I Trust You Did Well

It is hard to fathom just how sick this market is, and how much FEAR pervades day to day trading. In our Dow projections for Monday we noted potential downsides that could occur and recommended an OTM put.

The August 540P was available as low as 1.80, and could have sold to highs of 3.40. Many traders bought on this one, and were able to sell for 30% and more profits.

Second buys were made on our open August580C, also, as traders watched the day begin with some trepidation, only to blast to the bottom with a 239 point drop, again on FEAR.

Our Dow projections listed a strong potential of another bottom test for yesterday, and the market did not hesitate in falling like a knife. Again, if the market is able to hold at 10,800 and higher we risk a true bear market. If the market does not hold at these support lines, 10,500 and lower are very possible.

Elect smartly. All of this could have been avoided.

Level 3 trader MP had a great testimonial, as he's learning to watch the market breathe:

"Hey Floyd...

Though the market slowly tumbled today...I was able to make some money and put myself in a good position...at least I think I did...let me hear your thoughts....

Here is what I did today...

First of all....I was holding (1) AUG 580 call contract from last Friday at 10.70

I was very patient and waited for the OEX to get to about S3...I bought 5 more calls for 7.50 to give me a total of 6 calls for an average of about 8.00...I was able to sell them a short while later to break even.

Shortly after that I bought 5 more calls for 7.20 and sold them quickly for 7.70...A $250 profit.

A few minutes later I bought for 5 more calls for 7.10 only to sell them minutes later for 7.40...made another $150...

Bottom line...I got rid of my large losing contract from last week by breaking even and I made two smaller trades today which allowed me to walk away with $400. If I make $400/day...that's 80K on the year!!! NOT BAD for a stay at home Dad!!

All the while, I did not try to chase the put...I just played the call signal off of the support lines and took quick profits.

Since the AUG 580 call was still the signal for the day...I ended up purchasing 2 more contracts at the end of the day at 6.30 looking for a bounce up tomorrow...if not...I can still make a 2nd purchase.

What do you think?

I trust you did well yourself"