Dec 28, 2016

Support and Resistance.

For several years now I have had a burning curiosity about the stock market. No one has really had the time or the patience to sit down and explain and answer all my questions about it so I have gathered bits of information here and there. With the help of my father I purchased some shares of Merck and GE last year. As soon as they went above what I bought them for I sold them. Chicken out, much?

Ever since my divorce I have had a chunk of money that has needed some attention and for about 4 months now I have been making and canceling appointments with Rob at Schwab. Yes, I am thrilled beyond words that Rob and Schwab rhyme. It is the little things that delight me.

Finally, last Friday nothing interfered and I was able to keep my appointment with him. It was a rainy, gray day and my appointment was in Eugene at 10:00. Last time I met with Rob at Schwab we transferred money from some TIAA/CREF accounts into my Schwab account. But we just left it all sitting there because it would take more time than we had at that appointment to allocate it. As you all know ever since November 8th the markets have been doing nothing but going up in a weird unsupported sort of way. So the minute I sat down with Rob he started a discussion about this and about how it made him feel nervous about how fast 20,000 was approaching. It is fascinating to me to attempt to understand how much affects the price of a share of a company. I naively thought we would do some divvying up and spreading out and call it a day. But Rob (at Schwab) suggested just taking a small amount and placing it in an intelligent portfolio (the opposite of a dumb portfolio). He suggested waiting on allocating the rest of the money until February when reality may have started to settle in and the picture will be clearer. The stock market is riding on hope right now. I totally understand riding on hope I have been known to ride on hope myself. You know when you are sure change is coming, it is exciting, you are happy, and it is so welcome. Your life feels light and it is exactly like you are walking on sunshine (yes, I just quoted a song. Thanks for noticing.) I am in the process of crashing from hope so maybe the stock market will be heading down as well.

The more Rob from Schwab explained the stock market to me the more I realized the stock market is a lot like my life. I guess I had so many questions and was such a well behaved audience that he could not resist educating me more. I deeply appreciated it and cannot stop thinking about what I learned.

First he pulled up AT&T's portfolio on his computer and found a graph that gave me an overview of what their stock had been doing over the last year, He used his mouse to draw some lines on the graph in various places. Some of the the lines were marking the tops of mountains and some were marking dips. He explained to me that the tops of the mountains were called resistance and the dips were affectionately referred to as support. The stock would head down to a certain predetermined level, stop, and then turn around to get a running start back up to possibly find a new resistance point. When the stock gets to that low point that is a good time to purchase some. Sometimes the stock price would break through to make a new resistance level and sometimes it did not. Regardless the stock would predictably head back down to its support level before it tried again. If you know it is going to do this you do not have fear when you are investing.

I had just spent an entire semester studying Costco so I asked him to show me the support and resistance for Costco's stock so we switched to their graph and it was so interesting to be able to see what Costco stock had done in the past three years. I began to understand that up and down was healthy and you want to see that happening. I did not really understand that when I owned my Merck and my GE, which I sort of wish I still owned at this moment. Yes, you were right I was wrong.

If I could pull up a graph of the last three years of my life you would easily see my support level and the places where I took a running start to attempt to break through some resistance and make a change. Sometimes I broke through my resistance level and set a new high but other times I did not. I have definitely broken through to new levels as I have started school. But when it comes to relationships I seem to not be able to figure out what it takes to break through the resistance. You would be able to see the divorce crash of 2013. You would see the spikes when I got A's in school or met someone who appeared to think I was worth the time. You would undoubtedly see when I ate Reeses. When I saw a great view. When I did something wrong. Yeah, you would see it all. But the question is would you feel like it was worth it to buy shares in my life? And when would you sell?

I guess a healthy life has dips and mountains just like a healthy stock. Life steadily but slowly with lots of support and good reasons usually works its way up. Since January 2015 Costco's support is in the $140.00 dollar range and their resistance level has been around $169.00. Before that it's resistance level was around $110.00. So if you bought Costco stock years ago and was patient just imagine. It appears to be the same with life.  so the earlier you invest in me the better? Ugh, that means it is too late.

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