The FEDS babble is announced today. It's possibly already priced into the market, and it's in HOW the FEDS tell us what they WILL do in the future that defines how the market will long term respond.
Bernanke is in a tough spot, and will probably have to act like Volcker did in, and be careful to not CREATE inflation. The USD has risen in the past few days around what the FEDS may announce.
We suggest we'll whipsaw trades, tops, and bottoms. In what order....who knows, as the market is now driven by FED fear.
"All eyes are trained on the Fed's policy statement on Wednesday to see how strongly it hints at a pause in the easing cycle after an expected 25 basis-point rate cut to 2.0%," said Sal Guatieri, economist at BMO Capital Markets.
Economic data, meanwhile, may reveal that the U.S. economy is in a recession. On Wednesday, first-quarter gross production data may reveal the economy already has contracted. On Friday, investors expect jobs data to reveal another big drop in payrolls in April."
5/1 – First trading day in May, Dow up solidly 7 of last 9
T Bonds have had higher total returns than stocks in five of the last eight years.
Large stock cap stocks will show the most value investing over the next year.
The market is at its first level mechanical. When the S&P500 futures trades over a calculated fair value for any specific definition of time the floor and institutional traders are selling the futures contracts, and buying the underlying stocks.
Want to truly study the market, and learn stocks with us? It's this kind of information and fact we teach in www.bluechipoptions.com
And, to help us all study, a few testimonials:
From B in Indonesia: “Floyd, as today Dow (is) playing on the baseline, and Bush live speech didn’t do anything, (I thought) I'd better write to you...
Remember below email from me in early 2008?
Yesterday, I just paid OEXoptions for the 2nd time, for the following May subscription. (Subscriber is Level 2, paying monthly, began subscription in April)
For the April trading I got back ALL my last year Loss only in one month..under your guidance..plus 50 % more profits .. with just only 1 or maximum 2 OEX contract I played...
Reason I play with only 1 or 2 contract(s) ...
- This is the test drive. I should learn your way, your writing style.. and to get used with market mechanism
- the most important is My money management is only allowed me to play with 1 or 2 contract(s) , which I know, in the future along with my growing account, I can adjust (with) more contract(s). Best regards - B
(and B’s earlier email he referenced above) …
“I am rather interested to join your service, however still have some questions to ask
I'm new and still learning, read a lot of books and view dvds
but no success in trading. I started option trading for $ 2250 in Optionxpress, and go up to $4500 in 2 months, but after that being wiped by the market, leaves me about $ 350
Floyd - You began trading too soon, in our minds. We teach paper trading for at least 90 days.
I never subscribed to any advisory service cause, all forum and blog said it's only sucking my account ... , however I still want to try one...which also give me some education in trading..., "not only give a fish every day".
Floyd - This is very true for most services. We teach how to trade, and are an educational service.
As I had only small amount of money, Is it appropriate to start again for about $3500, (because from what I read, better investment is about $5000?
One more question about low investment start … $3500 can it cover monthly subscription fee... ?
Floyd - We suggest trading with a minimum of $5000.00, and "paper trading" first for a period of 90 days
From another Trader in Colorado: “2 scalp trades on the put signal today following S1 R1 and recalculated R1 S1. In @ 8.30 out @ 10.20 - In @ 8.20 out @ 9.20. Continue to take quick profit when available. 12 in a row! Will not trade tomorrow. Let FOMC babble settle and revisit Thursday.”
Wednesday, April 30, 2008
Tuesday, April 29, 2008
The Real Unemployment Rate is 12 Percent!
The real unemployment rate is 12%. The official unemployment rate is under 5%. The real rate includes workers who are part-time, or marginally attached, and discouraged workers, all true definitions that the government really has, and monitors. But, instead, we track the “official” rate. When the true rate of 12% is analyzed we can begin to see what the economy really is. If we are able to also track the percentage of American workers earning minimum wage we can begin to see the real effect on the American economy, and how much of the wealth is “with the few.” The former Clinton administration led the “twisting” of unemployment numbers, and this was also led carefully by Greenspan.
Opacity is a Scrabbles word, but becoming much more real to economists as they analyze the collateralized debt obligations (CDO’s) around financial institutions. CDO’s have opacity, where their hyper-technical securities were fraught with dishonest labeling, or inflated values.
These false facts also hold true with the Gross Domestic Product (GDP) and many economists now argue that the recessions of 1991 and 2001 were much longer and deeper than reported. In fact, there were downturns/recession in 1985 and 1995 that weren’t even counted because of how facts were manipulated, and in 2008 we continue to watch the government argue whether we are really even in a recession.
So, if the real numbers show unemployment from 9 to 12%, an inflation rate that is really 7 to 10%, concerned voters and citizens should be considering WHY this data is not accurately reflected to us. Some economists rightly believe that the government re-calculation and suppression of this key data could hugely affect us.
For every dollar of income earned the average German saves 10% of it. For every dollar of income earned in the U.S., it appears we buy a $7500.00 plasma screen TV.
Floyd thinks credit card debt will be our next "exposure" of fraud, and be more long lasting on its effects on our financial institutions. It will be hard to get the FEDS to be our enforcers, however, as they are doing really well with the FEDS own credit card, our U.S. Treasury.
Also, a number of responses for poor trader “S” that is leaving us, one which I think articulates well how we trade:
"Floyd, I'm a structural engineer with a masters degree, I work full time in an office.
My rules for trading:
I read your update 3 or 4 times before I open my real time charts.
I do my OEX and Dow Pivot, Support and Resistance levels, then put all the information on the charts especially the Dow Projections.
I know what the PF chart levels are.
I have a watch list of quotes that include the recommended option the opposite and few others around the recommended.
I do not buy first thing in the morning, for obvious reasons, usually wait till after 10:30.
I put multiple buy orders at different levels starting small at the 1 line and larger at the 2 and 3 lines.
When filled I look to sell quick, depending on how large of a trading range the market is moving in.
I've made profit from scalping $0.50 and $1.00.
I used to look to make money on the entire move, now I just take profits from a small part of the move.
As soon as my buy orders are filled,
1/3 to 1/2 sell $1.00, another partial at 20%, and a smaller partial for a homerun, subject to change depending on market conditions and my tightness of my sphincter (sp).
Since employing my 50 cent and dollar profit taking I've notice a more calmer trading day, and a larger trading account. I have 2 accounts and since I've been with your service, I've had my ass handed to me in December and January and made it all back and more in Feb, March and now April. One account is a rollover IRA, is up 40% since the end of February when I started trading it. The other account is a smaller account that up 100% since February.
One last thing, if I haven't had a chance to look over everything, I DON'T TRADE!!!!!! I Don't Chase!!! Keep up the good work. Regards,” B
Positions could have been taken yesterday on the May640P, at 7.70.
The May 630C was not available at best buy for a new position, but remains open, hitting a high of 21.20
Straddle traders in advance of the FEDS babbles today and tomorrow...remember, it may be necessary for a larger second buy on both positions, and QUICK sell orders put in for tight profits.
And for a bit more fun, an email from Trader B on the trades 4/28:
"Floyd: Waited till this afternoon to trade the OEYQH.
buy filled 100 @ 7.9 time 3:06pm, multiple orders
sell filled 75 @ 8.5 time 3:30pm
sell filled 25 @ 8.9 time 3:54pm
$7k in less than an hour. Nice way to start the week."
Lastly a note from trader RA…
“In the May 640p @ 7.90 out @ 8.80. Quick 11% in 1 hr! Figured take the profit and run. Why stay in overnight with FOMC babble tomorrow. 10 in a row!”
For traders wanting clarification on our alerts, here's step #2:
2. Study the market conditions (News, economic calendar events, price of oil, gold…are all catalysts that lead the OEX and DJIA directionally.)
Upcoming Events/News: http://www.bloomberg.com/markets/ecalendar/index.html
(Stocks react to news irrationally. Each morning, study the news.)
Futures: http://bloomberg.com/markets/stocks/futures.html
(Futures help you gain a “read” on market sentiment and how the market will open. Use futures, in addition to reading the tape (9:32 and 9:35 am close of Dow reading) and the pivot point for that day)
Studying Fibonnaci:
Fibonnaci lines help us draw a retracement, the support or resistance areas where prices are likely to stop and reverse back to the direction of the trend. These areas can be 61.8%, 50%, and 38.2% from the nearest high of 100% or from the nearest low of 0%
Fib advocates see that any percentages above 100% are either extensions or projections of the likely price targets. Fib lines are drawn from the recent high and low, retracing back 50%, and proceeding to a projection of 127.2% and 161.9% from the 50% line.
Floyd's Question of the Day: There are 20% of Americans that continue to think Bush is doing a good job. Why? :)
The tax rebates are on their way. The economy will burst out now and all is well:)
Opacity is a Scrabbles word, but becoming much more real to economists as they analyze the collateralized debt obligations (CDO’s) around financial institutions. CDO’s have opacity, where their hyper-technical securities were fraught with dishonest labeling, or inflated values.
These false facts also hold true with the Gross Domestic Product (GDP) and many economists now argue that the recessions of 1991 and 2001 were much longer and deeper than reported. In fact, there were downturns/recession in 1985 and 1995 that weren’t even counted because of how facts were manipulated, and in 2008 we continue to watch the government argue whether we are really even in a recession.
So, if the real numbers show unemployment from 9 to 12%, an inflation rate that is really 7 to 10%, concerned voters and citizens should be considering WHY this data is not accurately reflected to us. Some economists rightly believe that the government re-calculation and suppression of this key data could hugely affect us.
For every dollar of income earned the average German saves 10% of it. For every dollar of income earned in the U.S., it appears we buy a $7500.00 plasma screen TV.
Floyd thinks credit card debt will be our next "exposure" of fraud, and be more long lasting on its effects on our financial institutions. It will be hard to get the FEDS to be our enforcers, however, as they are doing really well with the FEDS own credit card, our U.S. Treasury.
Also, a number of responses for poor trader “S” that is leaving us, one which I think articulates well how we trade:
"Floyd, I'm a structural engineer with a masters degree, I work full time in an office.
My rules for trading:
I read your update 3 or 4 times before I open my real time charts.
I do my OEX and Dow Pivot, Support and Resistance levels, then put all the information on the charts especially the Dow Projections.
I know what the PF chart levels are.
I have a watch list of quotes that include the recommended option the opposite and few others around the recommended.
I do not buy first thing in the morning, for obvious reasons, usually wait till after 10:30.
I put multiple buy orders at different levels starting small at the 1 line and larger at the 2 and 3 lines.
When filled I look to sell quick, depending on how large of a trading range the market is moving in.
I've made profit from scalping $0.50 and $1.00.
I used to look to make money on the entire move, now I just take profits from a small part of the move.
As soon as my buy orders are filled,
1/3 to 1/2 sell $1.00, another partial at 20%, and a smaller partial for a homerun, subject to change depending on market conditions and my tightness of my sphincter (sp).
Since employing my 50 cent and dollar profit taking I've notice a more calmer trading day, and a larger trading account. I have 2 accounts and since I've been with your service, I've had my ass handed to me in December and January and made it all back and more in Feb, March and now April. One account is a rollover IRA, is up 40% since the end of February when I started trading it. The other account is a smaller account that up 100% since February.
One last thing, if I haven't had a chance to look over everything, I DON'T TRADE!!!!!! I Don't Chase!!! Keep up the good work. Regards,” B
Positions could have been taken yesterday on the May640P, at 7.70.
The May 630C was not available at best buy for a new position, but remains open, hitting a high of 21.20
Straddle traders in advance of the FEDS babbles today and tomorrow...remember, it may be necessary for a larger second buy on both positions, and QUICK sell orders put in for tight profits.
And for a bit more fun, an email from Trader B on the trades 4/28:
"Floyd: Waited till this afternoon to trade the OEYQH.
buy filled 100 @ 7.9 time 3:06pm, multiple orders
sell filled 75 @ 8.5 time 3:30pm
sell filled 25 @ 8.9 time 3:54pm
$7k in less than an hour. Nice way to start the week."
Lastly a note from trader RA…
“In the May 640p @ 7.90 out @ 8.80. Quick 11% in 1 hr! Figured take the profit and run. Why stay in overnight with FOMC babble tomorrow. 10 in a row!”
For traders wanting clarification on our alerts, here's step #2:
2. Study the market conditions (News, economic calendar events, price of oil, gold…are all catalysts that lead the OEX and DJIA directionally.)
Upcoming Events/News: http://www.bloomberg.com/markets/ecalendar/index.html
(Stocks react to news irrationally. Each morning, study the news.)
Futures: http://bloomberg.com/markets/stocks/futures.html
(Futures help you gain a “read” on market sentiment and how the market will open. Use futures, in addition to reading the tape (9:32 and 9:35 am close of Dow reading) and the pivot point for that day)
Studying Fibonnaci:
Fibonnaci lines help us draw a retracement, the support or resistance areas where prices are likely to stop and reverse back to the direction of the trend. These areas can be 61.8%, 50%, and 38.2% from the nearest high of 100% or from the nearest low of 0%
Fib advocates see that any percentages above 100% are either extensions or projections of the likely price targets. Fib lines are drawn from the recent high and low, retracing back 50%, and proceeding to a projection of 127.2% and 161.9% from the 50% line.
