Do Not Over Invest In Any One Signal

Monday before August expiry the Dow has been up 10 of the last 13 years, and in 2007 broke records on a four year bull run.

It will be interesting to see if history repeats itself. The Dow hit tops of 9401 on Friday, again, and bottom tested at 9193, right within our former Dow projection lows.

Some believe this will be the market bottom, and more bullish fever will occur. Repeating our Dow recalculation on the large downturn in the a.m. the market moved to s1, and returned to r1 by the end of the day.

This allowed profits to the call for best buy trades. with lows of 6.40 during the day to highs of 8.40. This signal was easily tradeable by buys on the way to s1, and sells on the way to r1. 20 profitable calls in a row, one put at break even to slight profit (Friday) and 3 hedge put losses in recent weeks. We're performing extraordinarily well.

Our August 455Put hedge hit highs of 3.40, more than doubling from prior day close, allowing most traders exit at break even.

A few testimonials and thoughts:

DP, the trader that wrote for "putting all his eggs in one basket, and losing on the calls," writes Friday:


"Floyd,
Bought and Sold
a. OEX 460 AUG Puts from 2.6 to 3.5;
b. OEX 440 SEPT Puts from 4.6 to 5.2;

Doesn't look like day for tight profits, may go lower based on eco news and market breadth, but cannot afford to take risk in this market where high freq. traders come out from no where and pull the market up.

And then later in the day DP wrote:

I had that greed in me which said this morning - You closed position too soon deepam.
But looking at the close today - Yes I did exactly what I should in this market.

Have a good week-end.


40 minutes in the AM with good returns, could recover by end of year if I follow guidelines.

Regards,

DP"

*It’s not being smart or lucky. It’s following rules.-Floydian Rule 7890

And from trader Jon:


Floyd

Essentially, I did the same as this guy from the Wed alert:

"Trader DP recently lost big bucks on his holding only puts, and not playing the calls."

How was there a chance to get into the calls? The market never went down enough to get into the calls over the past two weeks at a decent price. Also, if you are supposed to get in at s2, it seems like it never went there. I'm lost."
Jon"

Here's my response to Jon, and to help all of us understand how fast trades take place in this type of market


1. I know it was possible to get in and be profitable on 17 of the 19 calls, Jon, as both my daughter and myself did this, from separate locations.
She got 18.

2. There were plenty of times to get in. On new calculations intraday (provided to you on Twitter) we would hit s1 to r1 repeatedly, which was also r2 on the recalculation.

3. Decent price is the key word. Under many circumstances,because of these market conditions, i suggested following specific advise in the alert to watch futures and to buy "at opening or market', meaning pay what the market opens with, and to then sell for up to X% profits. This was how we made profits many times.

We would also see the market move to s1 or s2 (depending on calculation) and often buy at "decent price" or UP to prior day close. Because of the volatility of the market (or lack of on some days) we watched futures carefully and bought either as "market", or when available near best buy.

Market Update: We list new Dow projections this week that are very short term, and add potential "deeper bottoms" if the market sobers and takes any of the real news hitting the market seriously, such as the biggest bank failure of the year taking place Friday with Georgia's Colonial Bank Group going down. Two months ago this would have caused a 200 point drop in the market. Friday came close, along with softer CPI, but the mysterious end of the day boys came in to move the market right back up, allowing us the call profits.

One trader wrote me mid day "time to trade the call?", which we had already listed as a potential trade. My response was personal, that I would not be doing so, and it's important you all know as subscribers that I make these trades with you, and just like you, there are times I am just too nervous with the bias of the market to make the move. This is not my own bias as much as the concern on support and resistance and Dow projections that we keep exceeding tops, on low VIX. Something is up.

We'll issue dual trades again. Be cautious. Do not over invest in any one signal or bias on your beliefs, or to "lower your cost" Follow the rules. It's the sum of the parts.