Tuesday, September 30, 2008

What a Trading Extravaganza

The day opened with a world market not believing what was being done, or not done. We are closer to a 4000 point drop than the average McDonalds' Super Sizer American with a Hummer and some good patriotic country songs can perceive. When the market crashes, if the market crashes, if the banks crash....banks will fail right and left, and money will truly NOT be real.

By midday we all knew that the government could not agree on a bill, and the market hit bottoms at 10,360.

It was such a large drop today that we can only begin to imagine what the next drop will be, if we cannot gain closure. We had one of the largest drops of all time, and the Great Depression is upon us.

Many day traders had fun:

"The day opened with a world market not believing what was being done, or not done. We are closer to a 4000 point drop than the average McDonalds' Super Sizer American with a Hummer and some good patriotic country songs can perceive. When the market crashes, if the market crashes, if the banks crash....banks will fail right and left, and money will truly NOT be real.

By midday we all knew that the government could not agree on a bill, and the market hit bottoms at 10,360.

It was such a large drop today that we can only begin to imagine what the next drop will be, if we cannot gain closure. We had one of the largest drops of all time, and the Great Depression is upon us.

Many day traders had fun:

"What a trading extravaganza. buy, sell, $0.50 here, $1.00 there.

Spreads so large I'm scalping 50 cents just on the spread."

Now, of course, we will not learn a lesson on this, as we never do. We actually will believe the issue is "the banks on Wall Street" when it is much much more.
Simply: this is supply side degulated economics falling apart.

"The Bush presidency began with the destruction of the Twin Towers, and is ending with the destruction of the tri-trillions-the money spent on a foolish war in Iraq (653 billion and counting) and on a bailout of the financial sector gone hog wild during the Reagan administration of Deregulation. Bush and Republicans have revived Big Government in the worst possible way: the middle class will pay, in perpetuity, for the sins of the powerful."-Joe Klein, Time

Do not be deceived that the Democrats "caused this", as we now read and hear, and that they were complicit in this bribery. Although the Democrats in Congress were indeed part of the problem, and have guilt, this bail out is NOT a financial bail out alone, but a bail out of supply side economics. This trickle down "free enterprise" methodology historically has the next generation pay for falsified debt. Do NOT forget that McCain, Bush, and Cheney, less than one month ago all agreed "the country is not in recession,but struggling for bearing"

McCain is trying hard to move the widget from the center, and to use the great American Republican "fear" game that works so well....we will be safer with McCain than Obama, when in reality we are LESS safe than 8 years ago, with 653 billion in debt on Iraq alone, and with a world that sees us as "idiots imploding".. buy, sell, $0.50 here, $1.00 there.

Spreads so large I'm scalping 50 cents just on the spread."

Now, of course, we will not learn a lesson on this, as we never do. We actually will believe the issue is "the banks on Wall Street" when it is much much more.
Simply: this is supply side degulated economics falling apart.

"The Bush presidency began with the destruction of the Twin Towers, and is ending with the destruction of the tri-trillions-the money spent on a foolish war in Iraq (653 billion and counting) and on a bailout of the financial sector gone hog wild during the Reagan administration of Deregulation. Bush and Republicans have revived Big Government in the worst possible way: the middle class will pay, in perpetuity, for the sins of the powerful."-Joe Klein, Time

Do not be deceived that the Democrats "caused this", as we now read and hear, and that they were complicit in this bribery. Although the Democrats in Congress were indeed part of the problem, and have guilt, this bail out is NOT a financial bail out alone, but a bail out of supply side economics. This trickle down "free enterprise" methodology historically has the next generation pay for falsified debt. Do NOT forget that McCain, Bush, and Cheney, less than one month ago all agreed "the country is not in recession,but struggling for bearing"

McCain is trying hard to move the widget from the center, and to use the great American Republican "fear" game that works so well....we will be safer with McCain than Obama, when in reality we are LESS safe than 8 years ago, with 653 billion in debt on Iraq alone, and with a world that sees us as "idiots imploding".

Monday, September 29, 2008

Last Friday Calls Were Profitable to 44 Percent

Friday calls were profitable to 44%, leaving us profits all through one of the most shocking financial weeks in history.

For those of you that watched the debate, you were seeing TWO complicit politicians that HAVE BOTH (AS HAVE BOTH PARTIES) been influenced by lobbyists and Washington, and are BOTH part of the problem.

The issues discussed were pure babble, as nothing either have planned to do can ever occur now, as our financial situations have changed forever.

Iraq is the real issue, and you either believe we should not have gone, and should leave, or you believe we must be there to "win" and "protect Israel" and the world.

I am so appalled that America could even believe McCain and "we must be in Iraq, the surge is working", or that "Obama a Junior senator not knowing the difference between tactic or strategy".

If anyone saw Sara Palin interviewed by Katie Couric and will still vote for the possibility this woman could be the leader of the world, then all of the problems we have right now are more than deserved, and may we become an obese nation of indebted people.

China is beginning to cut off their buying of our debt. The USD grows less in value each day.

How was the USD and how was the deficit 8 years ago?

Who was in charge?

(My absolute favorite is the fodder now circulating that the entire housing mess was created by the Democrats. The false financials and lack of regulation were led by Abramoff, Delay, Rove, Scooter, war in Iraq, fake bids to Halliburton, and oil lobbyists. The mortgage mess is only part of the crash, and what we are seeing)

With this said a bailout will hit the news in some fashion as this weekend continues, or early next week, and it is likely for two way trades.

At OEX Options we will only trade to the call, for the short term, even if we miss a dual signal, as we think the market ripe for another dead cat bounce.

This is the fact: Under President Bush, and under a Republican administration, it is very likely today that IF an agreement for bailout is not reached, that the stock market could drop as low as 7700. If the Democrats are given the blame for this, or if this country elects McCain over "the fear of terrorism invasion" (what Floyd calls the 9/11 Rebublican "fear" game) we will enter the next great Depression, under an 8 year Republican watch. Supply side economics, which Floyd has preached about for years, does not work. This is the issue, NOT whether to bail out the banks. The issue is "who is in control", and who is being represented (not the Middle Class).

Do not think of silly things like "abortion rights" or "family values" when our world as we know it may be ending. This is not God talking time, but time to really think about pure government logic. Deregulation does great for those being deregulated, with no controls, and with a government that borrows its money from Communist China to support a war, and ongoing potential conflicts. If McCain dies, could Sara Palin honestly represent you as a citizen to the world?