Floyd's Question of the Day: There are 20% of Americans that continue to think Bush is doing a good job. Why? :)
The tax rebates are on their way. The economy will burst out now and all is well:)
Monday, April 28, 2008
Study the Economic Calendar
Study the economic calendar carefully. It's a week of data, and opinion. The FOMC boys babble Tuesday and Wednesday. Many believe the considerations of the FEDS are often now factored into the market, but no matter what, it's likely to show two way volatility.
What if we all truly understood that the rising cost of pensions, benefits, borrowing and interest rates were exposed with real data? Interest rates would soar, and the public and private debt that has been building so hugely, bolstered up in the recent past by the housing bubble, would be even more exposed.
Meanwhile, we discuss whether Obama understands the American people, or whether McCain believes democracy in the Middle East is our long term responsibility.
All is not as it appears, and it’s on purpose.
The U.S. uses 7.6 billion barrels of oil each year. There are 4.3 billion barrels of oil in North Dakota and Montana that could be retrieved using current technology, according to a new survey by the U.S. Geological Survey. This amount is 25 times as big as the original estimate in 1995. On first review the reader will say “ we get the oil from our country!, but on a closer look one realizes that we would deplete all of these oil reserves in one year, strip mining the states, and only provide 56% of one year of our usage.
This is truly how a false fact can be “retrieved” easily by a gullible public, and only analysis of the fact proves the logic behind it.
30% of all employees nationwide do not sign up for their employer's matching 401K plan.
We'll start the week with several commentaries from subscribers, all unsolicited. First, when a subscriber leaves we always ask why. There are three reasons almost always given for a cancellation:
1. I will come back when I'm ready, with capital. I like the service.
2. Not what I expected. I do not have the time to watch the market, and want just buy and sell signals.
or, something like this from a subscriber:
"In a nutshell, I couldn’t understand with a decent level of confidence, how (to) trade in a ‘Floydian way’. Note that I studied both websites for many weeks, have years of options trading experience, am an editor and technical writer, and have a MCS in computer science as well as a PhD in psychology. I found the writing on the sites indicative, yet it didn’t give me adequate guidance in the procedures and decision making. I almost offered to rewrite it so that I could eventually understand better." S
And at the same time, these comments from subscribers came in:
"Floyd: Nice call today. OEYQK. Had buy orders in 15 at 16.4
Put a sell order out for 10 at 17.4 filled, bought 15 more at 16.4 after the 10 were filled at 17.4
And 20 at 15.2
Sell orders all filled
5 at 18.4
10 at 17.4
20 at 16.8
5 at 16.5
Net $6,250 in 3 hours. Net $4,400 on Monday OEYQH that was purchased on Friday ‘- BD
"Hello, Floyd. Man, you are incredible. I'm serious. I don't know how much of an ego you have (if any)... but wow! That's all I can say. I am amazed at how close to today's top you called the May put. Unbelievable. You do it constantly all the time, which is absolutely amazing to me. Please tell me that with what we learn from you we will one day be as good as you? :-)
S and I scalped 4 contracts twice off the entry price of today's alert for $800.00 today alone and we still have one option hanging for tomorrow. I honestly, in my heart of hearts, hope to be as good as you one day... I mean that, Floyd. You deserve all the accolades you get for all the people you help learn this stuff and as good as you are. Thank you, and I sincerely mean that.
As you asked from my email yesterday, I attached the chart I made my error on. There are a couple circles drawn on it for reference. Please review it and my explanation below in blue and teach me what I did and didn't do right or wrong here. I have my own assumptions but I do not know if they are correct or not. Thank you, Floyd”. - DS
"Already bought and sold the put (16.20-18.80). Still think market has room to top to dow projections. Waiting it out for now. Do you have any open positions?
Simply scary how you chose that call this afternoon. I could not get in
until 18 because I missed the 16 window. Did you get that strictly from
support and resistance subsets?
Wow! 9 profitable in a row just following signals, support/resistance and dow projections. Learning to keep it simple and take profits when available. Bought the mid-day signal and averaged nearly 20% profit on sale of all partials."
There is a lesson in the above. No matter what the education or background, I do not believe any trader could learn our work "in a few weeks of study". I believe despite being an "editor" or "educated" that the subscriber canceling needs my help in explaining the lack of complexity in our alerts, and although S may be leaving, I'll be outlining section by section over the next few weeks just what each of our 8 steps means. Sorry to lose you, S!!!
What if we all truly understood that the rising cost of pensions, benefits, borrowing and interest rates were exposed with real data? Interest rates would soar, and the public and private debt that has been building so hugely, bolstered up in the recent past by the housing bubble, would be even more exposed.
Meanwhile, we discuss whether Obama understands the American people, or whether McCain believes democracy in the Middle East is our long term responsibility.
All is not as it appears, and it’s on purpose.
The U.S. uses 7.6 billion barrels of oil each year. There are 4.3 billion barrels of oil in North Dakota and Montana that could be retrieved using current technology, according to a new survey by the U.S. Geological Survey. This amount is 25 times as big as the original estimate in 1995. On first review the reader will say “ we get the oil from our country!, but on a closer look one realizes that we would deplete all of these oil reserves in one year, strip mining the states, and only provide 56% of one year of our usage.
This is truly how a false fact can be “retrieved” easily by a gullible public, and only analysis of the fact proves the logic behind it.
30% of all employees nationwide do not sign up for their employer's matching 401K plan.
We'll start the week with several commentaries from subscribers, all unsolicited. First, when a subscriber leaves we always ask why. There are three reasons almost always given for a cancellation:
1. I will come back when I'm ready, with capital. I like the service.
2. Not what I expected. I do not have the time to watch the market, and want just buy and sell signals.
or, something like this from a subscriber:
"In a nutshell, I couldn’t understand with a decent level of confidence, how (to) trade in a ‘Floydian way’. Note that I studied both websites for many weeks, have years of options trading experience, am an editor and technical writer, and have a MCS in computer science as well as a PhD in psychology. I found the writing on the sites indicative, yet it didn’t give me adequate guidance in the procedures and decision making. I almost offered to rewrite it so that I could eventually understand better." S
And at the same time, these comments from subscribers came in:
"Floyd: Nice call today. OEYQK. Had buy orders in 15 at 16.4
Put a sell order out for 10 at 17.4 filled, bought 15 more at 16.4 after the 10 were filled at 17.4
And 20 at 15.2
Sell orders all filled
5 at 18.4
10 at 17.4
20 at 16.8
5 at 16.5
Net $6,250 in 3 hours. Net $4,400 on Monday OEYQH that was purchased on Friday ‘- BD
"Hello, Floyd. Man, you are incredible. I'm serious. I don't know how much of an ego you have (if any)... but wow! That's all I can say. I am amazed at how close to today's top you called the May put. Unbelievable. You do it constantly all the time, which is absolutely amazing to me. Please tell me that with what we learn from you we will one day be as good as you? :-)
S and I scalped 4 contracts twice off the entry price of today's alert for $800.00 today alone and we still have one option hanging for tomorrow. I honestly, in my heart of hearts, hope to be as good as you one day... I mean that, Floyd. You deserve all the accolades you get for all the people you help learn this stuff and as good as you are. Thank you, and I sincerely mean that.
As you asked from my email yesterday, I attached the chart I made my error on. There are a couple circles drawn on it for reference. Please review it and my explanation below in blue and teach me what I did and didn't do right or wrong here. I have my own assumptions but I do not know if they are correct or not. Thank you, Floyd”. - DS
"Already bought and sold the put (16.20-18.80). Still think market has room to top to dow projections. Waiting it out for now. Do you have any open positions?
Simply scary how you chose that call this afternoon. I could not get in
until 18 because I missed the 16 window. Did you get that strictly from
support and resistance subsets?
Wow! 9 profitable in a row just following signals, support/resistance and dow projections. Learning to keep it simple and take profits when available. Bought the mid-day signal and averaged nearly 20% profit on sale of all partials."
There is a lesson in the above. No matter what the education or background, I do not believe any trader could learn our work "in a few weeks of study". I believe despite being an "editor" or "educated" that the subscriber canceling needs my help in explaining the lack of complexity in our alerts, and although S may be leaving, I'll be outlining section by section over the next few weeks just what each of our 8 steps means. Sorry to lose you, S!!!
Friday, April 25, 2008
Richard D Wyckoff
From DY – “Hey Floyd! Nice Alert...Got in May655P @$15.50 and sold @$17.70. Everything looked really good to hold position open to tomorrow but I decided not to be greedy! Thanks again”
The Dow projections are key. Yesterday we advised that the highest top would be 13,110, with a top at 13,050 likely. At intraday highs the market hit a theoretical Dow top of 12,982.
Although upside remains likely around the upcoming FEDS announcement next week there is a good chance that upside is already being priced into the market.
No real news that is triggering upside is that good. We see this as a good, but perhaps short bull run. Early afternoon we issued an alert for the May655P, and were able to buy at 15.60 and less in less than 15 minutes. This is a first position buy to a contrary hedge currently ITM that we'll hold prior to the FOMC announcement, and look for several types of profits. It was fun to watch, as the position hit sellable highs of 18.40 within an hour:)
Calls may still have upside, and we'll begin a buy on an OTM May call soon, noting yet again we believe this is an overall very high risk trading market.
I was trained by a Father that was trained by Richard D. Wyckoff, the famed 1920's Wall Street trader. Dad taught me much of "the composite man," and within all my studies, and proudly cynical views of how the market is typically studied, so much reverts to Wyckoff. Investors Business Daily (IBD) and William O'Neils great book How to Make Money in Stocks is all based on Wyckoff.
Further, take the time again to study a bit of Floyd's use of Fibonnaci retracements. Some traders in our Advanced Mentoring service are working with us now on using Fibonnaci extension levels. We use 138%,150%, 161.8%, and 200% as extensions in comparison with the classic Fib retracements.
The Dow projections are key. Yesterday we advised that the highest top would be 13,110, with a top at 13,050 likely. At intraday highs the market hit a theoretical Dow top of 12,982.
Although upside remains likely around the upcoming FEDS announcement next week there is a good chance that upside is already being priced into the market.
No real news that is triggering upside is that good. We see this as a good, but perhaps short bull run. Early afternoon we issued an alert for the May655P, and were able to buy at 15.60 and less in less than 15 minutes. This is a first position buy to a contrary hedge currently ITM that we'll hold prior to the FOMC announcement, and look for several types of profits. It was fun to watch, as the position hit sellable highs of 18.40 within an hour:)
Calls may still have upside, and we'll begin a buy on an OTM May call soon, noting yet again we believe this is an overall very high risk trading market.
I was trained by a Father that was trained by Richard D. Wyckoff, the famed 1920's Wall Street trader. Dad taught me much of "the composite man," and within all my studies, and proudly cynical views of how the market is typically studied, so much reverts to Wyckoff. Investors Business Daily (IBD) and William O'Neils great book How to Make Money in Stocks is all based on Wyckoff.
Further, take the time again to study a bit of Floyd's use of Fibonnaci retracements. Some traders in our Advanced Mentoring service are working with us now on using Fibonnaci extension levels. We use 138%,150%, 161.8%, and 200% as extensions in comparison with the classic Fib retracements.
Thursday, April 24, 2008
The ridiculous...
Just for fun, I thought I would share the ridiculous:
"Chief executive officers in the financial-services industry think the economy is in or will soon be in a recession, but they believe the Federal Reserve is handling the credit turmoil fairly well.The Financial Services Forum, a group of 20 CEOs of financial-services companies doing business in the U.S., Friday released a survey that shows chief executives are increasingly pessimistic about the economy's prospects. Respondents on average placed the likelihood of a U.S. recession at 88%."
It's good to hear these brilliant businesspeople, leading an industry led by GREED, and false financials, and they are now predicting a recession. Emperor Bush is still analyzing a "soft economy", and defending a war that has cost us more than we can imagine. These are the leaders that we follow, those that hedge funded even wealth accounts (Citi), and literally hit bankruptcy sell off (Bear Stearns).
Elect smartly. Do not listen to false facts, rhetoric, or more importantly, "happy thoughts". We are in a recession, and have been since October of last year.
Sigh.
Today we are attaching an 18 page study in our Blue Chip Option password protected area, Floyd's Cheat Sheet on using point and figure charting. This is a simple "book" of how to chart.
Study. You are who you decide.
We're hitting a true stride in profitable trades right now and are thusly suspicious of ourselves:). We count 21 for 22 trades profitable and strong results at www.bluechipoptions.com All this means is that Floyd's methods do work, be patient and learn and study.
The market yesterday moved right with Floydian logic, hitting our Dow tops, allowing May630C profits from buys at 14.70 yesterday to highs of 18.40 before noon. At OEX 640 we saw retracement to 635, right to our support lines, and allowed astute day traders to....
