A Present...

As a Happy Holidays present Floyd, Terry, and Jenn would like to offer to all subscribers two bank stocks we think ready to soar over time in 2010.

Normally we would share this only with our Premium Blue Chip Subcribers, but here's our thinking:

We already own WFC (Wells Fargo and Co). Buy more. We don't own JPM (JP Morgan Chase and Co). Buy it now.

Take both positions, which we are buying at bottoms that could go lower and continue to buy to lows of 36.00 on JPM and 22.00 on WFC. When you've made buys if the market drops, or whether you have no need to, continue to add to these CORE positions, and have a 25% (or 20%) trailing stop loss, AFTER the second buy has been made.

These are great banks that will gain from TARP and come out fresh. Floyd's money is in them, and I'm ready to also begin playing puts and calls on both positions as 2010 begins.

Lastly, as an added bonus to all subscribers in "sharing", we're adding a new option recommendation. Coal is not doing well, and we think all bets are off on it. Being contrarian we'll play a long term Call on Arch Coal


Buy OSEAD ACI January 2011 20.00 Call. Pay under $5.00. Buy again at 3.00, range. Average costs and hold for at least 9 months. No stop loss

A Shortended Trading Week

This is a shortened trading week because of the Holidays. Trading will be lighter, and portfolios willl be adjusted, so we suspect the potential for two way trades.
We will have limited signals this week because of the low volume, and because our instructions for entry/exit are very specific.

Puts were profitable to 25% on Friday on the downturn, but losses on the call were averaged at 18%, and it was the only trade we could manage all week. That's how low volatility, and how tight the trade range has been.

Alert Update: This same alert holds for Monday through Wednesday, the real trading days of the market. We are closed 12/24 and 12/25 and there will be no alerts.
The alerts Tuesday and Wednesday, because of these market conditions, will merely keep up "updated" on our dual play.


Important Note: The Options Clearing Corporation (CC) has enacted an industry wide initiative known as the Options Symbology Initiative (OSI). The new options symbology will expand the current options series key, commonly referred to the as the OPRA symbol, from a 5 character (OEBLK, as an example) convention to a new key that accommodates up to 22 characters.
This will effect the "names" of the symbols we provide you, and is taking place throughout January, 2010. Please check with your brokerage to understand the new symbols.P

A New Initiative from the OCC

The Options Clearing Corporation (OCC) has enacted an industry wide initiative known as the Options Symbology Initiative (OSI). The new options symbology will expand the current options series key, commonly referred to the as the OPRA symbol, from a 5 character (OEBLK, as an example) convention to a new key that accommodates up to 22 characters.

This will affect the "names" of the symbols we provide you, and is taking place throughout January, 2010. Please check with your brokerage to understand the new symbols.


* 80% of your gains are with 20% of your stocks. It’s the size of the gain that matter. We thought we would share this as your fiscal year ends, and you review your holdings, as we are doing in our Blue Chip service.


Yesterday we saw futures show a 62 point decline prior to opening, at 8.37 a.m., and by 3 p.m. we had seen a drop to 10,269, right near our support lines.
XEKMT, our January put, was profitable finally 25 to 35%. We continue to hold the open call through today for stop loss, or break even. No entry was made to our new call trade yesterday, as movement was so light.

Here's the summary: DOLLAR REBOUND CONTINUES AS EURO BREAKS CHART SUPPORT -- US BOND YIELDS JUMP -- RISING DOLLAR THREATENS EMERGING MARKET LEADERSHIP -- S&P 500 MEETS LONG-TERM RESISTANCE NEAR 1120

A Hard Decision

It is obviously a hard decision. Is the economy really better, and can the market rise more, or is the FOMC being de-controlled, interest rates will rise, and a second stimulus needed? It was this that kept the market in a 50 point range again until 1.30 p.m, making it impossible to trade.

Yesterday we shared a tip on AOL, a stock we are buying in our Premium Blue Chip Option service (www.bluechipoptions.com), and today we'll share that we sold two positions, 1/3 of our holdings, in two Blue Chip holdings for 39% and 46.06%. The first trade I have worked with subscribers to trade in and out of 8 times profitably in 2009, and we still hold a sizable position for the long term.
The second stock we bought on break out, and it returned 46.-6% in 7 weeks, enough for me to take 1/3 of my profits.

We are "cleaning house" at Blue Chip Options, buying and selling to begin the year.