Friday, September 26, 2008

It Is Precarious

This could trigger two way trades, with a larger upswing to the call on FED action. HIGH RISK, but calls lead

JPMorgan Chase May Acquire Washington Mutual After FDIC Seizure


Sept. 25 (Bloomberg) -- Washington Mutual Inc. may be seized by regulators later today and parts sold to JPMorgan Chase & Co. in what will rank among the biggest banking failures in U.S. history.


Bush did get it right. Sadly. I consider this man an embarassment to us worldwide with his style and bravado, and not truly even understanding "recession", but his explanation of the situation was succinct. It is precarious.

Originally I stated, 7 months ago, that we were IN a recession, and that it would typically (following the definition of recession) end by October of this year. Sadly, I was wrong here, as the Fannie, AIG, and brokerage lies have gotten the better of us, and we now truly face frightening decisions.

Constitutionally everything Paulson is advocating is illegal, and regulation without clear accountability, and a bail out of greed, led by lobbyists that have had Congress in their pockets.

Sadly, there is little alternative, as Buffet so clearly has stated, and John MCain missing the debate to the "be there to help" is such fodder than only the flag wavers will agree. It's time to quit wasting time, and get relief in place. The world economy is dependent upon our moves.

We saw initial reactions yesterday with a market that hit tops of 11, 169, and bottoms of 10,787, and struggled by day end to close above 11,000. This is trade range bound movement, with a market "waiting for action".



From Republican Level 3 subscriber, RC from Oklahoma, my dear friend:


"1999
Under Clinton Administration removes regulations on Freddie and Fannie


Sept 10, 2003
Bush Administration and Treasury Secretary Snow called for Regulations on Fannie and Freddie
Barney Franks “Freddie and Fannie are not in financial trouble and we do not want to prevent low income families from being approved for home loans”

April 2005
Alan Green calls for regulations on Fannie and Freddie
Blocked by Chris Dodd, Barney Franks and Chuck Schumer

May 2006
McCain writes a bill to regulate Fannie and Freddie
The bill is blocked before it could hit the floor by Barney Franks, Chris Dodd, Chuck Schumer and Barack Obama

Sept 23, 2008
Republican Senator Tom Coburn calls Barack Obama for him to agree to an investigation on top executives at Freddie and Fannie, also Senator Coburn asked Obama to meet with McCain and put together a single statement with McCain regarding the financial crisis.

At every turn regarding Fannie and Freddie are Barney Franks, Chris Dodd, Chuck Schumer and Barack Obama, the same people who received record contributions from Fannie and Freddie."

Thursday, September 25, 2008

Trading Was Very Hard

Bush was brilliant; he told the truth.

The best way to describe the market is this:

10,968 as the high, 10,713 as the low. The 530P moved from 10.30 to 13.20 and the 580C moved from 5.80 to 7.80.

It was a day where the market studied what is NOT happening, and the market had FEAR as to what could happen.

Only tight profits were possible, and trading was very hard. I suspect it will continue to be, until someone takes ownership of the situation and Congress acts.

____

Reader RC, a devout Rebublican, and I may be more in synch than ever before.

Sarah Palin is as qualified as Barack Obama. That's one thing he is dead right on. Bush was no more qualified as Governor of Texas, and the bankrupter of 4 businesses then McCain, the lifelong patriot, Obama the "change" speaker, or anyone else.

The question is who you want to be the CEO of a large bankrupt company. That's what we have.

And, he commented, "we do not just want change", correct, and he's right...we do want right change. I have yet to hear how McCain will change anything, only that he is a maverick, and that Palin fought the status quo in Alaska.

Personally, I'm unhappy with both our candidates. It's a mess. I'll shut up on who is right, and who is wrong, and simply ask you as subscribers, as taxpayers, and as citizens to not fall for FALSE FACTS, to not "buy the ad" rather than the candidate, and to truly analyze the implications of the situation we are in.

Buffet knows what we must do. Perhaps we might listen to the world's richest man, and not Congress, or candidates: Buffet is also a Democrat.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a8B.QQmw5A8M&refer=home

Wednesday, September 24, 2008

The Great Depression Was Averted... For Now

Oil was manipulated Monday by Short Sellers. The market itself has been manipulated for years by shorts, by the large investment bankers that have lied through their teeth, and the house of cards has crumbled.

I repeat again: CREDIT CARD FRAUD (banks misrepresenting their own exposure) is next, as our nation is run on credit, and it is now catching up.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aMSdh.rgPmx0&refer=home

Now, Congress is playing games with the worldwide bailout, and the market reacted beautifully yesterday, with profits for traders to both put and call.

Smart traders were able to buy the Oct530P and sell for 2.00 to 3.00 per contract, and those that held the Oct580C on day trades also locked 2.00 per contract. We're left with an open signal to the Oct600C, and more potential two way trades.



Several traders reported dual profit trades on put and call during the market whipsaw this afternoon.

YES, the Great Depression was averted last week. It was postponed. And you fell for it.

And now, we're figuring out if we can even pay for it.

When you vote in November, ask yourself WHO has the greater chance to make REAL change. And if you don't believe change is needed, you're hopeless :)

Tuesday, September 23, 2008

A Bit of Sobriety

Well, by Monday a bit of sobriety may have hit the markets, as we began the real study of what we've done.

And oil surged $25.00 a barrel. Oops, suddenly America is thinking a bit of conservation again:)

But we'll drill Alaska, that will solve it.

Monday's market moves allowed traders to take two buys to the call. We did not gain entry to a put with the immediate downside, but continue to see potential two way trades taking place this week.

Bear in mind that a market that runs 450 points UP on Friday, and 330 points down on the following market day is a market that no longer believes, and cannot be validated. NO government actions seem to slow the fall out. The plunge protection team did not win this time:)

____

"Obama is a socialist" This is the best one. Rumors pass around the internet now showing the "socialism" of Obama.

And to think, after what happened last week!

Obama is a classic politician, a Democrat, and perhaps the better of two evils. I care most what people the President will surround himself with.

Articles have been sent to old Floyd on "Obama the socialist", utterly amazing when we have just seen a Democratic and Republican Congress, AND a President that has utterly ignored economic controls for 8 years, that have just approved a SOCIALIST (God ford) Government bailout on our GREED.

What Paulson has led is a FDR type socialized bailout of our banking and financial sectors.

Many believe this action has diverted The Great Depression 2. Perhaps.

And a quote from a young voter, ready for Palin:

"I knew absolutely nothing," said Tyler Deeds, 19, who made the drive from Auburndale 90 miles away and waited more than 5 hours to see Palin. "I couldn't even tell you who the governor of Alaska was."