“Floyd, bought 630C again. Sold it at 17.90 in the a.m., from a 14.70 buy yesterday, bought it again at 14.70 this afternoon and just sold for 16.30 You are on a serious roll. I've hit 22 straight trades with you, unheard of and I even kind of understand this stuff more now. Thanks”-GW.
"Chief executive officers in the financial-services industry think the economy is in or will soon be in a recession, but they believe the Federal Reserve is handling the credit turmoil fairly well.The Financial Services Forum, a group of 20 CEOs of financial-services companies doing business in the U.S., Friday released a survey that shows chief executives are increasingly pessimistic about the economy's prospects. Respondents on average placed the likelihood of a U.S. recession at 88%."
It's good to hear these brilliant businesspeople, leading an industry led by GREED, and false financials, and they are now predicting a recession. Emperor Bush is still analyzing a "soft economy", and defending a war that has cost us more than we can imagine. These are the leaders that we follow, those that hedge funded even wealth accounts (Citi), and literally hit bankruptcy sell off (Bear Stearns).
Elect smartly. Do not listen to false facts, rhetoric, or more importantly, "happy thoughts". We are in a recession, and have been since October of last year.
Sigh.
Today we are attaching an 18 page study in our Blue Chip Option password protected area, Floyd's Cheat Sheet on using point and figure charting. This is a simple "book" of how to chart.
Study. You are who you decide.
We're hitting a true stride in profitable trades right now and are thusly suspicious of ourselves:). We count 21 for 22 trades profitable and strong results at www.bluechipoptions.com All this means is that Floyd's methods do work, be patient and learn and study.
The market yesterday moved right with Floydian logic, hitting our Dow tops, allowing May630C profits from buys at 14.70 yesterday to highs of 18.40 before noon. At OEX 640 we saw retracement to 635, right to our support lines, and allowed astute day traders to....
“Floyd, bought 630C again. Sold it at 17.90 in the a.m., from a 14.70 buy yesterday, bought it again at 14.70 this afternoon and just sold for 16.30 You are on a serious roll. I've hit 22 straight trades with you, unheard of and I even kind of understand this stuff more now. Thanks”-GW.
Wednesday, April 23, 2008
Watching Drops in the Market
April, 1999, was the first month ever to gain 1000 Dow points
WATCHING DROPS IN THE MARKET
The ten largest one-day drops of 2007 have averaged 326 points. In 2008 this appears to be averaging closer to 456 points.
If the average one-day drop is 326-350 points, a cyclical downturn may now be averaging just over 600 points. The large one-day drop tends to be more than the entire cyclical downturn.
Whipsaw begins whenever the market begins upward moves of over 100 points. Typically there is a large burst UP, a slight retracement, and then upside that averages 170 points from the lowest downside. The total move UP, after the whipsaw begins is a call bias that can upside 450 points overall.
If the market drops 326+ points, and after it has dropped further, typically up to 600 points, the first buying is now 100 points or more. The first upswing may be hesitant, over a day and half, but then average 170 points.
As the market rises deduct 50% to 60% from the overall rise. (If the market has moved up 150 points, it’s 75.) Wherever the Dow is right then is a place to potentially buy a call - between bid/ask.
Ex: After a drop, the market is at 13,820. It rises 150 points. 13,820+150=13,970. When the market moves back 75 points (half of the rise), or to 12,895 it’s a good call entry spot.
Assuming the trader buys at 13,890 during this whipsaw period we would add the first day of the initial drop (the 326 to 350 point moves) and 170, where the upswing average.
Ex: We are buying at 13,890. 326 +170 = 496 points. Using averages we’re then suggesting the top of the market might now be 14,386.
This same formula is what we’re now studying with all large market moves. It’s used in conjunction with support and resistance and ATR. ATR, on large swing days, should be recalculated intraday.
From an Advanced Mentoring client:
"Floyd,
Your commentary in the OEX alert was well overdue. Thank you for finally saying something....and saying it loud and clear. I got so tired of dealing with many of the OEX subscribers that I talked with via IM (along with others that we both know) blaming you instead of taking responsibility for their trades. And now you are on a streak of 19 of the last 20, and where are these guys? Still churning and wishing they had stuck it out!
Taking responsibility has been key along with learning. REALLY taking the time to LEARN has been key and has changed everything for me. Finally fun again. BTW, great profits on the puts!
Thanks," - S
Yesterday the market bottomed at 12,616, and may have an additional 100 points of downturn. Whipsaw and "bets" historically now trade the market in advance of next week's FOMC meeting.
We took first entry to the May630C at 14.70 first buy. We'll not continue to trade the put and will issue an intraday alert if conditions change.
WATCHING DROPS IN THE MARKET
The ten largest one-day drops of 2007 have averaged 326 points. In 2008 this appears to be averaging closer to 456 points.
If the average one-day drop is 326-350 points, a cyclical downturn may now be averaging just over 600 points. The large one-day drop tends to be more than the entire cyclical downturn.
Whipsaw begins whenever the market begins upward moves of over 100 points. Typically there is a large burst UP, a slight retracement, and then upside that averages 170 points from the lowest downside. The total move UP, after the whipsaw begins is a call bias that can upside 450 points overall.
If the market drops 326+ points, and after it has dropped further, typically up to 600 points, the first buying is now 100 points or more. The first upswing may be hesitant, over a day and half, but then average 170 points.
As the market rises deduct 50% to 60% from the overall rise. (If the market has moved up 150 points, it’s 75.) Wherever the Dow is right then is a place to potentially buy a call - between bid/ask.
Ex: After a drop, the market is at 13,820. It rises 150 points. 13,820+150=13,970. When the market moves back 75 points (half of the rise), or to 12,895 it’s a good call entry spot.
Assuming the trader buys at 13,890 during this whipsaw period we would add the first day of the initial drop (the 326 to 350 point moves) and 170, where the upswing average.
Ex: We are buying at 13,890. 326 +170 = 496 points. Using averages we’re then suggesting the top of the market might now be 14,386.
This same formula is what we’re now studying with all large market moves. It’s used in conjunction with support and resistance and ATR. ATR, on large swing days, should be recalculated intraday.
From an Advanced Mentoring client:
"Floyd,
Your commentary in the OEX alert was well overdue. Thank you for finally saying something....and saying it loud and clear. I got so tired of dealing with many of the OEX subscribers that I talked with via IM (along with others that we both know) blaming you instead of taking responsibility for their trades. And now you are on a streak of 19 of the last 20, and where are these guys? Still churning and wishing they had stuck it out!
Taking responsibility has been key along with learning. REALLY taking the time to LEARN has been key and has changed everything for me. Finally fun again. BTW, great profits on the puts!
Thanks," - S
Yesterday the market bottomed at 12,616, and may have an additional 100 points of downturn. Whipsaw and "bets" historically now trade the market in advance of next week's FOMC meeting.
We took first entry to the May630C at 14.70 first buy. We'll not continue to trade the put and will issue an intraday alert if conditions change.
Tuesday, April 22, 2008
When a New Trader Begins
When a new trader begins with us I watch carefully for their emails and questions. Although at first I may not "know the subscriber", or the person's issues, soon, within the subscription period I can begin to recognize the type of trader. Who are you? Here's a type of trader setting themselves up to fail, and that will not last:
*Does not read any of our password protected material/manual or articles.
*"Browses" the rules and Floyd thinking
*Immediately begins trading, waiting for the signal provided, and writes right away with questions on the first trade that begins to go the wrong way
*Begins questioning "bad advice" or "why did you say it sold profitably, when I could not sell it"
*Loses a great amount of money quickly, and gets angry
*Makes a great deal of money, is ready to become a full time trader and quit their job because it's so "easy", and then loses three times their original gain and is devastated and says "option trading is not for me"
*Tries us for 30 or 60 days, says "it isn't what I expected" and quits
Is this you? If it is, you are at fault, and you will fail. You will fail at any stock or option trading method or system you try, and you will always blame others.
Stock and option trading is a high level skill that over 80% of individual investors fail at, and always it is the trader's fault. If this were easy:), everyone would do it.
This is a high level skill that can be learned, but must be learned....not simply traded.
You are who you decide.
Investors in today's market must carefully study our bell curve analysis count.
Seldom before have 300 point moves occurred two or three times in a week. There really are only four movements taking place: 1. Oversold 2. Overbought 3. Clear bias 4. Limited flat bias
Puts were profitable to 14.70 from Friday's buy. Calls were available at best buy and could have sold to highs of 3.60. We'll leave both signals open for today's trading.
*Does not read any of our password protected material/manual or articles.
*"Browses" the rules and Floyd thinking
*Immediately begins trading, waiting for the signal provided, and writes right away with questions on the first trade that begins to go the wrong way
*Begins questioning "bad advice" or "why did you say it sold profitably, when I could not sell it"
*Loses a great amount of money quickly, and gets angry
*Makes a great deal of money, is ready to become a full time trader and quit their job because it's so "easy", and then loses three times their original gain and is devastated and says "option trading is not for me"
*Tries us for 30 or 60 days, says "it isn't what I expected" and quits
Is this you? If it is, you are at fault, and you will fail. You will fail at any stock or option trading method or system you try, and you will always blame others.
Stock and option trading is a high level skill that over 80% of individual investors fail at, and always it is the trader's fault. If this were easy:), everyone would do it.
This is a high level skill that can be learned, but must be learned....not simply traded.
You are who you decide.
Investors in today's market must carefully study our bell curve analysis count.
Seldom before have 300 point moves occurred two or three times in a week. There really are only four movements taking place: 1. Oversold 2. Overbought 3. Clear bias 4. Limited flat bias
Puts were profitable to 14.70 from Friday's buy. Calls were available at best buy and could have sold to highs of 3.60. We'll leave both signals open for today's trading.
Monday, April 21, 2008
Events Will Trigger Movement
This is the same URL to the economic calendar we include in the morning alert:
http://www.bloomberg.com/markets/ecalendar/index.html
Astute traders with our service STUDY our alerts, and KNOW that events will trigger movement.
The market moved up in pure euphoria on Friday, showing why old Floyd could not read the market. Good old Google, a holding we have in Blue Chip Options (www.bluechipoptions.com) had excellent earnings, yet again displacing the "experts" opinions, while Citi showed 5.1 billion in losses, yet less than analysts had projected, and the market skyrocketed.
In early afternoon risk traders followed a new alert for a first buy at 12.20 or less to the May 640P, with buys made immediately at 11.70, and possible sales to 13.70 within two hours.
Astute traders took tight profits and ended the week with another nice gain. If you bought, and missed this gain, remember two things:
1. Our sell prices are recommendations of TOP sells. Always look for taking fast profits. Where else could one return $3.00 a contract, 25% returns, in less than two hours?
2. There is ALWAYS a chance to buy again.
Never fear, if you bought this higher risk trade...there will be time, as although it's likely now for more upside in the short term, all is not well, things are not better, and we are merely in an "upturn" cycle.
"Hey Floyd, Nice alert! Got in the May640P at $11.60 and sold at $13.30. didn't want to hold open over the weekend. Thanks.” - D
"Joined Level 3 four months ago. Paper traded for 90 days. I have profited over $9k in the past month, and after finding you realized that I've spent way too much money in the past buying signal services and failing. You are truly a mentor, feel free to use me as a reference. Thanks” -B
Now, is this a bull market rally, OR a bear market rally? The key question. Floyd remains suspicious. There is no real REASON for the rally. Fundamentally, nothing has changed. From a technical standpoint, Mike Gibbons, the Hawaii breakout trader analyst, says it well:
"The markets gapped-up at the open twice this week (Wednesday and Friday) and delivered accumulation days on each of them. A gap up often indicates a bullish change in sentiment so it’s possible that this week marks a real turnaround. Another indication that there may be mood shift is the number of breakouts seen this week. The successful breakout count jumped to 30 after just 12 last week and an average of 14 over the last 13 weeks. This was the highest number of breakouts for the year. The average gain by these breakouts until Friday's close was 5.15% compared the gain of 4.9% for the NASDAQ Composite, 4.8% for the Russell 2000, 4.3% for the S&P 500 and 4.3% for the DJI.
Friday's gains were significant but constrained by resistance at 2419 for the NASDAQ and 1396 for the S&P 500. We commented two weeks ago that the major indexes were on the point of a double-bottom breakout and that remains true for the NASDAQ, S&P 500 and Russell 2000 while the DJI, led by energy stocks, did close above its pivot this week. Due to the influence of energy on the DOW this breakout is suspect until the broader market follows-through. A breakout above the respective pivots for the other two indexes would be a further indication that the current rally has legs. We would like to see higher volumes though. NASDAQ and Russell 2000 volumes have been anemic and have barely reached the 50 day average even on accumulation days. DJI and S&P 500 volumes have only been marginally better"
http://www.bloomberg.com/markets/ecalendar/index.html
Astute traders with our service STUDY our alerts, and KNOW that events will trigger movement.
The market moved up in pure euphoria on Friday, showing why old Floyd could not read the market. Good old Google, a holding we have in Blue Chip Options (www.bluechipoptions.com) had excellent earnings, yet again displacing the "experts" opinions, while Citi showed 5.1 billion in losses, yet less than analysts had projected, and the market skyrocketed.