One of our most recent recommendations, and long term positions, is ExxonMobil. We've owned this for years, and just recommended it as a new buy. A day later XOM bought XTO Energy for 31 billion. There are two very positive situations here:

1. XOM is cash rich in investing in natural gas, and expansion.
2. Buffets recent purchase of 26 billion for a railroad, or Black and Decker, Comcast, Stanley Works: these are all mergers and acquisitions, and a flurry of activity always signals a return to busier days. If recent history is any guide, a rebound in M and A also is evidence the broader economy is going to heal. "Studies of the past two decades show deal making is largely a lagging indicator of economic growth, returning a few quarters after the economy bottoms, and slowly building as the stock market turns up and GDP and consumer spending return".

All good signs for economic growth long term.

Whether we have a Santa Claus Rally, or whether it's over, is yet to be seen. We'll recommend a new call trade tomorrow for a longer term hold, until volume and open interest return.



Important Personal Request from Floyd: In 2008 when our little service won the prestigious top 10 advisory services Readers Choice Award in prestigious Stocks and Commodities Magazine I was thrilled, and had reached a personal goal: to be better than the big guys and get rated.
Then, we won again in 2009. And here's where I need your help: I would love our company of Terry, Jenn, and Floyd to win again and we would appreciate your vote.

Head to : http://technical.traders.com/Products/ballot.asp. To vote you must be a subscriber to Stocks and Commodities Magazine, but any serious trader should be already.

Sign up and vote for us at one of the top 10 Advisory Services in the U..S., built out of self help and working with people off my home computer.
I'd be honored to have your vote.

To all OEX AND BCO Subscribers: Be sure to visit our blog spot today : http://www.bluechipoptions.com/ for several new stock tips

We Recommend a Buy to AOL

December quadruple witching the Dow has been up 18 of the last 26 years, with strong gains a number of years. It's sad, but this is the only "fact" we have to go on this week, watching the market simply freeze in a trade range as it approaches former resistance at 10,550. With market moves as light as we are seeing, both in volume, and in the "trade range itself" it makes option trading nigh to impossible.
So, rather than lose money, we'll keep our open signals, for those that have entered, and simply wait the market out.

In the meantime, here's two tips worth your subscription. The first takes time to think about:


To catch a tiger you must understand the behavior of goats.

The second is a stock tip we've recently given to our Premium Blue Chip Option subscribers, who pre-bought AOL. Buying under the symbol AOLWI (when in) traders were able to pre-trade the actual split off of this stock.
As a tip, and because the option market is so lousy to trade, here is our suggestion:

*Buy AOL at market in a speculative account. Set a 25% trailing stop loss, and buy the position again anytime it loses 15%. Hold it a minimum of one year.
This is a bit of complicated trading as when you re-buy you must average your cost and set your trailing stop accordingly.

We believe AOL showed fair value at opening. At 26.00 or less the stock is worth it's price, and the atrocities that have been committed by both AOL and Time Warner can long be past.
To think, the original brand of the internet for sale. This stock will become a company, a true name, or will be bought up. We think AOL may become speculative, and will begin watching it for day trading, and highly recommend a buy to AOL.

__________
By 3 pm the market had only moved 50 actual points. The moves started a bit more at that time, but not enough for sell off.

Personal Request...

December quadrulple witching week Dow has been up 22 of the last 24 years and 7 straight years recently. HIstory has proved a bit "not too useable" this past year, but it's likely for upside prior to the Christmas holidays.

We did not see that in yestedays trading. By 2 p.m.the market had held at 10,550 repeatedly, with mild whipsaws. Movements this light are too hard for option traders.
We are listing the put as open, and a new signal to the call, as it had no volume.
__________________________

44% of Americans say they would prefer President Bush over Barack Obama.
While scientists overwhelmingly say climate change is a threat, 1 in 3 Americans is not convinced of this.

________________________________

Important Note: The Options Clearing Corporation (OCC) has enacted an industry wide initiative known as the Options Symbology Initiative (OSI). The new options symbology will expand the current options series key, commonly referred to the as the OPRA symbol, from a 5 character (OEBLK, as an example) convention to a new key that accommodates up to 22 characters.

This will effect the "names" of the symbols we provide you, and is taking place throughout January, 2010. Please check with your brokerage to understand the new symbols.

For those traders truly wanting to understand the economy and how we have so much more to do, study page r7 in The Wall Street Journal, December 14th editition:

http://online.wsj.com/article/SB10001424052748704825504574586330960597134.html?mod=WSJ_hpp_MIDDLENexttoWhatsNewsTop


Important Personal Request from Floyd: In 2008 when our little service won the prestigious top 10 advisory services Readers Choice Award in prestigious Stocks and Commodities Magazine I was thrilled, and had reached a personal goal: to be better than the big guys and get rated.
Then, we won again in 2009. And here's where I need your help: I would love our company of Terry, Jenn, and Floyd to win again and we would appreciate your vote.