But Deeds, who plans to enter the Navy soon, said he "tends to cling to my guns and religion" and he quickly grew excited about Palin's candidacy.

Damn right. The right to bear arms, and Pray to God. We need old fashioned family values:)

It is NOT the President that decides things, but those that he surrounds himself with. It's evident in Bush, and will be with whomever wins, so make sure you are understanding who the OTHER players are that will win.

We do not elect "one person", but an entourage of people that work with the CEO, or President. We are deciding who we believe will be the best CEO.

Monday, September 22, 2008

The Shell Game

Enough happened Friday that new history has been made, and perhaps The Great Depression 2 was averted, or worsened.

I'll let you read and listen to the babble from TV and news. You're being inundated.

But these are facts:

*This was a classic socialism move. This bail out, 1 trillion (2 Iraq Wars) is a TAX the American citizens will pay. We will. Our children will. And the debt will be so monstrous that truly no economist could predict how this will truly affect our economy.

Of course, the market took it with complete and euphoric abandon, as our money market funds were now guaranteed by the Government and historic bank failure worldwide was averted.

And most Americans won't even know it, simply hearing of the "big things" and having no understanding of it.

While financial stocks and the broader markets appear to be recovering, much of the gains are a result of short covering, particularly in the financials. Bloomberg reports that short interest in financial stocks increased this year to 36 percent of all shares sold short in the S&P 500. The true underlying strength of the rally will not be clear until all the shorts are covered.
Until the details of the Treasury plan are released, and there is bi-partisan support for it, the market recovery is at risk. Republicans may balk at a $1 trillion bail out and Democrats will not support a plan that rewards Wall Street for its excesses but leaves Main Street struggling and with an added burden on taxpayers. With only a week before Congress adjourns, there is little time to agree on the biggest Government expenditure ever contemplated.
The bailout will almost certainly depress the dollar further adding to inflationary pressure on imports and may do little to improve the economic fundamentals, so while we may see a short term bounce, the underlying trend may still be downwards.

Calls have the upside. Reality may soon set in, as the world begins to see what this will cost, and that none of it is real. Please read that again. None of the money we are discussing and reading about is real. It is paper, on paper, and in spreadsheets and financials. It is the "moving electronically" of "nothing". We have created the value to the instrument.

And our instrument, the USD, now has no value. It is pure debt.

This is the fault of: 1. American and our GREED 2. ALL of Washington, Democrat and Republican 3. Supply Side Economic thinking, led by Greenspan and leading with Reagan Administration, and moving from there through each Presidency, and finally fueling the mass arson under Bush, as we "warred" and "debted" and allowed GREED to lead.

You are at fault if you are not a true student of "truth" which is NOT what you read.

And most important, this shell game has not been approved or finalized.

Saturday, September 20, 2008

The World Has Not Ended

The world has not ended. However, we are watching a market that yesterday went to 10,409 as a bottom, and 11,116 as a top in ONE day. The October 560C was profitable for all, selling to highs of 18.00.

Although I have missed put trades for us this week in this downturn, we've still been profitable on each and every signal.

What is happening you will read endless babble from analysts (most of whom are now out of a job), and the news will inundate you with false facts.

It's simple. Greenspan's Reaganomics, supply side "let it happen" free enterprise methodology has built a continuum of bubbles and allowed a Wall Street banking game to never end. There have been no regulations, and our free enterprise system is NOT free enterprise, but a game ridden with false financials, and which lobbyists can get the most with their Democrats or Republicans in Congress. And....it has all come falling down.

Read carefully: CREDIT CARD DEBT is NEXT, as each bank has falsified their exposure risk, just as each bank and brokerage falsified this same risk with mortgages.

Our own government falsifies our unemployment facts, and our debt. And the Republicans tell us that they will not raise our taxes. Sigh. Why do we continue to fall for tricks that affect us so, and why do we not learn?

From a Level 3 Subscriber, AG:

This year I have become so emotionally involved with what I see happening to this country that I have a very hard time connecting with my family of origin. I have realized how different I am from them in my ideals. It is sad but also I think refreshing to finally stop trying to fit a round soul into a square hole. I would gladly pay higher taxes to help keep America rue to the ideals under it was founded. But I think for many the pocket change that is dangled in front of their eyes in the form of taxes is enough distract them as their banks, morals and future of their children and for that matter this beautiful earth is pillaged. I don't know why even "educated" people fall for such obvious tricks. But you know I am finally starting to accept that they will have to live with their decisions and as much as I love them I cannot force their eyes open.

One acre of farmland in Iowa can earn $1200.00 an acre growing ethanol corn, and $40,000 an acre with a wind turbine.

Our government supported ethanol production, raising the price of our food. Want to know what lobbyists did this?

Using McCain public speeches the estimated cost of McCain's tax policies will be $7,000,000,000,000. It's a bit better, however, when analyzing what he write in his campaign, not as grandiose as the speeches, and he'll spend only 4,200,000,000,000.00

President Bush pays his "fact checker" $60,000.00 a year. I hope we pay the next President's fact checker a bit more, and have him not work for the President.

McCain has increased his donation base 3 to 4 after he endorsed offshore drilling in June.

It is critical as we read "mavericks for change" that we make sure WHOMEVER we elect is NOT part of the system. If they are, it's more of the same silliness, and with McCain, ongoing war. Where does the money stop?

Thursday, September 18, 2008

The Market Plunge

The market plunge yesterday is quite intriguing, and for several reasons:

1. AIG is a heavily lobbyied insurance fraud company. This means they have CREATED fraud in their false financials, their lobbying of Congress, et al, and we as tax payers will now foot an 85 billion dollar bail out.

2. This fraud should have been noted several years ago when their slimey CEO got caught.

3. Unlike other times in the market, such as earlier in the week, the market saw the government bail out as "the end" and a 449 point turndown occurred.

Analysts and investors are now studying "the end of the world" and "market conditions that could lead to a depression".

Yawn. Nothing has changed fundamentally from two weeks ago, except our mood.

We made two buys to the call yesterday, and will hold this position for a tight profit, or stop loss, and will NOT recommend a new buy at this time.

This is a market Floyd believes truly is unreadable.

This is what we should worry about:


NEW YORK (MarketWatch) -- One of the original and largest money market funds has put a seven-day freeze on investor redemptions after the net asset value of its shares fell below $1, in a rare instance in the fund industry of what is called "breaking the buck."