In early afternoon risk traders followed a new alert for a first buy at 12.20 or less to the May 640P, with buys made immediately at 11.70, and possible sales to 13.70 within two hours.
Astute traders took tight profits and ended the week with another nice gain. If you bought, and missed this gain, remember two things:
1. Our sell prices are recommendations of TOP sells. Always look for taking fast profits. Where else could one return $3.00 a contract, 25% returns, in less than two hours?
2. There is ALWAYS a chance to buy again.
Never fear, if you bought this higher risk trade...there will be time, as although it's likely now for more upside in the short term, all is not well, things are not better, and we are merely in an "upturn" cycle.
"Hey Floyd, Nice alert! Got in the May640P at $11.60 and sold at $13.30. didn't want to hold open over the weekend. Thanks.” - D
"Joined Level 3 four months ago. Paper traded for 90 days. I have profited over $9k in the past month, and after finding you realized that I've spent way too much money in the past buying signal services and failing. You are truly a mentor, feel free to use me as a reference. Thanks” -B
Now, is this a bull market rally, OR a bear market rally? The key question. Floyd remains suspicious. There is no real REASON for the rally. Fundamentally, nothing has changed. From a technical standpoint, Mike Gibbons, the Hawaii breakout trader analyst, says it well:
"The markets gapped-up at the open twice this week (Wednesday and Friday) and delivered accumulation days on each of them. A gap up often indicates a bullish change in sentiment so it’s possible that this week marks a real turnaround. Another indication that there may be mood shift is the number of breakouts seen this week. The successful breakout count jumped to 30 after just 12 last week and an average of 14 over the last 13 weeks. This was the highest number of breakouts for the year. The average gain by these breakouts until Friday's close was 5.15% compared the gain of 4.9% for the NASDAQ Composite, 4.8% for the Russell 2000, 4.3% for the S&P 500 and 4.3% for the DJI.
Friday's gains were significant but constrained by resistance at 2419 for the NASDAQ and 1396 for the S&P 500. We commented two weeks ago that the major indexes were on the point of a double-bottom breakout and that remains true for the NASDAQ, S&P 500 and Russell 2000 while the DJI, led by energy stocks, did close above its pivot this week. Due to the influence of energy on the DOW this breakout is suspect until the broader market follows-through. A breakout above the respective pivots for the other two indexes would be a further indication that the current rally has legs. We would like to see higher volumes though. NASDAQ and Russell 2000 volumes have been anemic and have barely reached the 50 day average even on accumulation days. DJI and S&P 500 volumes have only been marginally better"
Friday, April 18, 2008
Too Many Compliments
Yesterday the market hesitated again because reality set in. Our profits have been solid 17 of the last 18 trades, and we've hit all Dow projections.
So many compliments have come from subscribers that I know the risk is higher. By this I mean that the bias is now so unclear I am now guessing, and when I begin to do this, I know the risk is higher, and our chance of loss greater.
Friday is historically more of a down day. It's not wise to hold a May option over the weekend with time erosion, and I personally am uncomfortable recommending any new trade.
Our higher risk call trade yesterday was profitable for an average of 1.50 a contract, but very light trading, and only for traders watching the market carefully.
Interesting commentary from a new Level 3 trader says this well:
"I could have bought at $6.80 and sold at $8.70 at day’s end, though you are right probably wouldn’t have waited til day’s end.
Doesn’t it make more sense for us “still little guy” investors to NOT trade in a “non-bias” tight market like today and wait for better more-indications markets to be more sure. . . . ?
If I would have bought 2 contracts today and risked $1300 I would have made $150.
I made $500 on ALY while I watched. . . . Asking.” - R
And, from a day trader:
"Hit 1.50 on the call, and got out but the market simply too flat. I'm out"-PW
Sorry, all, but it's time to fish. No new trades yet.
So many compliments have come from subscribers that I know the risk is higher. By this I mean that the bias is now so unclear I am now guessing, and when I begin to do this, I know the risk is higher, and our chance of loss greater.
Friday is historically more of a down day. It's not wise to hold a May option over the weekend with time erosion, and I personally am uncomfortable recommending any new trade.
Our higher risk call trade yesterday was profitable for an average of 1.50 a contract, but very light trading, and only for traders watching the market carefully.
Interesting commentary from a new Level 3 trader says this well:
"I could have bought at $6.80 and sold at $8.70 at day’s end, though you are right probably wouldn’t have waited til day’s end.
Doesn’t it make more sense for us “still little guy” investors to NOT trade in a “non-bias” tight market like today and wait for better more-indications markets to be more sure. . . . ?
If I would have bought 2 contracts today and risked $1300 I would have made $150.
I made $500 on ALY while I watched. . . . Asking.” - R
And, from a day trader:
"Hit 1.50 on the call, and got out but the market simply too flat. I'm out"-PW
Sorry, all, but it's time to fish. No new trades yet.
Thursday, April 17, 2008
Good Old Euphoria
Ahh, good old euphoria. Everything is better now:) The bulls began the run. Nervous traders that bought with us last Friday on the May 620C were finally able to sigh with relief, as the option went right to our top projections for over a 60% return, selling to highs of 19.20.
It does not matter what took the market up, or what the talking heads will say. Astute traders knew already that the market was potentially near a bottom from our Dow projections, and that there were several possible moves up.
Yesterday we hit 12,675, above our midrange 12,560 top, and below our 12,780 higher top. Upside could well now continue, but just as soon as we've read what every talking head and child financial analyst has to say the market will shift again, and we'll hit new lows.
Nothing is better, and nothing has changed. It's simply in how the market breathes.
"Floyd, I have learned to not even think about what the news says,and I religiously follow your projections on the Dow, recalculate the support and resistance lines, and keep my emotions out. I'm profitable now 17 of your last 18 recommendations.”
JP, Denver
"My winning streak continues. It’s been nice. I now understand my issue was not trading, it was my belief about money. Now that I am trading 1 or 2 contracts at a time, I have no problem holding for profits and letting things come to me. When I was trading 40 contracts I was always on edge and eager to preserve that which I thought I had. Now I just need to work on my belief that its OK for me to make lots of money, and its no different trading 1 contract than it is 100. I will continue trading and learning. I did actually play the put on the time prior to this that you said you missed. I just used the same concepts you have taught and just felt within that range that we were due for some downturn. I am also now looking to take entry into the put soon as we are now midway through the DOW projections. Thanks for the knowledge."
-Trader PC, Advanced Mentoring
What's next? With the count now biased irrationally to the call market moves upturn could continue, based on whatever "news" and "earnings" affects the market. Thusly, the market remains very high risk to trading.
Our higher risk put trade recommended earlier this week was sold profitably Monday and Tuesday. Traders should NOT have taken inventory in this signal in yesterday's trading if watching futures.
It does not matter what took the market up, or what the talking heads will say. Astute traders knew already that the market was potentially near a bottom from our Dow projections, and that there were several possible moves up.
Yesterday we hit 12,675, above our midrange 12,560 top, and below our 12,780 higher top. Upside could well now continue, but just as soon as we've read what every talking head and child financial analyst has to say the market will shift again, and we'll hit new lows.
Nothing is better, and nothing has changed. It's simply in how the market breathes.
"Floyd, I have learned to not even think about what the news says,and I religiously follow your projections on the Dow, recalculate the support and resistance lines, and keep my emotions out. I'm profitable now 17 of your last 18 recommendations.”
JP, Denver
"My winning streak continues. It’s been nice. I now understand my issue was not trading, it was my belief about money. Now that I am trading 1 or 2 contracts at a time, I have no problem holding for profits and letting things come to me. When I was trading 40 contracts I was always on edge and eager to preserve that which I thought I had. Now I just need to work on my belief that its OK for me to make lots of money, and its no different trading 1 contract than it is 100. I will continue trading and learning. I did actually play the put on the time prior to this that you said you missed. I just used the same concepts you have taught and just felt within that range that we were due for some downturn. I am also now looking to take entry into the put soon as we are now midway through the DOW projections. Thanks for the knowledge."
-Trader PC, Advanced Mentoring
What's next? With the count now biased irrationally to the call market moves upturn could continue, based on whatever "news" and "earnings" affects the market. Thusly, the market remains very high risk to trading.
Our higher risk put trade recommended earlier this week was sold profitably Monday and Tuesday. Traders should NOT have taken inventory in this signal in yesterday's trading if watching futures.
Wednesday, April 16, 2008
Hot to Invest
NEW YORK (MarketWatch) -- U.S. stocks traded higher in afternoon trade Tuesday, with well-received earnings from State Street Corp. and other regional banks helping ease concerns about financials a day after Wachovia Corp. posted an unexpected loss.
Floyd-an unexpected loss? A child would know differently.
The gains come as early quarterly results are still trickling through, with technology in particular weighing down the broader market ahead of bellwether Intel Corp.'s earnings report after the close.
"We didn't get another Wachovia today," said Owen Fitzpatrick, head of the U.S. equity group at Deutsche Bank.
Wachhovia (WB)posted an unexpected quarterly loss Monday, a stark reminder of the credit-market troubles crippling results in the financial sector and elsewhere.
Floyd-more fodder by children writing this….the credit market crisis is far from over.
Crude futures hitting a new high near $114 a barrel also lifted the energy sector and provided support to the market.
Floyd-the ridiculous profits of the oil game are what is dampening the market and part of what limits spending.
Yesterday the market hit tops of 12,428, bottoms of 12,256 and really allowed no trading of merit. Many of our subscribers wrote “hot to invest” and “ready” to trade. We are experiencing flat lining, which makes the average investor think that option premiums are eroding; in fact, it’s the fear in the market that slows premiums, and makes the bid/ask so varied.
Every time there is FEAR in the market, and flat lining is occurring, it’s the sign of a big bump day…of something to come. Some “thing” (earnings, data, etc.) will trigger what is already going to occur.
The odds of a downturn to our lower Dow projections are now at 45%. We remain in a market with little bias, and no directional emphasis. Two way trades are still likely, but expect tighter profits, and in /out trades.
Floyd-an unexpected loss? A child would know differently.
The gains come as early quarterly results are still trickling through, with technology in particular weighing down the broader market ahead of bellwether Intel Corp.'s earnings report after the close.
"We didn't get another Wachovia today," said Owen Fitzpatrick, head of the U.S. equity group at Deutsche Bank.
Wachhovia (WB)posted an unexpected quarterly loss Monday, a stark reminder of the credit-market troubles crippling results in the financial sector and elsewhere.
Floyd-more fodder by children writing this….the credit market crisis is far from over.
Crude futures hitting a new high near $114 a barrel also lifted the energy sector and provided support to the market.
Floyd-the ridiculous profits of the oil game are what is dampening the market and part of what limits spending.
Yesterday the market hit tops of 12,428, bottoms of 12,256 and really allowed no trading of merit. Many of our subscribers wrote “hot to invest” and “ready” to trade. We are experiencing flat lining, which makes the average investor think that option premiums are eroding; in fact, it’s the fear in the market that slows premiums, and makes the bid/ask so varied.
Every time there is FEAR in the market, and flat lining is occurring, it’s the sign of a big bump day…of something to come. Some “thing” (earnings, data, etc.) will trigger what is already going to occur.
The odds of a downturn to our lower Dow projections are now at 45%. We remain in a market with little bias, and no directional emphasis. Two way trades are still likely, but expect tighter profits, and in /out trades.
Tuesday, April 15, 2008
The 401-Keg Plan
Among earnings highlights will be J.P. Morgan Chase, Merrill Lynch Citigroup , Washington Mutual, Intel, IBM and Google this week. It is truly a week of economic data, earnings, and potential drama.
Yesterday the market gyrated to 12,407 on the theoretical Dow and 12,240 to the downside. Traders that bought into the put were able to scalp tight profits, although we’ll continue to list this position as a higher risk open trade.
The fact that the market did “hold” at prior lows may be a good sign for bulls, but two way trades remain highly likely.
“If you had purchased $1,000 of Delta Air Lines stock just one year ago you would have $49.00 left.
With Enron, you would have $16.50 left of the original $1,000 investment.
With WorldCom, you would have less than $5.00 if you bought it when it was good.
However, if you purchased $1,000 worth of beer, one year ago, drank it all and then turned in the cans for refund, you would have $50.
Based on the above, the best current investment advice is to drink heavily and recycle.
Its call the 401-Keg plan.”
A bit of short term historical perspective:
*Washington Mutual just raised capital to continue. Wall Street took it as a good sign.
*Lehman had a successful convertible debt offering, raising capital really just to stay liquid. Wall Street took this also as a good sign.
At both of our financial services newsletters Floyd teaches simple bell curve overbought and oversold methodology.
This is the core of our Dow projections. Your job is to simplify the input you receive to the easiest ratios to review.
