search page. That’s it. Considering all of the bang you get, it’s certainly worth the minor inconvenience, at least for me.

You can personalize your chart settings: arithmetic or log scaling, bar or candlestick price plotting, black or white chart backgrounds, etc. It also comes with many of the more popular indicators including the Parabolic SAR, an indicator I like but costs extra with my expensive charting service, plus some I’ve never seen before in a charting program. Those include moving linear regression, moving VWAP, and time series forecasting. To find out what these meant, I went to their help menu and found that it is virtually non-existent. Since the site is new, I’m hoping it’s still under construction and will be finished soon.

The software also features cool drawing tools including many Fibonacci-based ones. The quad and H line tools are two that I’ve never encountered before, and am hoping those, too, will be included in the future help menu.

The program lets you look at any publicly traded US stock, ETF, or index. It also provides quotes for Canadian stocks, another something I have to pay extra for on my charting service. You can enter a stock symbol individually or you can bring up one of their watch lists categorized by ETF, industry, or index components. Now you have no excuse knowing which stocks make up the Dow 30. Another nifty feature is that these watch lists can be sorted according to price, volume, % gain, and net change. There’s another sorting tab called “Volume Buzz” but I have no idea what that is, either.

When you highlight a stock symbol, the recent news for it pops up in another window. That’s a feature my high-priced charting service doesn’t include. If you login to the service (at no charge), you can set up your own portfolios. Switching between them is easy via tabs. As with any complex piece of software, there’s a learning curve involved but I have to say that it’s worth the time to get to know it especially if you’re having problems justifying the cost of a charting service. If your trading doesn’t require the more exotic features, why pay for them?

The second one is Solaris Securities, They’re a new company primarily set up for the day-trader, but in talking with the owner–a former day-trader himself–I found that his company will work with the more traditional trader whose idea of holding a stock is for longer than five seconds. Veteran traders who don’t require the services of a full-scale online broker and frequent options traders, especially, might find their low pricing of $2 per stock or futures contract to be particularly appealing. They guarantee the best execution and order routing (call them up for further info). Day-trading equity orders are $1 and probably a bit higher for the less frequent trader, but you’ll have to call for a quote. Plus, they only require $2000 to set up a non-day-trading account. Trading is free via their web browser, but they do charge for their more sophisticated platforms.

Most likely there are other shops similar to Solaris but this was the one that was represented at the show. Their representatives were very nice and knowledgable, and they seem to provide a quality product.

The thrill of discovering new tools is just one reason to periodically attend these shows. The fun part is talking shop with other like-minded folks and exchanging trading ideas. If you’re in a trading slump (as many of us are from time to time), going to these shows is a great way to re-energize your enthusiasm. The best part is that most of them cost nothing to attend, and as you can probably tell, “free” is the operative word for me.

Author’s note: I do not have any personal or professional affiliation with any of the products mentioned in this article nor am I receiving compensation for my review (alas!). I did attend the recent LA Traders Expo as an unpaid workshop speaker.

Sell in May (or June), but don’t go away!

Tuesday, June 9th, 2009

Everyone in the financial world is familiar with the old adage, “Sell in May and go away; don’t come back till St. Leger’s Day.”* Like most of these sayings that have been around for eons, there’s probably a ring of truth to it. But being a confirmed skeptic, I decided to see for myself.

Putting the adage to the test
So, what I did was to examine the chart of the S&P 500 since 1996 looking for indications to support this theory. I found that, indeed, the market always took at least one summer dip (usually in the middle of July). Not only that, but after the dip, a rally always followed. So much for the “stay away until St. Leger’s Day” part of the proverb! Had you followed this advice to the letter you would have missed out on some important rallies.

Let’s take a closer look. Below is a chart of the dip dates and values: pre-summer dip peak, summer dip low, and post-summer dip peak. In four of the years (1998, 1999, 2000, 2006) there was a double-dip. Those generally occurred in choppy markets.


You can see that the “Sell in May” clause isn’t strictly true; some of the peaks extended into the middle of June. For those four years with two dips, the first dips generally did peak in May and found their lows in the middle of June. In all of the other years, though, the pre-dip peak occurred later, generally from the middle of May to the middle of June. The lows following those peaks occurred about a month later from the middle of July to the middle of August, although in 1997 there really wasn’t much of a dip. However, in every single case a rally ensued lasting a little over a month on average.

The next table shows the summer dip stats. (Originally, these two charts were all one table but I broke it up for space considerations.) The pre-dip peak to the summer low gave yielded almost 10% on average if one were to short the index at the peak value and cover at the summer low. It took a little over a month on average to realize this return. And if one were to turn around and go long at the summer low and hold until the next peak value, one could have realized an even larger average gain and at a lower risk, too (4.8% compared with 7.2%). Of course, these statistics represent perfect market timing which is a skill that I, for one, don’t possess.


The moral of this story is that yes, it does pay to sell sometime in early summer, but it definitely does not pay to stay away until the autumn leaves begin turning color. What does pay is to keep an eye out for that one or possibly two summer low values and ride it up for the next month or so. Maybe what the market is doing right now is putting in its pre-summer peak; the only way we’ll definitely know is when (and if!) it makes a subsequent low. When it does, then I’ll be jumping in with both feet.

*St. Leger’s Day is a horse race held at Doncaster Racecourse (in England) in the middle of September.