13 Middle Eastern Nations have announced plans to pursue nuclear power since 2007. It's not just "Iran."
World war, or try for world order?

Citigroup (C), we told you earlier this week, made 18% of its profits from credit cards in 2006. The percentage in 2007 was 79%.
Want to know what bubble will burst next?

Yep, it's a "sound economy" as the politicians tell us:)



"I have greatly enjoyed your commentary on the US economy and the reflections on the campaigns. It is amazing to me how incredibly gullible the public can be. I almost think the republican party want our schools to fail so that there is no intelligent conversations in this country to contradict the lies and propaganda they feed the general public. It is truly amazing to me. I also cannot fathom why we would stand by and allow a person( Bush ) to have trampled on the constitution and also led to the deaths of many Americans and countless other peoples to go without even impeaching him. We do really live in very sad times for the US. I am afraid that the beacon of hope we once were is fading quickly and if we do not wake up soon we will eventually wake up to disaster"

Wednesday, September 17, 2008

Supply Side Economics Fail Again

The government chickens out and will bail out yet another slimy company. The market will take this well, at first.

Yesterday we saw a market two way trade several times, and both puts and calls were profitable in new trades, for some traders, several times.

The FEDS finally may have gone off the drug of interest rates, and some bail out. I'm astonished.
Some of the best moves we've seen in 8 hideous years have taken place. We should NOT bail out banks, nor lower interest rates.

Supply side economics, yet again, has been shown to the pure failure.

The market hit bottoms at 10,700, and began a struggle from 10,900 to 11,100, with whipsaw around the FEDS announcement.

All of the situations we've recently experienced in the financial markets could have been avoided. The current situation in Afghanistan, where we have truly lost the war on terror, could have been avoided. Our tax increases, monumental in our debt, could have been avoided.
This, and how we see it, dramatically affects the stock market.

No matter who you elect, remember this: it is not the experience, but the understanding of what must be done, and who surrounds the lead, that will make it work.

Regulation will be required, only because the GREED within the lobbying and Wall Street influence permeates all we do. Do NOT for a a minute believe that "free enterprise will control the market", as there is NO free enterprise. Large multinationals own the markets, and industries, and these companies, in good times and bad, bribe the market. As long as this form of free enterprise takes place, no controls will be in place.
McCain:

"On the campaign trail on Monday, Mr. McCain, the Republican presidential nominee, struck a populist tone. Speaking in Florida, he said that the economy’s underlying fundamentals remained strong but were being threatened “because of the greed by some based in Wall Street and we have got to fix it.”

But his record on the issue, and the views of those he has always cited as his most influential advisers, suggest that he has never departed in any major way from his party’s embrace of deregulation and relying more on market forces than on the government to exert discipline.

While Mr. McCain has cited the need for additional oversight when it comes to specific situations, like the mortgage problems behind the current shocks on Wall Street, he has consistently characterized himself as fundamentally a deregulator and he has no history prior to the presidential campaign of advocating steps to tighten standards on investment firms.

He has often taken his lead on financial issues from two outspoken advocates of free market approaches, former Senator Phil Gramm and Alan Greenspan, the former Federal Reserve chairman. Individuals associated with Merrill Lynch, which sold itself to Bank of America in the market upheaval of the past weekend, have given his presidential campaign nearly $300,000, making them Mr. McCain’s largest contributor, collectively.


Nelson Mandela's name was removed from our Homeland Security terrorist list July 1st, 2008.

> This is a fact that explains our terrorism issues perfectly. 20,000 new names are added to the list each month. Yours might be one of them :)
>
> The U.S. housing market will hit bottom, according to current futures trading, in 2010.

And from trader Bill, a few notes from his emails to me yesterday:


> "Buy's at 11.20, sold partials at 16.00.
>
> Holding for top sell of 19.00; multi-day trade. VIX spike today is nice but expect more capitulation.....
>
> Will buy on retrace of up to 33% to 10926 order for 14.50.
>
> Buy on retrace to 50% for 13.00
>
> Sell order in at 15.50. Sold partials, again.
>
> Will buy again if retrace.
>
> Overall looking for a move to 11,110.
>
> Looks like a trading range between 10900 and 11000 and change....
>
> Not sure yet if I am willing to hold overnight....."

I am trading small lots because of the higher risk of the market. I was going to hold yesterdays puts overnight, but it wasn't worth the risk.....Who the hell knows what the FED would do......

BTW:

It's nice to be in cash......:)

100% for months......loading up on emerging markets mutual funds in the 401k......

No worries.....Actually building a 4,200 sf house right now.....

contractors are falling all over themselves to get work.....some material prices are coming down....

Bank (local) even lent me a large sum of money to build.....

My profits from trading are paying for house upgrades....."

Tuesday, September 16, 2008

Greed is Giving Way to Fear

We issued a midday alert for the October560C which hit $1.00 profit goals in minutes, and second buys within hours. We'll hold this signal through the FEDS announcement, and also list an OTM put for risk traders.

The market is NOT readable. The government yesterday afternoon has asked JP Morgan and others to bail out slimey old AIG, the insurance thiefs, and this will help lead the potential of the market. Trigger turns could occur on what the government now DOES NOT do.

To those of you with me for years I know you knew all this. You knew that the lack of government business regulation in the last 7 years, the true devil may care "let it fly" attitude, even the McCain supported Bush move to privatize social security, have been truly successful at helping a few get rich, and a lot get poorer.

For those of you with intelligence you are not falling for the McCain ads about lowering taxes, when taxes have been raised endlessly with each of these bail outs (Bear Stearns just had faster lobbyists), Freddie and Fannie, and the endless building of debt. This is a simple and very effective "reverse taxing" where future generations are also taxed for our sins.

Yesterday the Lehmann bankruptcy occurred because the FEDS will not bail out, and they won't, because this time they know the books are so cooked with so many brokerages and banks that they have no way to do so....

AIG is next. Washington Mutual right after that. 18% of Citigroup's profits in 2006 came from credit cards. When the bad debt game of credit cards comes fully out we'll find the losses even deeper. In 2007 I'll let you guess what percentage of profit was credit card interest, as this will be the next Wall Street game exposed, with Congress fully behind the games. The fault is not just the Republicans, but all of the "old guard."

Please remember that the very analysts we read daily are the brokerages going under.

Greed is giving way to FEAR, as it should. Republicans and Democrats are responsible here. The lobbyists have controlled our Congress, and our White House. Do not deceive yourself that this type of fiasco cannot be controlled without regulation. Free markets may work well, but our lack of controls and false financials have much left to damage us. Fannie, Freddie, AIG and Lehman paid lobbyists and accountants for many years, and no controls were in place to stop them.

