Week Two Results

	Wiggle Room Range
	Buy Price	Sell Price
BZ	$ 1.85	$ 2.20
GBNK	$ 1.90	$ 2.20
IGOI	$ 0.65	$ 0.75
CMRG	$ 2.00	$ 2.25
SSP	$ 2.00	$ 2.25
LCC	$ 2.65	$ 2.95
FRE	$ 0.72	$ 0.80
FOH	$ 0.68	$ 0.75
LVLT	$ 1.07	$ 1.18

 

BZ and SSP hit their buy price, but have not made it to their sell price yet. So I own $1000 each of those.

This week's numbers:

Week Ending	Stock	Invested	Sold	Fees	Net Profit
06/19	SSP	$1000	PENDING	$10	-10
06/19	BZ	$1000	PENDING	$10	-10
06/12	LCC	$1000	PENDING	$10	-10
06/12	FRE	$1000	PENDING	$10	-10
06/12	FOH	$1000	PENDING	$10	-10
06/12	LVLT	$1000	$1102	$20	82
06/12	GBNK (1)	$1000	$1157	$20	137
06/12	GBNK (2)	$1000	PENDING	$10	-10
	Profit to Date				$159

Step 2 – Finding the Wiggle Room

Now that I had my list I pulled up the charts for the last 10 days of trading. I noted the 10 day high and low prices, then eyeballed the chart to determine where I thought the wiggle room laid. No scientific statistical methods for me! I noted the wiggle room and then calculated what the profit would be if I bought at the bottom of the wiggle room and sold at the top of the wiggle room. I was only interested in stocks where I could make 10% or more in the wiggle room. This narrowed my list down to my top nine stocks.

These top nine are the stocks that I am going to use in my simulation over the next few weeks, to see if the system works or needs more tweaking.

	Last Ten Days		Wiggle Room Range		Potential
	Lowest Price	Highest Price	Buy Price	Sell Price	Per Share Profit in Wiggle Room	Percentage Profit in Wiggle Room
BZ	$ 1.59	$ 2.51	$ 1.85	$ 2.20	$ 0.35	18.92%
GBNK	$ 1.53	$ 2.45	$ 1.90	$ 2.20	$ 0.30	15.79%
IGOI	$ 0.60	$ 1.32	$ 0.65	$ 0.75	$ 0.10	15.38%
CMRG	$ 1.60	$ 2.60	$ 2.00	$ 2.25	$ 0.25	12.50%
SSP	$ 1.77	$ 2.58	$ 2.00	$ 2.25	$ 0.25	12.50%
LCC	$ 2.41	$ 3.20	$ 2.65	$ 2.95	$ 0.30	11.32%
FRE	$ 0.82	$ 0.71	$ 0.72	$ 0.80	$ 0.08	11.11%
FOH	$ 0.68	$ 0.75	$ 0.68	$ 0.75	$ 0.07	10.29%
LVLT	$ 1.05	$ 1.24	$ 1.07	$ 1.18	$ 0.11	10.28%
MGI	$ 1.45	$ 1.60	$ 1.46	$ 1.60	$ 0.14	9.59%
MSN	$ 0.61	$ 0.75	$ 0.65	$ 0.71	$ 0.06	9.23%
BSET	$ 1.95	$ 2.65	$ 2.20	$ 2.40	$ 0.20	9.09%
UIS	$ 1.28	$ 1.64	$ 1.40	$ 1.52	$ 0.12	8.57%
PIR	$ 1.75	$ 2.14	$ 1.90	$ 2.06	$ 0.16	8.42%
CNO	$ 2.30	$ 2.85	$ 2.45	$ 2.65	$ 0.20	8.16%
ETFC	$ 1.33	$ 1.56	$ 1.40	$ 1.51	$ 0.11	7.86%
PLA	$ 2.60	$ 3.39	$ 2.75	$ 2.95	$ 0.20	7.27%
EK	$ 2.48	$ 2.92	$ 2.60	$ 2.78	$ 0.18	6.92%
DYN	$ 1.87	$ 2.43	$ 2.05	$ 2.18	$ 0.13	6.34%
FRZ	$ 1.75	$ 2.00	$ 1.79	$ 1.90	$ 0.11	6.15%
FNM	$ 0.68	$ 0.78	$ 0.70	$ 0.74	$ 0.04	5.71%
AIG	$ 1.45	$ 1.74	$ 1.60	$ 1.69	$ 0.09	5.62%
RMX	$ 2.64	$ 3.00	$ 2.72	$ 2.85	$ 0.13	4.78%
OWW	$ 2.04	$ 2.48	$ 2.32	$ 2.42	$ 0.10	4.31%
BFLY	$ 1.15	$ 1.32	$ 1.19	$ 1.24	$ 0.05	4.20%
ALU	$ 2.41	$ 2.84	$ 2.60	$ 2.70	$ 0.10	3.85%
AEZ	$ 0.85	$ 1.56	No wiggle room
BBI	$ 0.69	$ 1.11	No wiggle room
FLWS	$ 2.25	$ 2.85	No wiggle room

Step 1 – The List of Potential Wiggle Room Stocks

The first thing that I did was get a list of all NYSE and NASDAQ stocks with a current price (I did this on June 7^th) of $3 or less. Then I went through the list and pulled out the companies that I had ever heard of before.