Bell curve methodology says a "count of 7", for example, to the put. With 10 at the outer parameters a 7 shows a fairly overbought/oversold (depending upon the bias) market. Thusly, as you read our recommendations of the day you can personally judge, from your own risk ratio, how far you will "take it". When the count was 6 to 7 Monday to the put, the prior Friday's 264 point drop added to what could be falsely averaged facts, but nonetheless really do reflect in Floydian Bell Curve thinking.
The best trades are in the 4's, moving to 7's. This is when there is the most chance of a larger jump down or up that you can carry out in partial sales, Floydian thirds.
The key to buying and selling in this market is recognizing, stock or option, that profits are fleeting, and gains can be erased in days.
Yesterday the market gyrated to 12,407 on the theoretical Dow and 12,240 to the downside. Traders that bought into the put were able to scalp tight profits, although we’ll continue to list this position as a higher risk open trade.
The fact that the market did “hold” at prior lows may be a good sign for bulls, but two way trades remain highly likely.
“If you had purchased $1,000 of Delta Air Lines stock just one year ago you would have $49.00 left.
With Enron, you would have $16.50 left of the original $1,000 investment.
With WorldCom, you would have less than $5.00 if you bought it when it was good.
However, if you purchased $1,000 worth of beer, one year ago, drank it all and then turned in the cans for refund, you would have $50.
Based on the above, the best current investment advice is to drink heavily and recycle.
Its call the 401-Keg plan.”
A bit of short term historical perspective:
*Washington Mutual just raised capital to continue. Wall Street took it as a good sign.
*Lehman had a successful convertible debt offering, raising capital really just to stay liquid. Wall Street took this also as a good sign.
At both of our financial services newsletters Floyd teaches simple bell curve overbought and oversold methodology.
This is the core of our Dow projections. Your job is to simplify the input you receive to the easiest ratios to review.
Bell curve methodology says a "count of 7", for example, to the put. With 10 at the outer parameters a 7 shows a fairly overbought/oversold (depending upon the bias) market. Thusly, as you read our recommendations of the day you can personally judge, from your own risk ratio, how far you will "take it". When the count was 6 to 7 Monday to the put, the prior Friday's 264 point drop added to what could be falsely averaged facts, but nonetheless really do reflect in Floydian Bell Curve thinking.
The best trades are in the 4's, moving to 7's. This is when there is the most chance of a larger jump down or up that you can carry out in partial sales, Floydian thirds.
The key to buying and selling in this market is recognizing, stock or option, that profits are fleeting, and gains can be erased in days.
Monday, April 14, 2008
Monday Before April Expiration
Monday before April expiration, Dow up 3 of last 6, up 6 straight 1996-2001
GE lost 6% Friday on hitting the public with reality facts, exposing their own mortgage plays and what they let subslime do to them.
Several subscribers that have holdings in GE wrote Friday to express either their shock (really, after all my teaching on false financials :)), or their argument that "GE is doing so much with solar, wind, et al, how could this occur".
Floyd knows that when the market falls, so do over 94% of all stocks. Floyd also knows that we will find more and more "exposed" as the true falsehoods that have occurred come to the "head". GE may be solid, but GE also lied, cheated, and falsely projected.
This led as a trigger, although the market was ripe, for the almost 300 point drop we saw Friday. Floyd missed the trade for us, as no signal was provided....I could sense clearly that "something was up" and did not see the market as "readable". So be it, a missed trade is much safer than a large loss. By late afternoon we recommended a first buy trade to the call, higher risk, suspecting whipsaw could now occur.
Two astute Advanced Mentoring students, veteran S.K and D.S., good friends, began working a bit of projections.
Here's from S.K:
"Hello Floyd, Well, another profitable week! Today was a great day as well. Played the bounce twice off a 620 for a nice .50 profit on the option and then entered your trade towards day's end. Thank you! Things are continuing to progress very well.
DS and I are working on dow projections together and want to get your input. We have committed to focusing on this until we really have it down. Here is what I have have after today's move:
12302 (lowest low of the day) + 128 (which is half of today's overall down move of 256) = 12430
12430 + 326 (average of largest one day drops) = 12750 (rounded)
So, if these calculations are correct, could we say that 12430 or, more specifically, 12450 (to correspond with PNF charts) is our next top and 12750 is our highest top?
As for projecting our new possible lows are we doing the same thing (12300-128) to give us our possible new lows? Not so sure how we are calculating the new lows after a day like this." SK, Utah
And from Level 3 subscriber RA:
"I've entered the May 520 call @ 14.70. Good news is I've made 4 trades in the last 6 six trading days. All 4 trades were on the April 640p. My approach on these trades was to keep it simple. I looked at only your dow projections, support and resistance
levels on the index and option, and the 10 and 50 day moving averages. I
put in sell orders to sell my positions in 3 lots immediately after fill and
set profit goals of 20%, 30% and 40% for the first three trades. I set
profit goals a bit higher on the last trade because of today's market action
and sold my last lot shortly before close at an average profit of nearly
60%. Overall my profit on the 4 trades was 48%. Best of all I spent the
last two days watching the Masters on my computer while checking the market.
What a country!"
and another Level 3 Subscriber wrote –
“Bought those A640 puts on Thursday at $12.30 - sold Friday morning at $22.00
- then bought the May 620 calls on the alert - order in to sell calls for
25% profit Thanks!” - RC
And from Mike Gibbons, with “Breakout Watch”:
"Earnings season began ominously on Monday as Alcoa's earnings fell short of expectations and the week ended with GE's profit falling and a warning that earnings will be lower for the rest of the year. As earnings reports continue to arrive we can expect that on the whole they will be disappointing and the markets will continue to slide. The NASDAQ Composite has now fallen 20% from its November 2 high putting it at borderline bear market levels while the S&P 500 is off 15.5%. The consensus opinion among economists is that we are already in recession and if so, we can expect the markets to go much lower as the S&P 500 typically drops 28% in a recession (Nouriel Roubini).
We wrote last week about market optimism that there was a floor under the market after the Fed had bailed-out Bear Sterns but there is now concern that the size of the credit/liquidity crisis may be too large for the Fed to contain without Government intervention. (remember, the Fed is not officially part of the Government). The IMF warned that losses from private and commercial real estate loans may reach $1 trillion dollars and there were rumors that the Treasury and Fed were discussing plans for the treasury to increase borrowing beyond strictly budgetary requirements and deposit the excess with the Fed. If so, one shudders to think of the effect on the already distressed dollar, the price of imports, especially oil, and inflation. The fact that such an option is being considered is an indication that TPTB (the powers that be) believes the potential for further lending to distressed institutions is very real. To date, writedowns have amounted to 'just' $230 billion, so a potential quadrupling of the writedowns would be seismic."
And from Floyd :):
Market conditions are extremely bad. As the idiots babble as to "continue until we win in Iraq", or "we are analyzing long term effects on the market", we continue to head full fold into a deep recession, and inflation....stagflation, with a USD that will hit more lows. America will likely again elect our next President on false facts and emotions.
Citibank is next to fall. Perhaps Bank of America. Perhaps credit card companies. The false tops are breaking down, and we are being caught at our own games.
At Blue Chip Options we have been actively recommending specific bond funds, Gold, U.S. Treasuries, and select breakout plays. We are even combining alerts again, as we do not see many new stock trades, the bottom is NOT over, and fewer and fewer breakout plays.
But, as you can see above, it is highly possible to make money in this market. We continue to return 30 to 40% potential option averages, all by following Dow projections, subsets, and shooting down false facts.
With this said, as contrarians, it's now very very possible for some upside, just enough to allow Wall Street to continue it's lies, and enough for the government to continue it's dance.
Although the count is now to the put, Friday's moves may have created an overbought condition, and we'll continue to trade to the call.
GE lost 6% Friday on hitting the public with reality facts, exposing their own mortgage plays and what they let subslime do to them.
Several subscribers that have holdings in GE wrote Friday to express either their shock (really, after all my teaching on false financials :)), or their argument that "GE is doing so much with solar, wind, et al, how could this occur".
Floyd knows that when the market falls, so do over 94% of all stocks. Floyd also knows that we will find more and more "exposed" as the true falsehoods that have occurred come to the "head". GE may be solid, but GE also lied, cheated, and falsely projected.
This led as a trigger, although the market was ripe, for the almost 300 point drop we saw Friday. Floyd missed the trade for us, as no signal was provided....I could sense clearly that "something was up" and did not see the market as "readable". So be it, a missed trade is much safer than a large loss. By late afternoon we recommended a first buy trade to the call, higher risk, suspecting whipsaw could now occur.
Two astute Advanced Mentoring students, veteran S.K and D.S., good friends, began working a bit of projections.
Here's from S.K:
"Hello Floyd, Well, another profitable week! Today was a great day as well. Played the bounce twice off a 620 for a nice .50 profit on the option and then entered your trade towards day's end. Thank you! Things are continuing to progress very well.
DS and I are working on dow projections together and want to get your input. We have committed to focusing on this until we really have it down. Here is what I have have after today's move:
12302 (lowest low of the day) + 128 (which is half of today's overall down move of 256) = 12430
12430 + 326 (average of largest one day drops) = 12750 (rounded)
So, if these calculations are correct, could we say that 12430 or, more specifically, 12450 (to correspond with PNF charts) is our next top and 12750 is our highest top?
As for projecting our new possible lows are we doing the same thing (12300-128) to give us our possible new lows? Not so sure how we are calculating the new lows after a day like this." SK, Utah
And from Level 3 subscriber RA:
"I've entered the May 520 call @ 14.70. Good news is I've made 4 trades in the last 6 six trading days. All 4 trades were on the April 640p. My approach on these trades was to keep it simple. I looked at only your dow projections, support and resistance
levels on the index and option, and the 10 and 50 day moving averages. I
put in sell orders to sell my positions in 3 lots immediately after fill and
set profit goals of 20%, 30% and 40% for the first three trades. I set
profit goals a bit higher on the last trade because of today's market action
and sold my last lot shortly before close at an average profit of nearly
60%. Overall my profit on the 4 trades was 48%. Best of all I spent the
last two days watching the Masters on my computer while checking the market.
What a country!"
and another Level 3 Subscriber wrote –
“Bought those A640 puts on Thursday at $12.30 - sold Friday morning at $22.00
- then bought the May 620 calls on the alert - order in to sell calls for
25% profit Thanks!” - RC
And from Mike Gibbons, with “Breakout Watch”:
"Earnings season began ominously on Monday as Alcoa's earnings fell short of expectations and the week ended with GE's profit falling and a warning that earnings will be lower for the rest of the year. As earnings reports continue to arrive we can expect that on the whole they will be disappointing and the markets will continue to slide. The NASDAQ Composite has now fallen 20% from its November 2 high putting it at borderline bear market levels while the S&P 500 is off 15.5%. The consensus opinion among economists is that we are already in recession and if so, we can expect the markets to go much lower as the S&P 500 typically drops 28% in a recession (Nouriel Roubini).
We wrote last week about market optimism that there was a floor under the market after the Fed had bailed-out Bear Sterns but there is now concern that the size of the credit/liquidity crisis may be too large for the Fed to contain without Government intervention. (remember, the Fed is not officially part of the Government). The IMF warned that losses from private and commercial real estate loans may reach $1 trillion dollars and there were rumors that the Treasury and Fed were discussing plans for the treasury to increase borrowing beyond strictly budgetary requirements and deposit the excess with the Fed. If so, one shudders to think of the effect on the already distressed dollar, the price of imports, especially oil, and inflation. The fact that such an option is being considered is an indication that TPTB (the powers that be) believes the potential for further lending to distressed institutions is very real. To date, writedowns have amounted to 'just' $230 billion, so a potential quadrupling of the writedowns would be seismic."
And from Floyd :):
Market conditions are extremely bad. As the idiots babble as to "continue until we win in Iraq", or "we are analyzing long term effects on the market", we continue to head full fold into a deep recession, and inflation....stagflation, with a USD that will hit more lows. America will likely again elect our next President on false facts and emotions.
Citibank is next to fall. Perhaps Bank of America. Perhaps credit card companies. The false tops are breaking down, and we are being caught at our own games.
At Blue Chip Options we have been actively recommending specific bond funds, Gold, U.S. Treasuries, and select breakout plays. We are even combining alerts again, as we do not see many new stock trades, the bottom is NOT over, and fewer and fewer breakout plays.
But, as you can see above, it is highly possible to make money in this market. We continue to return 30 to 40% potential option averages, all by following Dow projections, subsets, and shooting down false facts.
With this said, as contrarians, it's now very very possible for some upside, just enough to allow Wall Street to continue it's lies, and enough for the government to continue it's dance.
Although the count is now to the put, Friday's moves may have created an overbought condition, and we'll continue to trade to the call.
Friday, April 11, 2008
High Risk Market
We continue to see a market now in a trade range, and high risk. Although our traders know us for daily signals yesterday we did not provide one, nor will we at opening today. An intraday alert will be issued if market conditions show a clear enough bias for us, but right now the "mood" is NOT clear, and we believe trades are higher risk.
Market conditions yesterday took the Dow to 12,709, which may be near a top, and shifted intraday to a low of 12,457. Many traders wrote "hot to trot" on a new signal, and wanting to trade.