Here's what Paulson said:

http://www.bloomberg.com/apps/news?pid=20601087&sid=afG.eywb_KLU&refer=home

_____

As traders learn to think about trading, much can be learned. Here's an example of the "next step" with a new Advanced Mentoring client

http://www.oexoptions.com/AdvancedMentoring/AM.html


"Hey Floyd...Thanks for the journalling example...that helped a great deal...

Below is some journaling as well as some questions and thoughts for you...Feel free to comment wherever you feel necessary.

As for today...

Christine and I had a long talk about trading the OEX...We discussed how it can turn into another addiction for me..how I could easily be gambling and leveraging too much money...that there is a difference between trading with a system or profitable market edge and gambling...I admitted that there were several times when I gambled...I DO NOT want to do that anymore..

I decided that today I would implement Floydian rules...And that I would leverage smaller amounts of money...Remember...my account went from $32K down to $25K...I must take prudent risk or else I am going to be done soon!

Today I bought (1) 600 call contract for 5.40 after the market bounced off of the big drop this morning. I have to admit that I was proud of myself for only purchasing 1 contract...but I was also a bit nervous b/c I figured that it was "just my luck" that the market would continue to fall and I would be making a second buy...Even so...only having $540 out there made me feel much more at ease in case I did have to make a second purchase...

Originally...I set my profit goal for 7.40 (37%)...initially, when the market moved up and reached a 15-20% profit...I was thinking about taking profit...BUT becaues I only had one contract...I thought it was OK to hold for more...The DOW was trending in a diagonal range and I was going to let her go like that for as long as I could...However...I did say that my top sell was going to be between 40-50%... I used my theoretical pricer to estimate option price at yesterday's high of the day and I put a sell order in for 7.80..I have to admit that I figured that she would blow right through my order and continue onto more upside...but to keep greed at bay I felt that a 45% profit was more than enough..

Guess what...she hit my 7.80 target price and pulled back.What a decision on my part!! I felt great! Why can't they always work out like that? Seriously...I am proud of the fact that I estimated the top today (so far...11:15am)...BUT...that is one thing that is hanging me up...trying to be perfect...hitting tops and bottoms...I can't try to be perfect because it causes me to be anxious and then I make mistakes. However, because of my limited capital...I don't know how to stop thinking that way because I should want to get the best price possible correct? I believe that using smaller contract sizes will help me control this kind of thinking.

Afternoon: I came back from the park with the girls and noticed that the DOW was just about ready to hit the pivot...I was thinking about playing the bounce off the pivot but I did not want to spend 6.40 for a contract when I bought one earlier for 5.40..I was planning on buying again if the DOW touches the low of the day..BUT my one concern...and this is Christine's major beef with me..."Why can't I just take a good trade and be finished for the day?" "Why do I feel it necessary to trade another time, especially after a good winner?" It's like I'm just looking for an opportunity to screw up...Like I can't enjoy success for too long..

I do feel such an urge to trade again before the day ends...I should just hold off...even if a good opportunity presents itself...just to develop discipline.

2:00pm...15 minutes later...I am a little pissed off right now that I had an opportuity to purchase some 600 calls at the pivot for 6.40 and now they are worth 7.40...that is the stuff that bothers me...it was a good play...it was in line with Floydian rules...and I didn't have the guts to get in the trade b/c I can hear my wifes words ringing in my head..."Why do you feel it necessary to place another trade after you already made money that day? Why are you looking for an opportunity to lose?"...

Because of that...I felt jinxed no matter what I did...if I get in I will lose...If I don't get in...I will watch my potential winner...I HATE THIS FEELING!!! It's like I'm a slave to some little voice telling me that no matter what I decide to do..I'm going to be wrong! Anyway...if the DOW comes back down..I may be getting in...Watch me lose now!!

2:50pm...I am seriously pissed off right now...I watched the DOW for the last 2 hours move into a little flag pattern...staying above the pivot...I could have bought several times...once at 6.40...another at 6.80 and once again at 6.90...(Notice the higher lows)...what do I do...I sit there paralyzed....AFRAID TO BE WRONG....AFRAID TO HEAR MY WIFE (and the demons inside) TELL ME THAT I MADE A MISTAKE...Guess what? The option is worth 7.60 as I type and probably going higher!!! This is why I HATE trading....and this is why I feel like I can't get it right...

3pm...she's worth 8.10 right now!!!! CRAP!!!

3:20...Price hs been hanging aroung 8:10/8,20 for twenty minutes now...I have to admit that if I did buy earlier...I would have been out...(even though I believe she will continue to rise shortly)...The bottom line is that I could have made another 1.00-1.50 profit today...at least...and I am not too happy about that...HOWEVER...I was just thinking that there is no reason to allow a missed opportunity to get me upset...the positives behind this event are as follows:

1. I demonstrated some discipline by only placing one trade in a day..even though there were other opportunities
2. I was able to correctly identify other set ups...that is a good thing
3. I followed the rules today
4. I made 45% on my money and did not lose a cent!

Guess what...price is coming back down..I wonder if I should jump in before the 3:30 buying frenzy!!

3:50pm...As I sit back and watch the market play itself out...I can honestly say that NOW I feel pretty good about what I accomplished today...I placed a great trade this morning (thanks to Floyd's recommendation). I was able to buy near the low and sell near the high of the day...and I obtained 45% on my money (even though I only risked $540...45% is 45%...I'm not going to get into the mind game of "What would I have made if bought 5 contracts?"...I can't get into that kind of thinking because that kind of thinking will cause me to over leverage myself...All I say to myself now when I get a thought like that is...SOMEDAY...I will be able to do this with 5-10 contracts...but not right now...and that is OK."

Today was a great day...Overall...the week was a pretty good week...I began poorly (lost $9000 b/c of fear and greed) and finished up the week making up $2000 (some of that came off of lucky trades that I really shouldn't have placed either). But the reason why this was a great week is because I learned many lessons...And today I was able to demonstrate what I learned...I am a little bit more disciplined today than I was yesterday...and much more than I was last week, Thanks FLoyd."

There is more to trading than buying or selling a signal, and the fault of a loss or the win of a gain are only partly from the math and "functional" premise. There are few , if any, real "systems that work" without the control of emotion.

Monday, September 15, 2008

I Recommend All Traders Journal Their Trades/Emotions

FUTURES ARE DOWN 200 POINTS 8 P.M EST ON SUNDAY AS NOONE SEEMS READY TO BAIL LEHMAN BROS OUT.