Light Whipsaw on Friday Again

Friday took the market, in light whipsaw again, to market highs of 10,524. 10,550 is a strong resistance line, and the market has not managed to hold past or beyond it.

Because of the whipsaw we've seen the count, or bell curve balance, is now again at 0, showing no bias, besides our seeing a market that is rising, and the talk of a Santa Claus Rally.
All calls were profitable, and puts were sold at stop loss, for a break even and hard week to trade, because of the moving whipsaw around a 100 point range. Friday is quadruple witching expiry.

We have new Dow projections today, but make note of the similarity to the range we've been suggesting, and hitting, for the past 20 days.



Weaving Straw Baskets-Fifty Steps to Understanding

1) People cannot take in more than 5 tasks/thoughts at one time. Learning to control input is key to knowing when you are at or “over your threshold.” We all have a threshold in which input overcomes us.

2) More could be done in business, and in politics, if simple playground rules “no cheating” were put in place before any “deal” and Cheaters had to pay by doing public service, but that is just a dream.

I want Tom Delay mowing that White House lawn.

3) Life is too short to do business with assholes.

4) Use your time. Have your goals around your values, but be armed to stop believing even what you believe.

5) Be open to the world. Trust no facts. Question authority.

News I've caught while overseas I find valuable:

*Congressmen win over banks and some banks will lower large payouts to employees. Here we are trying to control income, not understanding still how Wall Street works, and not yet addressing the regulatory issues.

The Central Banks plan "exit strategies"

*Obama's plan for job creation, outlined earlier this week, can accomplish "psychological relief" if the banks are given incentive (forced) to begin loaning to small business again.

And lastly, any market that has struggled as it has in the past two weeks, the length of time of our Dow projections, shows a market and an economy that has had such a euphoric run that there must soon be a "top," even short lived.

I'm back Monday and have provided a new signal IF the market hits new lows today, with futures up 33 points at 9:12 am

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Weaving Straw Baskets-Fifty Steps to Understanding

1) Much of what is smart repeats itself, and is never done.

2) All the religions really say the same thing, and sadly it will be religion that could divide the world.

3) There is no such thing as an absolute.

4) There is no real black and white.

5) We self sabotage often so that we do not “get something we want” as we want to punish ourselves for things we have done we feel guilty for.

6) It takes discipline to perform. Discipline is our way inside ourselves, as we become rather than think.

Tight Profits

Profits were tight on both the call and put, both only profitable to .50. With the lack of moment in the market we'll keep both signals open. The bias to 3 to the call is light. It is an anything goes market.


Weaving Straw Baskets-Fifty Steps to Understanding

1) We are fearful of our bodies. Of sex. This is true more in the U.S. than most nations, and is something to be studied. But in the meantime, have more sex.

2) The old funeral question has merit “What would they say for my epitaph, and who would come?” It goes well with a general personal and introspective look that we must do and only you can do, and that is to look inside and ask what you contribute, and if you are good.

3) Things are not as they appear. What we see is not what is, but only what we know so far.

4) Much of what is smart repeats itself, and is never done.

5) All the religions really say the same thing, and sadly it will be religion that could divide the world.

Breaking the Ice

The market yesterday finally broke the ice and the Dow hit bottoms of 10.209 by 10 a.m. OEBXT puts were profitable with low buys of 3.30, and high sells to 4.60 by early afternoon.
Astute traders watching by the minute, however, are the ones making those trades. Read our open and new signal instructions carefully.


The argument is: will it finally fall more, or has it hit a bottom, and we'll have a short December upswing? Stock shifting in funds takes place, and for tax reasons, and normally excites the market, and many believe in a "Santa Claus Rally."

Bernanke has already announced that he'll keep interest rates low. Obama is doing the circuit on ideas for creating jobs.
And....we are near a Fibonnaci top.


Weaving Straw Baskets-Fifty Steps to Understanding

1) There are simple ways to release unwanted stress.

2) There are ways to learn to relax and feel better physically.

3) There are ways to be happy.

4) Life is typically unfair and a series of negative events that are overshadowed in our memory by the positive events.

5) Few people enjoy their work, making most of their life TV, sleeping, or doing something they do not like. These people lose their strength and general well being as time progresses.

The Market is Frozen

It is this simple. The market is frozen. We hit highs of 10,483 by 3.00 p.m.,and lows during the same whipwsaw of 10,320. The 520 Calll was profitable for up to 1.00 per contract in extremely hard and tight trading. We'll keep it as an open signal because of this, with NO second buy, waiting for a what we think might be a final push to 10,550 and beyond.

