We need the market to really move, to return to volatility, and and end to flat lining to make some money again :)
This is a market in which support become resistance, resistance support, and each day the market hovers. Yesterday's immediate drop off was an indicator of why puts are at such a high premium, and the rebound at 2.00 p.m. was again as we now grow to expect it.
A trader wrote me today to ask if I was trading the call, and wasn't because I was "busy on working on Blue Chip Options" website, but also simply favored the put. By the way, the call was profitable to a buck a contract, right to our rules. And all before the magic 3 p.m. hour when the great bull, or plunge protection team, or Goldman Sachs, or a fairy comes in to suddenly build the market back up to resistance lines.
If any "summer rally" takes place note that it s historically the weakest rally of all seasons. “The number of workers on jobless rolls is declining is an encouraging sign for the U.S. Economy, although the decrease partly reflects people exhausting their state benefits.“ Some economists say this is consistent with what happens near an end of a recession. The FEDS say new claims, when smoothed out over four week averages, are actually declining. With this, there’s no doubt we’ll hit double digits, over 10% in unemployment later this year, which doubles to over 20% when those that are unemployable, still cannot find jobs, and are caught in declining industries, the homeless….you name it. Each % of unemployment the American people pay for.
* Overbuying and overstudying the market confuses your thinking. Limit your input. But, at the same time, learn well. I find that I know what I should read, what is valuable to me, and I read everything about it.
Make best use of this alert which has a process of analysis for both index options, and how to trade ETF's and stocks.
And please, I need to pitch again:
I have created a website www.bluechipoptions.com with the help of daughter Jenn, and artist in residence Terry Brown, our webmaster. It is filled with blogs, articles, videos and ways that I also trade the stock market, from ETF's to core stock recommendations, to stock options.
Friends, this is the best work I have in me, and it's just beginning. I need your subscription:
http://www.oexoptions.com/BlueChip/BCO-Subscribe.html
When I now see something important I may recalculate the Dow for us, and it's available to everyone on Twitter: http://twitter.com/Bluechipoption
Interesting as we Twitted out re-calculations by noon and the market hovered at the new pivot point much of the afternoon.
In recent days I've been performing a test on your reading and comprehension ability, and how many of you actually read my "dribble," which I hope you do.
I used a line, "We cut our winners short and let our losses run." A few bright subscribers wrote: "Other trading services teach the opposite...let winners run and cut losses short."
What I was writing was what HAPPENS, not what should be. Joe the Trader, most of all investors, "cut winners short (to make profits) and hold something too long ("let losses run") because they are "sure it will turn around."
The point of my exercise is for you to not "read a maxim," but analyze what you are reading. This is how you will become a trader.
I will make this promise: if you think it is easy to do this, and you will get rich, you are guaranteed to lose. If you trade to learn, practicing and studying, you can learn to make good profits every day.
Trader JK wrote:
> Hi Floyd,
>
> In the OEX alert Theoretical Dow Projections, why do you label numbers as resistance that are below the current Dow price? (e.g., 8574-Resistance & 8860-Resistance)
>
> Normally one would consider these as potential support, but my assumption, perhaps incorrect, has been that if the Dow falls below those numbers then they would become resistance if the Dow began to move back up. Is this correct, or do you have a different reason for calling them "resistance"?
>
> Thanks,
>
> Johnny
My answer: Good question. Right now I am seeing a shift in support and resistance, for the first time, and probably because of an overbought market.
Right now support and resistance lines are actually intermingling. I"ve never seen anything like it before.
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