THEIR BOOKS ARE FALSE, JUST AS FANNIE AND FREDDIE, JUST AS WAMU, AND THE MOOD SUNDAY EVENING IS ENTIRELY TO A HUGE DOWNSIDE RISK.


We had nice testimonials from subscribers for our Friday call trade, profitable same day for good profits.



Oil will be affected by Hurricane Ike, but much less than oil companies will try to make us feel, or that speculators may lead the market up.

Lehmann buy or bail out news will be instrumental to the market, so watch futures carefully.

It will be interesting if Wall Street takes the unravelling of one of the great brokerages with FEAR, or GREED.

Please remember as this occurs that these are the "analysts" we listen to, now in "foreclosure" from their own advise.



A number of traders have asked me about Advanced Mentoring recently, and I thought I would share dialogue I just had with a new AM client, who is learning to "journal".

I recommend to all traders that they journal their trades, before, during and after. Journaling is writing your thoughts, much as a diary, about how you trade and what you did write or wrong. Here's an example I gave the student:

Write down as you trade, as much as you can write. Use a Word document, or a journal that you hand write.
Write down your emotions around the buy, after you buy it, and as you sell it.

Simply write all your thoughts, fluidly.

Ex:
Read alert and think at a 6 bias to call there is a good upside, but I will buy only at best buy or up best buy by 5%.
Entered at 4.50. Very nervous about the news today and market seems to be unsure.
Will study r1 and r2.
2 p.m.-had sell orders in at 5.40, and lowered to 5.20, just sold. Good profits.
3.15 p.m.-shit. Up another 80 points, I could have gotten the 5.90 in the alert. Oh well, good money.
Anxious to buy again, even wrote Floyd to see if I should and he told me to sit on hands. Why do I want to buy all the time?

or

Ex:
6 for 7 this week, all day trades. In other journals this week, I've stuck to the .50 to .80 contract. Lost on the one I held for more, but alert did say tight profits. I held too long, and then sold it out day end, did not hold # of days because the bias count was so high. Glad I sold.
Floyd told me to watch my own behavior as if it not me, what he called the silent witness, or a guy on my shoulder watching me.
This is actually helping. I kind of watch myself from up on my shoulder and can see when I start getting nervous.
I also notice when I am going to be stupid I often start getting hyper and agitated. Should just stop the damn trading when this occurs.

Wednesday, September 10, 2008

Do Not Listen to Rhetoric

I am well aware that our subscribers are confused and frustrated, as we are seeing a market that is NOT analytically penetrable.

Let me explain:

1. When the market vascillates as it has, something is up. We are seeing turns and whipsaws that make any chartist ill, and make little sense.

2. I have not been willing to trade this market the last few days because I truly do not know a directional bias. I am best at providing Dow projections, best at providing regular signals, and I can't read it. What I read is FEAR. A market so confused and frustrated that almost any issue or "false fact" influences the moves of the day.

There is no doubt that there is money to be made in this market, but also a great amount of money to be lost.

We will suggest in this alert potential buys, but advise as we do so that we do not believe this is a market that should be traded, except by highly capitalized risk traders.

As you read the candidates discussing tax increases and cuts, please be smart. The 250 billion dollar Fannie/Freddie bail out already raised your taxes.:) You are already paying higher taxes in inflation and Government debt. Do not listen to rhetoric.

Do NOT be Misled by Hulk Hogan

If you would like to understand the thinking behind the sell off yesterday, it's simple. Euphoria led off, and people woke up.

http://www.bloomberg.com/apps/news?pid=20601087&sid=abjAdI_e_aoo&refer=home

Traders that took inventory to the put thought I was nuts, but made some real money...with buys as low as 3.10 and sells to as high as 11.20. Calls, as expected, were available only for tight profits.

We do NOT recommend opening the market today with a buy. The volatility is too extreme. Take prudent risk.

The above URL link gives you Bloomberg's interpretation of the market yesterday.

Here's mine:

Wrestler "Hulk Hogan" is worth 32 million dollars. This proves that America be be sold on anything and that anyone can get rich in the U.S.A.

Three months ago I predicted: "Fannie and Freddie, through false financials, will fall, and the same administration that allowed the oversights to occur, will bail them out for 250 billion or more, and America will not understand the real repercussions".

Four months ago: "The USD will rise, and America will think we did it. What will do it is the Euro falling from its false highs, and the dollar benefiting. Yet again we will not understand what we have truly done to the USD in the last 8 years:

How am I doing so far?

Do NOT be misled by Hulk Hogan. Our economy is dependent upon our ability to understand the world economy.

"Bomb, bomb, bomb Iran" and far right Christian views (Sarah the hockey mom) ARE NOT Global thinking, but instead, more of the "I am right, therefore others must follow my way" world.

McCain is NOT a maverick or a change agent. He voted 90% with Bushy. Want more of the same?

There is a clear reason our economy is in a shatters. Oil, the USD, and mortgages. It will get worse. If we elect stupidly, it will get far worse. People are responsible for the debts this country has created, and 250 billion in the Freddie/Fannie bail out is enough to wear one out. As if we have this money.

In Broward County Florida (Miami/Ft Lauderdale) there were 761 foreclosures in 2006; there have been 6401 foreclosures in the first nine months of this year. This is a 741% increase; couple this with Fannie and Freddie NOT being managed, and now a 250 billion bailout, and the costs in Iraq....this is why our USD is in trouble, and our economy in shatters.

Who else is responsible?

Consider Floydian Therapy®: http://www.oexoptions.com/pages/FloydianTherapy.html

Tuesday, September 9, 2008

I am Amazed at our Own Stupidity

Do not be fooled by false promises. Our economy depends upon it:


1."McCain has vowed to wipe out earmarks, which are targeted funding for specific projects that lawmakers put into spending bills. As governor, Palin originally supported earmarks for a controversial $398 million Alaska project dubbed the "bridge to nowhere." But she dropped her support after the state's likely share of the cost rose. She hung onto $27 million to build the approach road to the bridge.

Under Palin's leadership, Alaska this year asked for almost $300 per person in requests for pet projects from one of McCain's top adversaries: indicted Sen. Ted Stevens. That's more than any other state received, per person, from Congress for the current budget year. Other states got just $34 worth of local projects per person this year, on average, according to Citizens Against Government Waste, a Washington-based watchdog group. The state government's earmark requests to Congress in her first year in office exceeded $550 million, more than $800 per resident. Palin actually reduced the state government's requests for special projects this year in the wake of President Bush's demand for a cutback in earmarks.