But as we noted in our alert yesterday this was high risk, and today is. When no bias is clear it's any "anything goes market" around trigger points. We will additionally list a similar put, also high risk,for those that want the exposure to a double risk.

Floyd is not personally trading this market. It's too flat to make money.


Weaving Straw Baskets-Fifty Steps to Understanding

1) We are here to learn lessons and will struggle through until we learn them. They may be very simple lessons.

2) In all steps of the life experience, and the dramas, people tend to put love in the background, or it becomes part of the events.

3) Love is life.

4) If you repeat an action many times, it becomes a habit. If you continue, “using the habit” it must be something that you value, or the habit will become instead a self-destructive tendency.

5) Unrealistic expectations occur from being dishonest with you. If you expect success at something you must earn it, and few that are lucky last.

6) The question What Do I Want is the most important question you will ask yourself in your life. Your answer defines your happiness. The question is not to tell yourself what possessions and monetary dreams you wish to come true, but to answer, “What do I want”.


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Many traders write me personally and get to know me. It's part of this service. As students progress to Level 3 or Advanced Mentoring invariably they want to "replicate" what it is that I do.
So, here it is:

1. I trade only when I am sure.
2. When I am on a run of successes I trade more, and when I begin to lose I stop trading.
3. I take "fishing days" where I just watch the market.
4. All that matters in economic timing to me is the next two weeks, not the next two years.
5. Stocks must have a reason to go up in value besides performance or product, and I recognize this as I invest.
6. Rules are part of our system, and I follow them. There are times I vary, but only slightly, and not often.
7. Trading is pitting my mind against others than are trading the same signal. I must recognize this.
8. When I fail, I write down what went on. Was it me? Was it emotions? Or was it just the market with a sudden surprise?
9. When I overanalyze I stop.

What a Day

What a day Friday. The market moved right back up to 10.557 by 10.30 a.m. allowing traders to sell out at profits on the open Dec 520P, just in the nick of time.
Job data came in "moderately" good, and Obama has tried to clarify and explain the job situation is not as simple as we Americans think. Much like why we had to bail out banks, not because it's right or normal, but because the situations we've inherited are so severe that the solutions are ones that are not ideal. We as a nation seem to never understand detail.

The position hit the same top we've experienced time after time before beginning a dramatic fall, all before noon. The NASDAQ has now returned all the 40% 2008 losses.

For those that criticize Obama for everything, we neglect to discuss banks that are repaying TARP money, a stock market dramatically up, and corporations downsized that showed good balance sheets.

For those that have forgotten the Emperor Bush deficit, or that this financial debacle began long ago, not on Obama's watch, I have watched in awe as the neo right has used theater to influence the American people that we are becoming socialistic, simply for giving rights to those that have formerly never had rights.

When Glenn Beck, and Rush Limbaugh, and Sarah Palin are the spokespeople for many I know that much of our country is already lost in stupidity, and that more and more are buying guns to "protect themselves." (I'm 59, have traveled in over 79 countries, and have NEVER had a need to use a gun).


Weaving Straw Baskets-Fifty Steps to Understanding

1) Many of us live in a circle of pain, in which we repeat the same negatively dramatic action with a group of others, all interacting within a black comedy drama. And able to be resolved.

2) Most of us do not know really know ourselves. When I ask clients to “tell me about themselves” they tell me about their jobs, their possessions, and lastly their families. They never mention themselves.

3) Most that appears obvious is not. Most that does not appear obvious is.

4) We are all in therapy at every moment. Most of us just don’t admit it, or use it.

The Market is at a Stalemate

The market is at a stalemate. We hit highs of 10543 by noon, and lows of 10,380. We're making an adjustment to our Dow projections below.

Our new signal OEBLD DEC 2009 520.0000 CALL was available for .50 to 1.00 per contract profits, but it took true day trading to watch the market for the tight profits.

We will list this call as an open signal because of the difficulty in trading it, but not yet list a put. We see more odds of a new Dow projection high.

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"Gold's gyrations are the Dow Jones Index of Anxiety. When investors are scared about inflation, political turmoil, debt, financial breakdown-demand rises....
When things calm down demand and the price of Gold subside.
All that has changed with the advent of ETF's for Gold. In the past, if one wanted to buy gold, you had to really buy the raw material, the coin, the commodity, or invest in gold mining stocks, each fraught with their own risk. When the ETF Gold (GLD) and other versions came on the market the individual investor, and smaller emerging nations, were suddenly able to be investors.