This got me down to 29 potential stocks:

Playboy (PLA)

US Airways (LCC)

Ready Mix (RMX)

Eastman Kodak (EK)

Conesco (CNO)

1-800-Flowers (FLWS)

Alcatel-Lucent (ALU)

Bassett Furniture (BSET)

Casual Male Retail Group(CMRG)

EW Scripps (SSP)

Boise Inc (BZ)

Orbitz Worldwide (OWW)

Guaranty Bancorp (GBNK)

Dynegy (DYN)

Pier 1 Imports (PIR)

Reddy Ice (FRZ)

American International Group (AIG)

Unisys (UIS)

MoneyGram (MGI)

Etrade (ETFC)

American Oil and Gas (AEZ)

iGo, Inc. (IGOI)

Bluefly (BFLY)

Level 3 Communications (LVLT)

Blockbuster (BBI)

Fannie Mae (FNM)

Fredericks of Hollywood (FOH)

Emerson Radio Corp (MSN)

Freddie Mac (FRE)

My Stock Selection Criteria

My selection criteria are really simple at this point:

1. The stock should be less than $3 per share – this may change as I have more money to invest.
   
2. I must have heard of the company before – this may change as I learn more about the stock market.
   
3. It must have easily identifiable wiggle room over the last 10 days of trading. Stocks that are going straight up or straight down are not targets for me.
   
4. Wiggle room has to be at least 10% - my current investing goal.
   
5. It must be trading on the NYSE or NASDAQ – no pink stocks.
   
6. (New one added after a week of looking at the charts) It must have reasonable trading volume. I am not sure how to define that at the moment, but will define it better as we go. For right now, if trading volumes are listed in the "thousands" instead of the "millions" or there was any time during the last two weeks where it showed no trading going on, I am going to take it off my list.

What is Wiggle Room?

Wiggle Room is the regular variance that a stock has from day-to-day, week-to-week. It isn't the big highs or deep lows. It is that sweet spot in the middle where a stock hovers. For example, if you look at Freddie Mac stock (FRE), over the last month it has had a range of about 71 cents to 90 cents per share. Most days it has been between 72 and 82 cents per share. That 10 cent range is what I call "Wiggle Room".

My goal is to make ten percent on my money in a short period of time, and do this over and over and over again. If I can make 10% on my money eight times, I will have doubled my money. If I double my money thirteen times, I can retire.

If I bought 1000 shares at 72 cents per share, and sold it at 82 cents per share, I would make $100 on my $720 investment. Then I have to take out etrade's fees of $10 to buy and $10 to sell, so I wind up with $80 profit which is about 11%. Cool. Hopefully the stock hits both prices, the buy and the sell price, in relatively short order.

One thing that really helps me to believe that I can do this is the fact that I can set my price, enter my buy orders or sell orders "Good for 60 Days" and just walk away. Whenever the stock hits the price, the order will get executed. I still plan to check the stocks every day, but the stress of missing the opportunity or getting "off-plan" is not something that I have to deal with every minute of every day.

I am sure there is some professional investor term for this approach, but like I said in my earlier post, at my age I don't really care all that much what the rest of the world does. This is what I am going to do.

Off we go...

I keep hearing that these are the times that the seeds of millionaires are planted. I believe that to be true with every ounce of my being. Opportunities like those we are seeing today are truly once in a lifetime. Major investment vehicles available to Americans are currently marked down at below "Clearance Sale" prices.

Real estate prices are at rock bottom and there is some serious money to be made there. For people who have enough money to "buy and hold" or for those who want to become landlords, now is definitely the time to get the deals. My husband I recently used these market conditions to buy our dream house, a 1920s historical home in a small Texas town. The renovations and improvements that we are doing on our house will take us (translation, us = my husband) the next five years to complete, so getting into real estate investing at this point is just not in the cards right now. We have all the real estate we can handle.

As I have watched the roller coaster stock market charts in the last six months, I keep remembering my crazy Day Trader friends back in the 1980s who always preached about the wiggle room within normal stock market fluctuations. As I watched them back then, I thought about how stressed out they always seemed - constantly checking the market, consumed with its every minuscule turn or dip or bounce - and I decided that sort of thing was not for me. I did not have the stomach or the time to do what they did.

Fast forward 20-something years:

Something happens when a woman hits 40. She magically loses all of the insecurities of her twenties and the "I must achieve superwoman-hood" fantasies of her thirties. At forty, she is a happy, confident, inspired woman who doesn't really care about what other people think. This is where I have arrived. What a joyous place!

So, when I start thinking about how much I love my life and my family, I inevitably wind up thinking that I would like to retire sooner than later so that I can just enjoy them. This always takes me back to my stock market wiggle room thoughts. It is like this nagging feeling that I have missed out on what could be an important piece of my future.