It is not often that Floyd will not find a trade, so stay prudent with us....we see a market ready to shift in expiry, erosion occurring, and high price May options. We will only trade closer to the end of the day, or not at all.
Market conditions yesterday took the Dow to 12,709, which may be near a top, and shifted intraday to a low of 12,457. Many traders wrote "hot to trot" on a new signal, and wanting to trade.
It is not often that Floyd will not find a trade, so stay prudent with us....we see a market ready to shift in expiry, erosion occurring, and high price May options. We will only trade closer to the end of the day, or not at all.
Thursday, April 10, 2008
Support, Resistance, Pivot and Fibonnaci
When we use “support, resistance, pivot and Fibonnaci,” effectively we are telling you what prices should be. That is, if a price does this, then it should go there or it should stop going in that direction when it reaches X.
Much of Floydian math, as our long term subscribers call it, is an intuitive way of reading the market, and reading channels, which represent a flow of prices and the boundaries within which prices are likely to operate. Moving averages help us see channels, and effectively used, help the support and resistance trader identify the highs and lows better.
Remember, many of our traders use tight scalping techniques with profit goals of .50 to 1.00 a contract, and “fall in love” with an option, learning it’s own channels and range, and where traders seem to lead it bid/ask.
Other traders with OEX do this also, AND trade longer term moves for larger gains, often selling in Floydian Thirds, which is 1/3 at one price, 1/3 at another (both higher than the buy, we hope), and the final 1/3 waiting for the “top of the channel” or the higher/lower Dow projection.
Channel longer term trading can be higher risk, with a much greater reward ratio.
Yesterday’s moves allowed up to 60% returns on the April640P, with top sells to our top recommendations, and for some, even higher to 18.50.
Many traders wrote yesterday asking “time for calls” as the day progressed, and we responded with “not yet”.
The market yesterday hit a theoretical Dow bottom of 12,428, and we had provided ranges of 12,460-112,385.
The next moves have potential for two way trades. However, we will NOT offer an opening signal…..watching bias and commitment/volume first.
Much of Floydian math, as our long term subscribers call it, is an intuitive way of reading the market, and reading channels, which represent a flow of prices and the boundaries within which prices are likely to operate. Moving averages help us see channels, and effectively used, help the support and resistance trader identify the highs and lows better.
Remember, many of our traders use tight scalping techniques with profit goals of .50 to 1.00 a contract, and “fall in love” with an option, learning it’s own channels and range, and where traders seem to lead it bid/ask.
Other traders with OEX do this also, AND trade longer term moves for larger gains, often selling in Floydian Thirds, which is 1/3 at one price, 1/3 at another (both higher than the buy, we hope), and the final 1/3 waiting for the “top of the channel” or the higher/lower Dow projection.
Channel longer term trading can be higher risk, with a much greater reward ratio.
Yesterday’s moves allowed up to 60% returns on the April640P, with top sells to our top recommendations, and for some, even higher to 18.50.
Many traders wrote yesterday asking “time for calls” as the day progressed, and we responded with “not yet”.
The market yesterday hit a theoretical Dow bottom of 12,428, and we had provided ranges of 12,460-112,385.
The next moves have potential for two way trades. However, we will NOT offer an opening signal…..watching bias and commitment/volume first.
Wednesday, April 9, 2008
When Creating our Dow Projections
In creating our Dow projections Floyd thinks always about what we see as three distinct types of moves in the market:
1. Random Noise
2. Large,unpredictable shocks, like 9/11
3. Cycles of predictable frequencies
Unpredictable shocks influence the market greatly, short term. Random noise (hysterical moves that are short lived) also are huge trend builders, as frequencies and cycles can often shift.
Random noise is often falsely interpreted, and much fodder for market makers, who we now know truly know little (Bear Stearns) to predict from.
As an example, the 400 point run a week ago was perhaps random noise, but market makers saw it immediately as “good news, and better and new upside, and “the great return of the bull run”.
Recent market statistics on what an option trade is might help us understand:
*Typically 45 to 64 year old, male, with a Bachelor’s degree
*Trading typically 1 to 5 years, with some just under 10 years
*Earning 50 to 150K annually
*Trades under 10 times a month, but is trading more this year than last year.
There is one lesson to be learned here, even if you statistically fall in the above category: these are new, more naïve traders that can be easily influenced to market moods, by market makers (the idiots on Wall Street), and that make many rash and emotional decisions.
It is your goal to NOT be this type of trader, but to take advantage of those that are.
Market moves yesterday began what I see as a “trade range” plunge. The market hesitated strongly at OEX 630 and moved to Dow lows of 12,485. Although limited upside moves are still likely, we continue to see more moves to the downside.
1. Random Noise
2. Large,unpredictable shocks, like 9/11
3. Cycles of predictable frequencies
Unpredictable shocks influence the market greatly, short term. Random noise (hysterical moves that are short lived) also are huge trend builders, as frequencies and cycles can often shift.
Random noise is often falsely interpreted, and much fodder for market makers, who we now know truly know little (Bear Stearns) to predict from.
As an example, the 400 point run a week ago was perhaps random noise, but market makers saw it immediately as “good news, and better and new upside, and “the great return of the bull run”.
Recent market statistics on what an option trade is might help us understand:
*Typically 45 to 64 year old, male, with a Bachelor’s degree
*Trading typically 1 to 5 years, with some just under 10 years
*Earning 50 to 150K annually
*Trades under 10 times a month, but is trading more this year than last year.
There is one lesson to be learned here, even if you statistically fall in the above category: these are new, more naïve traders that can be easily influenced to market moods, by market makers (the idiots on Wall Street), and that make many rash and emotional decisions.
It is your goal to NOT be this type of trader, but to take advantage of those that are.
Market moves yesterday began what I see as a “trade range” plunge. The market hesitated strongly at OEX 630 and moved to Dow lows of 12,485. Although limited upside moves are still likely, we continue to see more moves to the downside.
Tuesday, April 8, 2008
A bit more euphoria
April is the best month for the Dow, average 1.8% since 1950
A bit more euphoria hit the market, led by financial banks like Washington Mutual, which reported strong cash infusions. This led the market back towards our second top again, allowing traders that did hold calls to be profitable.
By following futures this morning it was also possible to see a strong bump up was going to occur, and new buys on puts, per our alert, could all have been made at opening or thereafter at best buy prices.
This is a week without a great amount of economic data to trigger the market, but the first quarter earnings will now become the new fodder for “triggers”. We again believe the market is ripe for downturn, but continue to see trading ranges occur.
The put we now hold as a first buy hedge investment, for a market downturn we think likely. Calls may still have strength, and two way trades are possible.
Many traders reported good profits on the April640P, buying just under $10.00 and selling to $12.50.
Lastly, trader NT wrote yesterday expressing frustration that he was “locking in profits at .50 to 1.00, and often could hit 2.00”. Using this type of formula thinking cautiously take note that profits are profits, and it’s ALWAYS good to at least sell partials when good profits are available.
Trader JK said it best, “Floyd, got $1.00 more on the finals I had on calls, and then made a fast $2500 today on the 640P. Where else can you make $3500.00 in a day, and sit around?”
A bit more euphoria hit the market, led by financial banks like Washington Mutual, which reported strong cash infusions. This led the market back towards our second top again, allowing traders that did hold calls to be profitable.
By following futures this morning it was also possible to see a strong bump up was going to occur, and new buys on puts, per our alert, could all have been made at opening or thereafter at best buy prices.
This is a week without a great amount of economic data to trigger the market, but the first quarter earnings will now become the new fodder for “triggers”. We again believe the market is ripe for downturn, but continue to see trading ranges occur.
The put we now hold as a first buy hedge investment, for a market downturn we think likely. Calls may still have strength, and two way trades are possible.
Many traders reported good profits on the April640P, buying just under $10.00 and selling to $12.50.
Lastly, trader NT wrote yesterday expressing frustration that he was “locking in profits at .50 to 1.00, and often could hit 2.00”. Using this type of formula thinking cautiously take note that profits are profits, and it’s ALWAYS good to at least sell partials when good profits are available.
Trader JK said it best, “Floyd, got $1.00 more on the finals I had on calls, and then made a fast $2500 today on the 640P. Where else can you make $3500.00 in a day, and sit around?”
Monday, April 7, 2008
$7500 this morning, done for the day
“$7500 this morning on 650 and 655 calls; done for the day. Skimmed $0.50 profits
Cheers!!!!!”
Some of our Advanced Mentoring students use trendline channels. Here you can pick profit targets by simply drawing two parallel trendlines that connect two recent highs and two recent lows. These trendlines are seen as resistance or support points where traders would take profits and /or reverse their position. Even though there is a possibility of prices not stalling or reversing at these points, they serve as guidelines of where to take profits or stop loss your positions.
Floyd watched his ever trusty laptop drop to the ground Friday when a Great TSA employee at the airport dropped his laptop as Floyd went through airport incompetent airport security. Sigh. Email responses will be a bit slowed this week as we install backups, as Floyd is still traveling.
Friday the market was classic in its hesitancy, showing the 400 point run that so excited the investor earlier in the week to not quite hold when job reports came in worst since 2003, with over 80,000 jobs lost.
This may trigger what we see to a beginning trade range move now, back to former Dow lows. By the end of the week we feel downturn could be well in process, with historical key reversal dates occurring.
Stocks advanced early, to help us lock in final call profits, and faded later in the day as oil rose, and bond insurer MBIA was downgraded.
How can giving a 35 billion contract to a European company rather than Boeing, our newest military decision, be good for our economy? Halliburton, doing so well from the rebuilding of what we bombed has now moved its corporate headquarters to Dubai.
Please tell me that Emperor Bush’s helicopter, Marine One, was not outsourced to a British-Italian conglomerate.
There is a sold point to global economics, and a even more solid case for logical spending our own tax dollars.
Cheers!!!!!”
Some of our Advanced Mentoring students use trendline channels. Here you can pick profit targets by simply drawing two parallel trendlines that connect two recent highs and two recent lows. These trendlines are seen as resistance or support points where traders would take profits and /or reverse their position. Even though there is a possibility of prices not stalling or reversing at these points, they serve as guidelines of where to take profits or stop loss your positions.
Floyd watched his ever trusty laptop drop to the ground Friday when a Great TSA employee at the airport dropped his laptop as Floyd went through airport incompetent airport security. Sigh. Email responses will be a bit slowed this week as we install backups, as Floyd is still traveling.
Friday the market was classic in its hesitancy, showing the 400 point run that so excited the investor earlier in the week to not quite hold when job reports came in worst since 2003, with over 80,000 jobs lost.
This may trigger what we see to a beginning trade range move now, back to former Dow lows. By the end of the week we feel downturn could be well in process, with historical key reversal dates occurring.
Stocks advanced early, to help us lock in final call profits, and faded later in the day as oil rose, and bond insurer MBIA was downgraded.
How can giving a 35 billion contract to a European company rather than Boeing, our newest military decision, be good for our economy? Halliburton, doing so well from the rebuilding of what we bombed has now moved its corporate headquarters to Dubai.
Please tell me that Emperor Bush’s helicopter, Marine One, was not outsourced to a British-Italian conglomerate.
There is a sold point to global economics, and a even more solid case for logical spending our own tax dollars.
Friday, April 4, 2008
Following the Rules
The market struggled with real reality yesterday, as economic and job reports, Bernanke explanation, brokerages....all of it became a bit more "real" to traders.
The April640P hit tops of 17.20, and was sold profitably. Many day traded this position.
The April655C was available for up to 1.00 per contract profits.
Some Advanced Mentoring students also traded the April630C for up to 3.00 profits intraday.
The actual signal is much less important than following the rules. This is the hardest rule we teach. The following testimonial from trader BD from Delaware I'm most proud of, as I have watched this trader truly develop in his skills. Read carefully, and learn from him:
"Floyd: Sold my remaining 620 put inventory @ 7.50 for a solid 1.70 profit on top of yesterdays solid profits. Had buy orders for 655 calls ready for 50 @ 2.00, 50 @ 2.10, 100 @ 1.70.
Filled both the 2 & 2.1 early. Let the market come to me, instead of chasing. As soon as the buy orders were filled, I had sell orders in place for 2.5 & 2.7. Filled while I was at the store. I'm getting much better at taking what the market will give and not expecting more.
Another solid day. If I could only guarantee $5k every day, I'd be a professional trader; 2 of 4 days this week >$5k/day. I didn't even trade Tuesday. Maybe in a year or two.
Thanks Floyd, I'm proud of myself.
One of the most important things I've learned from your literature is the psychology behind the trade. I my recent trading, last month or so, I don't recall getting excited about a money making trade or anxious about being down, keepin' it humble. This is consistent with my making profits, haven't had a loser in over a month. I also reread your fruit/option inventory analogy every day. Keepin' it simple. Each day I go into a trade only thinking about what the market will give today, not that I have to take out $500 or $5000. I'm sold on your Dow Projections and use the OEX resistance and support for confirmation. You da man.. "
Do NOT build any optimism about our economy. Emperor Bush and cronies are trying hard to stablize what is truly the worst situation economically since the Great Depression, and they will fail. They were part of the problem, and continue to be.