Alaska also has become so accustomed to largess flowing from Congress through Stevens that most of Palin's earmark requests this year - such as studies of Alaskan fisheries, grants to combat drug trafficking, and rural airport upgrades - simply keep ongoing programs going. Among her requests was $150,000 to pay the travel bills of state and fisheries industry representatives on the boards that implement North Pacific fisheries agreements"

All is not as it appears. McCain and Palin say they are change agents, but there is no HISTORY of their EVER wanting any changes to how things run.

2. If you are not worried about the bail out of Freddie and Fannie you should be. The cost will be over 200 billion, and this is done after NO financial reviews have been in place for the past 8 years, and the Govt itself led the subslime lending.

For the many Republicans that believe Obama will raise taxes, get smart. Your taxes were just raised, as there is NO money to fund this, and it will occur with whatever new administration we have, and more deficit. There are many ways taxes are raised.

Of course, the market took this with real euphoria, and hit Dow tops at 11,610. Sometimes I am amazed at our own stupidity.

It is NOT good news, and there is NO funding to pay for it.

However, for the many traders that held call inventory, the day was sweet:

Like I said on Friday, "something is building on a come back". I said that because I was trying to feel the breath of the market. I don't know if I got it but none of the tools told me that. I got saved on the 610 call. Just sold 40 contracts for over 8k at $2.1 a contract. My average cost was 1.55 so when I saw the bid at 2.00 I jumped in and made 20% on my investment. I don't care about anything except what I felt on Friday and had peace until I saw the futures on Sunday. Its some kind of higher intelligence. That world is becoming more familiar on every correct and incorrect interpretation. WOW, Thank you Floyd. Please be well. :) Got to use the tools first then go fly the jet, and don't crash flyboy. TP

"Nice trade, Floyd. I held both the calls and profited in the end 24%. You were just a few days early. As you teach, it is amazing to see what triggers the market at times. Imagine a bail out as being good! " JAE

Monday, September 8, 2008

False Facts Have Led Our Country For Many Years

Market conditions last Friday left us with a 5 count to the put, meaning a market that still has the potential of downside, or a test to the 11, 050 again, unless something with the market creates FEAR that takes a normal, but surprise correction, to 10,800.

When our Dow projections, which are based on historical patterns, are broken (2 of 10 times this year, on average) the market has "reacted" once to almost bear conditions, and whipsawed back.

It is the breaking of the pattern that should be noted, however, as our work is based on number counting, in effect, and patterns that are broken MAY result in a shifting of emotion in the market.

False facts have led our country for many years, and the price is being paid. Unemployment came in at 6.1% Friday, settling the market at just above 11,050. The real fact, if you take out how unemployment statistics have been manipulated by our Govt, is that the unemployment in the country is now 15.1%. Whether these are people that "want to work" or "can" work is irrelevant; they do not work, and are thusly unemployed.

It is a fact, for example, that McCain voted Bushian ways 90% of the time. This is used now by Obama as "do you want more of the same?", and it's accurate. McCain supported the Republican and Bushian doctrine that we now have the results of. 42% of Americans right appear to believe McCain will lead well, and thusly that he will either change his ways to improve, or that what has occurred is okay.

It is difficult to even argue this kind of thinking. This is an example, in stock trading, of "misinformation" creating fact.

A false fact would be McCain's "Obama will raise taxes to the American people". This is true, but it would not affect the lower or middle class Americans, only taking away many of the tax breaks that have taken the labor out of our country, and gained wealth on tax breaks. Warren Buffet, the world's richest man, voting for Obama, states it well: "I should pay more taxes than someone earning 80K a year, and proportionately I do not. Something is inherently wrong". It is the disparity that should be eliminated. Some should not have more advantage than others. This is basic sandbox thinking.

Sarah Palin may be sweet, and "Mrs. Smith goes to Washington". Should she be President Palin, if McCain dies, and go to Russia? Sorry, the lack of the education and the formality of global thinking cannot be done well by a woman (or man) that has never traveled overseas extensively. The world is no longer the U.S., and perhaps we are not even the superpower we were, or soon will not be.

I wonder at times if Americans should not be allowed to vote until they can understand that the world does exist outside of our world? And that not all people have the same beliefs, nor should they.


The FEDS will spend 25 billion today to bail out Fannie and Freddie.
This is a TAX INCREASE. Do not be tricked. Someone will pay for this, and it cannot be the govt that approved it, as they have no money.
How the market takes this will be of interest. It's frighteningly bad news, and what I predicted a few weeks ago.
No one in our country in a government position appears to have any accountability, or even act as good analysts for why this occurred.
Vote smartly.

Friday, September 5, 2008

Fish Tank Psychology

"If you show an American an image of a fish tank, the American will usually describe the biggest fish in the tank, and what it is doing. If you ask a Chinese person to describe a fish tank, the Chinese will usually describe the context in which the fish swim. Americans usually see individuals; Chinese and other Americans see contexts. What happens if collectivist societies, especially those in Asia, rise economically and come to rival the West? A new sort of global "conversation" will develop. The opening ceremony in Beijing was a statement in that conversation. The most striking features were the images of thousands of Chinese moving as one-drumming as one, dancing as one, sprinting on precise formations without ever stumbling or colliding. It was a high tech vision of a harmonious society, performed in the context of China's miraculous group."

What we know is NOT all that is, and NOT all that may be.

____

I have been dead wrong on the market this week. After Tuesday's run up to celebrate "no hurricane" each downturn has been sharper and on higher volume that my projections. Of interest, our projections were strikingly accurate until this last turn, and it is the stronger turns that last that I have missed in January, June and now. These are not chartable downturns, but have typically gone to support lines.

6 times historically, once the market hits a 100 point upside, we have seen 586 point average agains, and I had seen a gain off the most recent bottoms. We do not know when the blood letting will stop.

In Washington, they are arguing whether we have inflation or not.

We will stop loss the Sept610Call today (we suggest stop loss for all traders) our loser of the week. A first buy should have been made for any new traders to the Oct585C.

Puts may have more downturn, and we've listed new Dow projections. Hurricane Ike is not a reason to hold puts or calls over the weekend in new trades. We would prefer to watch the reaction to McCain's babbles last night (Sara the soccer Mom for President), and to see where the market trends before any recommendation.

