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.