One of Floyd's financial idols is George Soros, the billionaire investor. Read carefully below, with helpful Floydian comments throughout:)
Soros Sees Additional Market Declines After Temporary Reprieve
April 3 (Bloomberg) -- Billionaire George Soros called the current financial crisis the worst since the Great Depression and said markets will fall more this year after a brief rebound. Floyd-dead right
``We had a good bottom,'' Soros said yesterday in an interview in New York, referring to the rally in stocks and the dollar after JPMorgan Chase & Co.agreed to buy Bear Stearns Cos. on March 17. ``This will probably not prove to be the final bottom,'' he said, adding the rebound may last six weeks to three months as the U.S. moves closer to a recession. Floyd-I believe we are in a recession, which will worsen over a 7 month period, with periods UP.
Last summer, worried about market disruptions that started with risingsubprime-mortgage defaults, Soros, 77, returned to a more active role in managing the $17 billion Quantum Endowment Fund, whose profits pay for his philanthropic projects. Quantum returned an average of 30 percent a year before Soros started using outside managers in 2000 for much of his money.
He also decided to write a book, his 10th, ``The New Paradigm for Financial Markets'' (Public Affairs, 2008). Released today online, the book explains the causes of the current meltdown, a crisis he says has been in the making since 1980, and the trades he put in place this year to protect his wealth, much of it in Quantum. Floyd-Soros is a financial contrarian and genius. He understands economics.
Soros has bet on declines in the dollar, 10-year Treasuries and U.S. and European stocks. He expected foreign currencies to rise, as well as Chinese and Indian equities. The latter bet helped Quantum return 32 percent in 2007. Quantum's returns this year have ranged from up 3 percent to down 3 percent.
`Heightened Uncertainty'
The euro has climbed 7.5 percent against the dollar this year and the Japanese yen has gained 9.1 percent. These and other currencies may continue to strengthen, he said.
``There is an increasing unwillingness to hold dollars, though there's a lack of suitable alternatives,'' he said. ``It's a period of heightened uncertainty.''
Because the dollar has been rendered nearly worthless.-Floyd
Federal Reserve officials dropped their benchmark interest rate 2 percentage points this year to 2.25 percent, and Soros doesn't see that they can lower the rate much further, given the weak dollar.
``We are close to the limit,'' he said.
As for his wagers on developing markets, Soros hasn't abandoned his holdings in India, even with the 22 percent drop in the benchmark Indian index this year.
``The fundamentals remain good,'' he said. He is less certain about what will happen to Chinese H shares, which trade in Hong Kong.
Credit-Default Swaps
Credit default swaps -- a way to bet on the creditworthiness of a company -- may be the next crisis area because the market is unregulated, and it's impossible to know whether counterparties can meet their obligations in the event of a bond default. The market has a notional value of about $45 trillion -- or about half the total wealth of U.S. households.
Soros recommends the creation of an exchange with a sound capital structure and strict margin requirements, where current and future contracts could be traded.
The cause of the current troubles dates back to 1980, when U.S. PresidentRonald Reagan and U.K. Prime Minister Margaret Thatcher came to power, Soros said. It was during this time that borrowing ballooned and regulation of banks and financial markets became less stringent. These leaders, Soros said, believed that markets are self-correcting, meaning that if prices get out of whack, they will eventually revert to historical norms. Instead, this laissez-faire attitude created the current housing bubble, which in turn led to the seizing up of credit markets and the demise of Bear Stearns, Soros said.
Read the above carefully. This is what Floyd argues from the soapbox on regularly....supply side economics is a Republican smoke screen, with no proof or validity. No comments on Democrats here, but a huge criticism of Reagan, Bush I, and "tough boy" Georgie...each has made the wealthy richer in corporations and top earners, and each has dramatically affected the economy long term. All FACTS prove this, all rhetoric is typically what the average voter believes (lower taxes, "let the markets decide", thinking)-Floyd
To avoid a super-bubble in the future, Soros said banks must control their own borrowing. They must also curtail lending to clients such as hedge funds by demanding greater collateral and margin requirements on loans."
The April640P hit tops of 17.20, and was sold profitably. Many day traded this position.
The April655C was available for up to 1.00 per contract profits.
Some Advanced Mentoring students also traded the April630C for up to 3.00 profits intraday.
The actual signal is much less important than following the rules. This is the hardest rule we teach. The following testimonial from trader BD from Delaware I'm most proud of, as I have watched this trader truly develop in his skills. Read carefully, and learn from him:
"Floyd: Sold my remaining 620 put inventory @ 7.50 for a solid 1.70 profit on top of yesterdays solid profits. Had buy orders for 655 calls ready for 50 @ 2.00, 50 @ 2.10, 100 @ 1.70.
Filled both the 2 & 2.1 early. Let the market come to me, instead of chasing. As soon as the buy orders were filled, I had sell orders in place for 2.5 & 2.7. Filled while I was at the store. I'm getting much better at taking what the market will give and not expecting more.
Another solid day. If I could only guarantee $5k every day, I'd be a professional trader; 2 of 4 days this week >$5k/day. I didn't even trade Tuesday. Maybe in a year or two.
Thanks Floyd, I'm proud of myself.
One of the most important things I've learned from your literature is the psychology behind the trade. I my recent trading, last month or so, I don't recall getting excited about a money making trade or anxious about being down, keepin' it humble. This is consistent with my making profits, haven't had a loser in over a month. I also reread your fruit/option inventory analogy every day. Keepin' it simple. Each day I go into a trade only thinking about what the market will give today, not that I have to take out $500 or $5000. I'm sold on your Dow Projections and use the OEX resistance and support for confirmation. You da man.. "
Do NOT build any optimism about our economy. Emperor Bush and cronies are trying hard to stablize what is truly the worst situation economically since the Great Depression, and they will fail. They were part of the problem, and continue to be.
One of Floyd's financial idols is George Soros, the billionaire investor. Read carefully below, with helpful Floydian comments throughout:)
Soros Sees Additional Market Declines After Temporary Reprieve
April 3 (Bloomberg) -- Billionaire George Soros called the current financial crisis the worst since the Great Depression and said markets will fall more this year after a brief rebound. Floyd-dead right
``We had a good bottom,'' Soros said yesterday in an interview in New York, referring to the rally in stocks and the dollar after JPMorgan Chase & Co.agreed to buy Bear Stearns Cos. on March 17. ``This will probably not prove to be the final bottom,'' he said, adding the rebound may last six weeks to three months as the U.S. moves closer to a recession. Floyd-I believe we are in a recession, which will worsen over a 7 month period, with periods UP.
Last summer, worried about market disruptions that started with risingsubprime-mortgage defaults, Soros, 77, returned to a more active role in managing the $17 billion Quantum Endowment Fund, whose profits pay for his philanthropic projects. Quantum returned an average of 30 percent a year before Soros started using outside managers in 2000 for much of his money.
He also decided to write a book, his 10th, ``The New Paradigm for Financial Markets'' (Public Affairs, 2008). Released today online, the book explains the causes of the current meltdown, a crisis he says has been in the making since 1980, and the trades he put in place this year to protect his wealth, much of it in Quantum. Floyd-Soros is a financial contrarian and genius. He understands economics.
Soros has bet on declines in the dollar, 10-year Treasuries and U.S. and European stocks. He expected foreign currencies to rise, as well as Chinese and Indian equities. The latter bet helped Quantum return 32 percent in 2007. Quantum's returns this year have ranged from up 3 percent to down 3 percent.
`Heightened Uncertainty'
The euro has climbed 7.5 percent against the dollar this year and the Japanese yen has gained 9.1 percent. These and other currencies may continue to strengthen, he said.
``There is an increasing unwillingness to hold dollars, though there's a lack of suitable alternatives,'' he said. ``It's a period of heightened uncertainty.''
Because the dollar has been rendered nearly worthless.-Floyd
Federal Reserve officials dropped their benchmark interest rate 2 percentage points this year to 2.25 percent, and Soros doesn't see that they can lower the rate much further, given the weak dollar.
``We are close to the limit,'' he said.
As for his wagers on developing markets, Soros hasn't abandoned his holdings in India, even with the 22 percent drop in the benchmark Indian index this year.
``The fundamentals remain good,'' he said. He is less certain about what will happen to Chinese H shares, which trade in Hong Kong.
Credit-Default Swaps
Credit default swaps -- a way to bet on the creditworthiness of a company -- may be the next crisis area because the market is unregulated, and it's impossible to know whether counterparties can meet their obligations in the event of a bond default. The market has a notional value of about $45 trillion -- or about half the total wealth of U.S. households.
Soros recommends the creation of an exchange with a sound capital structure and strict margin requirements, where current and future contracts could be traded.
The cause of the current troubles dates back to 1980, when U.S. PresidentRonald Reagan and U.K. Prime Minister Margaret Thatcher came to power, Soros said. It was during this time that borrowing ballooned and regulation of banks and financial markets became less stringent. These leaders, Soros said, believed that markets are self-correcting, meaning that if prices get out of whack, they will eventually revert to historical norms. Instead, this laissez-faire attitude created the current housing bubble, which in turn led to the seizing up of credit markets and the demise of Bear Stearns, Soros said.
Read the above carefully. This is what Floyd argues from the soapbox on regularly....supply side economics is a Republican smoke screen, with no proof or validity. No comments on Democrats here, but a huge criticism of Reagan, Bush I, and "tough boy" Georgie...each has made the wealthy richer in corporations and top earners, and each has dramatically affected the economy long term. All FACTS prove this, all rhetoric is typically what the average voter believes (lower taxes, "let the markets decide", thinking)-Floyd
To avoid a super-bubble in the future, Soros said banks must control their own borrowing. They must also curtail lending to clients such as hedge funds by demanding greater collateral and margin requirements on loans."
Thursday, April 3, 2008
Support and Resistance
At OEX we use the nearest support/resistance areas as targets for taking profits. Just think of support and resistance as the short, medium and long term lows and highs.
We use point and figure charts to see these lines, calculate them for you each day, and provide a calculator on the website that allows you to re-calculate during the trading day.
We further provide Fib lines, and Average True Range lines, all to show other "stop" or "start" points, where to buy and sell.
With the recent changes we 've made in our alert we're working with subscribers to spend MORE time calculating intraday because of the massive shifts to the market, and the opportunity for day trade.
Our most astute and successful traders use the signals we provide, and the pricing indicators, as tools to utilize around pivot points, and support and resistance lines. Further, our most seasoned and successful traders "fall in love" with an option, watching just this option and the Dow, and becoming familiar with the swings of that option intraday.
Some traders in our Advanced Mentoring service are working with us now on using Fibonnaci extension levels. We use 138%,150%, 161.8% and 200% as extensions in comparison with the classic Fib retracement numbers we show in the alert. All of these multipliers help show more clear cut support and resistance lines. Extension values can be helpful.
Yesterday the market moved to a top at 12,736 and a bottom at 12,515. Traders were able to buy the April640P, which closed at 13.90 the day prior, as low as 12.20 (not quite near our best buy, but below prior day close), and sell to 16.40. We will continue to list this issue as a new hedge position. No new calls, yet, as we want to see if the one day euphoria was truly just that, and if Bernanke's sobering comments on our economy will reflect in market turns.
We use point and figure charts to see these lines, calculate them for you each day, and provide a calculator on the website that allows you to re-calculate during the trading day.
We further provide Fib lines, and Average True Range lines, all to show other "stop" or "start" points, where to buy and sell.
With the recent changes we 've made in our alert we're working with subscribers to spend MORE time calculating intraday because of the massive shifts to the market, and the opportunity for day trade.
Our most astute and successful traders use the signals we provide, and the pricing indicators, as tools to utilize around pivot points, and support and resistance lines. Further, our most seasoned and successful traders "fall in love" with an option, watching just this option and the Dow, and becoming familiar with the swings of that option intraday.
Some traders in our Advanced Mentoring service are working with us now on using Fibonnaci extension levels. We use 138%,150%, 161.8% and 200% as extensions in comparison with the classic Fib retracement numbers we show in the alert. All of these multipliers help show more clear cut support and resistance lines. Extension values can be helpful.
Yesterday the market moved to a top at 12,736 and a bottom at 12,515. Traders were able to buy the April640P, which closed at 13.90 the day prior, as low as 12.20 (not quite near our best buy, but below prior day close), and sell to 16.40. We will continue to list this issue as a new hedge position. No new calls, yet, as we want to see if the one day euphoria was truly just that, and if Bernanke's sobering comments on our economy will reflect in market turns.
Wednesday, April 2, 2008
OEX Options Trading Alert for April 2nd
This is what created a day of euphoria yesterday:
U.S. stocks cheer Lehman's ability to raise capital
Economic data aren't that great, but not as bad as feared
(Floyd comment: "it's not as bad as we expected, time to rally:)
NEW YORK (MarketWatch) -- U.S. stocks on Tuesday celebrated the start of a new quarter, rallying as Lehman Brothers Holdings Inc.'s equity offer drew a warm reception, fueling the Dow to its 8th-biggest point jump ever.