For the past 38 years, since Nixon the idiot took us off the gold standard, the world has been engaged in the historical experiment of a single currency, the USD, that has no link to Gold.
Gold is the one currency that central banks, in any nation, can't print. It may take us a few more years for us to realize this, but the central banking system is fraught with error.

So to say this well: The Bank of India just bought 6.7 billion in Gold.

Weaving Straw Baskets-Fifty Steps to Understanding

1) Most things are manipulated by the few at the top of the capitalist pyramid that control the outcome, no matter what is done.

2) We only have what we remember.

3) In our reality our mission is really to give, love, flow and make and have memories.

4) Our perspectives can change in a minute. Values and goals can shift as fluid water. What we thought becomes not what we think.

5) Money must be understood. It is a “construed value” commodity, only worth the value that we put on it.

Gold Reached a Record

Futures were up 78 points at 6 a.m. and the line from Bloomberg says it all:

Stocks Rise Worldwide as Dubai Concern Wanes, China Expands; Dollar Drops Stocks rallied from London to Shanghai and the dollar fell as Dubai said half of its debts are “stable” and Chinese manufacturing grew at the fastest pace in five years. The yen fell the most in seven weeks against the dollar, while gold reached a record.

This is what happened in overnight trading, proving Floydian theory that the Dubai debt would be covered within days, and that the losses were all known. And the next piece of pre-market news:
√U.S. Stock-Index Futures Gain as Alcoa, Barrick, Exxon, Citigroup Advance U.S. stock-index futures advanced, indicating the Standard & Poor’s 500 Index may extend yesterday’s gain, as China’s manufacturing grew last month at the fastest pace in five years and commodities rallied.U.S. Stock-Index Futures Gain as Alcoa, Barrick, Exxon, Citigroup Advance U.S. stock-index futures advanced, indicating the Standard & Poor’s 500 Index may extend yesterday’s gain, as China’s manufacturing grew last month at the fastest pace in five years and commodities rallied.

It's with this kind of "bravo" pre-market that typically leads to reversal.

Weaving Straw Baskets-Fifty Steps to Understanding

1) The majority always leads, and always forgets history.

2) Everything is really okay.

3) Everyone wants to dance, many in different ways, many so they are never seen, many so they wish they could be seen, and many that are always seen.

4) Negotiation is the art of understanding FEAR and GREED.

5) The mood of the public is first trended by stock markets, which show levels of optimism, and supply and demand in the market place.
The market resurged dramatically and was up over 140 points by 2.30 p.m.

Only traders following futures and paying above prior day close were able to profit on our Dec 520 Call, profiting to 20% but most of our traders stayed out of the trade, waiting for bias.

We now have a bias, but think we are seriously approaching a market top.

America Loves War

For all the fear over Dubai and the default, the market opened without a bang in early trading, and promptly moved up over 31 points by 10.16 am. Like clockwork we were able to buy the December 500P for 5.80 on the first drop, and sell to 6.80 to 7.20 by midday for tight profits.
The Dow again reached 10,404 in early morning trading, and settled to lows of 10,223 before meandering around for hours. It's proof the bears believe the market will soon fall, but a 68% rise as we have seen typically takes 108 cycle days of downside, and it's unlikely to see a complete fall out.

America loves to kill and loves war, so how we react to Obama's "dithering" when he announces tomorrow night will also influence the market, just as the situation in Dubai has.


What many of us do not realize is that the world is only as we know it, and that does not mean it is as it is. We see only what we are able to see, and know only what we know.

This sounds so simple, and so obvious, yet remains the core of our issues as a a world people. It begins with "the world is flat" and now with electronic newsbites tells us that "two people crashed Obama's party" and we become interested in the security of the issue, or that they are "wanna be" reality TV show stars. This takes us from our real thinking as a human, which is to be better, help others, love, enjoy life, and perhaps learn more about ourselves, or the world.

When we trade options we are choosing a directional bias, and analyzing what "strike" point will be best to buy at a best price for us, from others, and how this "strike" will trade against the market and if we can get a premium price when we sell it. This is playing poker. Selling fruit. Buying and selling flowers.

Our goal is to take advantage of someone else. That is option trading. It is also an art of personal zen, as you are trying not to be taken advantage of. Even by yourself.

Over the next 10 days I'll be sharing with you "Weaving Straw Baskets," 50 rules of life I use in trading:

Weaving Straw Baskets-Fifty Steps to Understanding

1) A rock is not hard.

2) We only know what we know.

3) We do not know what we do not know.

4) There is no real such thing as “I”

5) There are people that do not read at all, and many people that do not read well.