"Clearly there is a recognition the credit markets are healing -- usually stocks begin to rally about six months before the end of a slowdown," said Jeffrey Kleintop, chief market strategist at LPL Financial Services.
(Floyd comment: some guy we never heard of tells us it's better)
"And with earning season less than a week away, and we haven't heard a flood of negative pre-announcements," Kleintop said.
(Floyd comment: True, because they are cooking the books:)
Yesterday our April620C hit highs of 21.60, prompting a rash of great subscriber testimonials as to how Floyd predicts the Dow, and just how profitable this signal was. A good start to our month!!!!!
Market upturn was typically investors looking for "good news", and little is really that good. Ignore the analysts now telling us "it's okay, and bulls will rise". Perhaps for a bit, but not for that long, we think.
For today's opening, the calls have the obvious bias, and we think now have opportunity for a pause. Floyd will not offer a new signal, YET. Let's wait it out, and not be greedy. We've hit 10 for 10 signals recently, and that's too good. We will be cautious.
FED days continue to be tremendous "event" days for our traders.
As FEDS day continues to show a great time to trade the OEX I'll be sharing some of my scalping techniques with the Bernanke jig starts up on fateful Tuesday's.
If I own an option at that time, I'll have sell orders in for three price moves up.
If I am buying an option at that time, I'll have buy orders in for three prices moves down.
Ex: Sell 2 at 3.00, 2 at 3.50, 2. and 4.00 or buy 2 at 2.00, 2 at 1.50 and 2 at 1.00. The concept of the buys in fast movement are the key, as the trader gains the ability to buy in ranges, and quickly put averaged profit margins of 10 to 28% on your costs, with sell orders in at this price, and also in ranges above and slightly below.
Effectively you are bidding the market up and down, and trading the same range with the volatility of the advance move. If you are trading with us for that day you already know how we are seeing the market, and interpreting the potential FED bias. Much of my trading during this time period occurs 2.14 to 2.30 p.m., just as the FEDS announce, and the first interpretation takes place.
Almost always there is a reaction to the first interpretation later in the day, or the following day, unless the news is extremely clear-cut and cannot be interpreted.
As the market moves up 400 points, and all is good, please think about....
Today we do not need more dialogue on Obama's preacher, or whether Hillary should stay in the race. In the situation we are in we start with a huge government deficit and record private debt, all run up when times were good and we should have been storing up acorns. We now have a drama where people begin losing their homes, which is usually the last stage of the drama. This is the one that is bringing back stagflation, a poisonous combination of economic slowdown and eroding currency that we cured at a huge cost back in 1981. When that red phone that Hillary talks about rings at 3 a.m. it probably will not be the National Security Adviser saying that Osama Bin Laden (oh, where is he by the way?) has struck again. More likely it will be the treasury secretary reporting that the markets have opened in the Far East and the dollar has become worthless. This is like the economist that predicted 9 of the last 5 recessions.
U.S. stocks cheer Lehman's ability to raise capital
Economic data aren't that great, but not as bad as feared
(Floyd comment: "it's not as bad as we expected, time to rally:)
NEW YORK (MarketWatch) -- U.S. stocks on Tuesday celebrated the start of a new quarter, rallying as Lehman Brothers Holdings Inc.'s equity offer drew a warm reception, fueling the Dow to its 8th-biggest point jump ever.
"Clearly there is a recognition the credit markets are healing -- usually stocks begin to rally about six months before the end of a slowdown," said Jeffrey Kleintop, chief market strategist at LPL Financial Services.
(Floyd comment: some guy we never heard of tells us it's better)
"And with earning season less than a week away, and we haven't heard a flood of negative pre-announcements," Kleintop said.
(Floyd comment: True, because they are cooking the books:)
Yesterday our April620C hit highs of 21.60, prompting a rash of great subscriber testimonials as to how Floyd predicts the Dow, and just how profitable this signal was. A good start to our month!!!!!
Market upturn was typically investors looking for "good news", and little is really that good. Ignore the analysts now telling us "it's okay, and bulls will rise". Perhaps for a bit, but not for that long, we think.
For today's opening, the calls have the obvious bias, and we think now have opportunity for a pause. Floyd will not offer a new signal, YET. Let's wait it out, and not be greedy. We've hit 10 for 10 signals recently, and that's too good. We will be cautious.
FED days continue to be tremendous "event" days for our traders.
As FEDS day continues to show a great time to trade the OEX I'll be sharing some of my scalping techniques with the Bernanke jig starts up on fateful Tuesday's.
If I own an option at that time, I'll have sell orders in for three price moves up.
If I am buying an option at that time, I'll have buy orders in for three prices moves down.
Ex: Sell 2 at 3.00, 2 at 3.50, 2. and 4.00 or buy 2 at 2.00, 2 at 1.50 and 2 at 1.00. The concept of the buys in fast movement are the key, as the trader gains the ability to buy in ranges, and quickly put averaged profit margins of 10 to 28% on your costs, with sell orders in at this price, and also in ranges above and slightly below.
Effectively you are bidding the market up and down, and trading the same range with the volatility of the advance move. If you are trading with us for that day you already know how we are seeing the market, and interpreting the potential FED bias. Much of my trading during this time period occurs 2.14 to 2.30 p.m., just as the FEDS announce, and the first interpretation takes place.
Almost always there is a reaction to the first interpretation later in the day, or the following day, unless the news is extremely clear-cut and cannot be interpreted.
As the market moves up 400 points, and all is good, please think about....
Today we do not need more dialogue on Obama's preacher, or whether Hillary should stay in the race. In the situation we are in we start with a huge government deficit and record private debt, all run up when times were good and we should have been storing up acorns. We now have a drama where people begin losing their homes, which is usually the last stage of the drama. This is the one that is bringing back stagflation, a poisonous combination of economic slowdown and eroding currency that we cured at a huge cost back in 1981. When that red phone that Hillary talks about rings at 3 a.m. it probably will not be the National Security Adviser saying that Osama Bin Laden (oh, where is he by the way?) has struck again. More likely it will be the treasury secretary reporting that the markets have opened in the Far East and the dollar has become worthless. This is like the economist that predicted 9 of the last 5 recessions.
Tuesday, April 1, 2008
Floyd's Newly Updated Blog!! Happy April Fool's Day!
We've changed our blogging format to allow for comments. Note that these blog entries are "day-old" entries taken from the commentary section of the daily trading alerts we send to our subscribers. The information presented here is not as useful as it would be if (you were a subscriber and) you got it before each trading day, however, it's a useful format because it allows for comments from the blog readers.
In January 2001 our national debt was 5.9 trillion, and we now have a 70% rise to 10.3 trillion by the end of 2008. "My budget plan pays down an unprecedented amount of our national debt", Bush said in 2001.
Bush tax cuts are supposed to improve the economy and lead to surpluses, but we now owe collectively $120k per tax paying family. We are again spending beyond our means. 500 billion has been spent now in Iraq, our perpetual occupation, and this money could have been spent in health insurance, securing our ports and borders, and improving our own infrastructure. Does anyone know now how much was spent on our new Iraqi Embassy?
We are now more dependent upon foreign oil than ever before, with gas rising from 1.20 a gallon in 2001 to over 3.50 a gallon today.
The FEDS are now studying what was done with Norwegian banks decades ago, where banks were stabilized by Federal governments, and bail outs to shareholders (like we are seeing with Bear Stearsn) were not allowed.
Bad performance by banks there closed the bank, or forced the government to take over the bank. I believe we are not far from that now. What we heard yesterday with a FED overhaul was simple: the FOMC will control the banks, the largest financial overhaul in years. Right or wrong? This depends upon if you trust the government anymore than you trust a bank.
WASHINGTON (MarketWatch) -- Treasury Secretary Henry Paulson defended his blueprint to overhaul the nation's financial regulatory structure, saying Monday that initial reviews the plan amounted to less oversight of Wall Street were wrong.
"Those who want to quickly label the blueprint as advocating 'more' or 'less' regulation are oversimplifying this critical and inevitable debate. The blueprint is about structure and responsibilities -- not the regulations each entity would write," Paulson said in a speech formally unveiling his plan that was leaked to the media over the weekend.
Many analysts have suggested that the plan is regulation with a light touch.
Yesterday the higher risk put traders were able to move the April570P to 3.40 tops, and traders that had bought the April620C Friday, or Monday on dips, were able to trade from 9.40 lows to 11.80, and the position remains live, and open.
From trader PC from Germany, new to Advanced Mentoring: "Hi Floyd, I know you're flying today so I didn't attempt a blow by blow. Saw my 610C rise to 11.80. I bought at 9.50 after it opened at 9.10 and rose quickly. I placed a sell order for 14.90, well inside your 16.90
OEX was at 617.21. I recalculated intraday pivot point and found 614.53, R1 619.45.
I had calculated when OEX was 612.72 and found pivot of 611.67
So, with new pivot 614 having been passed and R1 not yet reached I hoped there might be another $2 rise. At this point, forced to leave the computer for half an hour, I came back to find my $200+ profit scratching $110 and was $20 in seconds, everybody say, Hmmm!! I am rather good at this trick.
It recovered to $70 and is now $40. Any suggestions for next step please?"
Two answers here:
1. If one could take a 2.00 profit on an option some traders would lock profits and close out inventory.
2. If one is holding for more upside, following the Dow projections, simply holding the position for another day is perfectly fine.
Second, an email from AM from Arizona:
"Floyd, I like the change to the alert and forcing me to do my own support/resistance and ATR calculations. You're dead right that current market conditions require more and more re-calculations. I use your alert like a "market bible" and print it out each morning prior to the market opening, and use it throughout the day, to remind me to check futures, to check the economic calendar, and now to calculate pivots and support lines through the day. Made 1.50 on the calls today!”
Here's today's entry:
In January 2001 our national debt was 5.9 trillion, and we now have a 70% rise to 10.3 trillion by the end of 2008. "My budget plan pays down an unprecedented amount of our national debt", Bush said in 2001.
Bush tax cuts are supposed to improve the economy and lead to surpluses, but we now owe collectively $120k per tax paying family. We are again spending beyond our means. 500 billion has been spent now in Iraq, our perpetual occupation, and this money could have been spent in health insurance, securing our ports and borders, and improving our own infrastructure. Does anyone know now how much was spent on our new Iraqi Embassy?
We are now more dependent upon foreign oil than ever before, with gas rising from 1.20 a gallon in 2001 to over 3.50 a gallon today.
The FEDS are now studying what was done with Norwegian banks decades ago, where banks were stabilized by Federal governments, and bail outs to shareholders (like we are seeing with Bear Stearsn) were not allowed.
Bad performance by banks there closed the bank, or forced the government to take over the bank. I believe we are not far from that now. What we heard yesterday with a FED overhaul was simple: the FOMC will control the banks, the largest financial overhaul in years. Right or wrong? This depends upon if you trust the government anymore than you trust a bank.
WASHINGTON (MarketWatch) -- Treasury Secretary Henry Paulson defended his blueprint to overhaul the nation's financial regulatory structure, saying Monday that initial reviews the plan amounted to less oversight of Wall Street were wrong.
"Those who want to quickly label the blueprint as advocating 'more' or 'less' regulation are oversimplifying this critical and inevitable debate. The blueprint is about structure and responsibilities -- not the regulations each entity would write," Paulson said in a speech formally unveiling his plan that was leaked to the media over the weekend.
Many analysts have suggested that the plan is regulation with a light touch.
Yesterday the higher risk put traders were able to move the April570P to 3.40 tops, and traders that had bought the April620C Friday, or Monday on dips, were able to trade from 9.40 lows to 11.80, and the position remains live, and open.
From trader PC from Germany, new to Advanced Mentoring: "Hi Floyd, I know you're flying today so I didn't attempt a blow by blow. Saw my 610C rise to 11.80. I bought at 9.50 after it opened at 9.10 and rose quickly. I placed a sell order for 14.90, well inside your 16.90
OEX was at 617.21. I recalculated intraday pivot point and found 614.53, R1 619.45.
I had calculated when OEX was 612.72 and found pivot of 611.67
So, with new pivot 614 having been passed and R1 not yet reached I hoped there might be another $2 rise. At this point, forced to leave the computer for half an hour, I came back to find my $200+ profit scratching $110 and was $20 in seconds, everybody say, Hmmm!! I am rather good at this trick.
It recovered to $70 and is now $40. Any suggestions for next step please?"
Two answers here:
1. If one could take a 2.00 profit on an option some traders would lock profits and close out inventory.
2. If one is holding for more upside, following the Dow projections, simply holding the position for another day is perfectly fine.
Second, an email from AM from Arizona:
"Floyd, I like the change to the alert and forcing me to do my own support/resistance and ATR calculations. You're dead right that current market conditions require more and more re-calculations. I use your alert like a "market bible" and print it out each morning prior to the market opening, and use it throughout the day, to remind me to check futures, to check the economic calendar, and now to calculate pivots and support lines through the day. Made 1.50 on the calls today!”
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