Thursday, September 4, 2008

Hurricanes and Fear of Oil

We believe the market will now go up. Read our Dow projections very carefully today as we have hit each step of our last 7 day projections, and an upside would now typically occur, first up 300 points, then again another 200 points plus.
We won't know we have any upside bull move, however, until the market can close up 100 plus points in a day.

Hurricanes and fear of oil can dampen any play, but the high volume Tuesday showed a market that many believe was manipulated by traders to sell off oil puts and calls, and yesterday's struggle may have finished the downside.

At least, if history will repeat again, it has.

Calls were profitable yesterday for new traders that bought our OTM issue and played it tight. Otherwise, I've missed the downward move this week, and was early to the call. The market will potentially still surprise us.



___________

A recent Gallup poll showed that 42% of Americans would allow Sara Palin to be our President if McCain, aged 72, were to die.

Mrs. Palin has NEVER been in any part of Europe, China, Russia, South America. She may have been on a Caribbean cruise boat, but sorry, even considering that this lady could represent us to the world, and that votes have not dropped off, astounds old Floyd.

Wednesday, September 3, 2008

Tuesday Was Interesting...

Tuesday was very interesting. Many traders bet on a hurricane, and the put losses were astronomic on the first day back to the market, and floor trader pros were surely in evidence, jumping the market up 200 plus points in early trading, causing massive put losses as traders covered, and promptly bringing the market right back down to the 590 moving average.

We took first entry to the Sept610C at OEX 595, and many traders took two entries as the market plunged.

Chartwise we had seen a downturn FIRST to the 11,400 area, before a jump to near 12,000. The "lack of hurricane" and lower oil prices were the trigger and catalyst for the type of upsurge this morning that is impossible to catch.

Most important, the trader must recognize that conditions are truly erratic. We had a 200 point decline in Friday, and 200 point run up on Tuesday, and 230 point drop again Tuesday. The Bell Curve analysis of "6 to a put" or "7 to a call" appears to have no historical perspective in massive runs like this. Some traders use VIX as an additional "pressure tool", and others are trade range playing on support lines, but profits will be harder in a market that has no bearing.

Not everyone can learn to trade successfully. I am asked this question all of the time, and always answer honestly. In Advanced Mentoring I use Floydian therapy :) to help the client understand often why they choose to trade to fail.

Working strategies can be taught, but a great deal cannot be. Some of what cannot be taught, but must be self learned, is to ignore market interpretations, and opinions. Far too often new traders interpret sentiment and believe "what should be", and take astronomical losses holding too long, or buying big after winning large a few times, or both.

Tuesday, September 2, 2008

Inflation is NOT at Bay

Good commentary from Mike Gibbons:

"Stocks fell on Friday giving back Thursday's gains and closing the week with only the Russell 2000 showing a modest gain. Volumes were low throughout the week as this was the last week of the summer before the Labor Day weekend. The markets received a fillip on Thursday with the release of surprisingly strong GDP numbers but reality returned on Friday with the Commerce Department reporting core inflation had risen to 2.4% and a fall in consumer spending in real terms. With consumers accounting for 70% of the economy and consumption now falling after the stimulus checks were spent , the economy faces difficult times and the markets too.

The NASDAQ could not sustain a rise above the 200 day moving average level a week ago and another attempt to vault that level failed this week. In contrast, the Russell 2000 tested support at the 200 dma level and bounced back. As we have been reporting for several weeks now, the small caps are providing the best breakouts and the best returns.



"A practical example in a fictitious country.

In 2007, Islandia produced 500 coconuts, which residents sold to themselves for $1 each, and imported 1 barrel of oil, which cost $100... Nominal GDP in Islandia for 2007 was $500. If you wanted to describe that in real terms, you'd call it 500 coconuts. You don't count the oil in either nominal or real GDP because Islandia didn't produce any oil...
Here are the numbers for 2008. We grew 510 coconuts, sold them for $1.01 each, and still imported 1 barrel of oil, paying $125 for it. So nominal GDP was $515.10 (a 3% increase) and real GDP was 510 coconuts (a 2% increase). The change in the implicit GDP deflator would be the change in the ratio of nominal GDP to real GDP, namely, +1%...
But wait a minute, Islandia's pundits decry. How can your crummy accounting claim that inflation was only 1%? Last year we bought 500 coconuts and 1 barrel of oil for $600, but this year if we tried to buy the same thing it would cost us $630. The inflation rate, they tell you, is obviously 5%, not 1%."


And, from Floyd:
1. Inflation is NOT at bay.
2. The government facts we are getting do not clearly identify real inflation rates, or unemployment claims. We are deceiving ourselves when we believe this.
3. Gold and Silver (GLD, SLV, and SSRI) remain strong longer term core investments we recommend to all subscribers. Conservative subscribers should hold up to 15% of their total investments in core metals, as we have devalued our own dollar beyond recognition, and if McCain is elected, he'll continue the Bush tradition of supply side economics, in which the fewer get rich, and the many get poorer, and the country loses superpower status. If McCain dies and the Alaska soccer mom becomes President, a person that has travelled only out of the country ONCE (to Kuwait last year) we will have successfully destroyed much of our potential. The answer is not drilling in Alaska, sigh, but finding alternatives that do not create a supply and demand crisis.

And, a journal from an Advanced Mentoring client:

Hey Floyd...

I just wanted to journal a bit and share my thoughts with you pertaining to today.

My day began in a rush....I was running late for an appointment ...and feeling guilty because people were waiting on me. I also did not want to go where I was going this morning and that was causing me to be angry...I would have preferred to stay home on the computer and watch the market because I had a feeling that today was going to be a good trading day....an opportunity to "earn money" from the market.

I had my Blackberry with me and my location was not providing me with the best of service (more frustration and anger). When I left the house in the morning...the futures were down about 15pts....not much at all. I had no communication with the outside world for the next 90 minutes and when the market opened up...My Blackberry was working and I noticed that the DOW was at -60pts. Here I am trying to meet with contractors regarding house renovations and I cannot stay focused b/c all I am "worried" about is trying to read the tape. From what I gather...during the first 5-10 minutes of the opening...the DOW moved from -60pts. to -20pts....Now I knew the signal for the day was a little more upside...maybe a move to 11,850...look for some quick profits and then get ready for some downside.

During this short move up (-60pts.to -20pts.)...I grew more and more frustrated because I felt as though this was the perfect opportunity to purchase a call (below prior day close) and get ready for a quick profit. BUT...my Blackberry was not working well and the skeptic kept telling me that an opening of 60pts. to the downside was not to be taken lightly...that maybe I should wait this out a bit. Meanwhile...I'm trying to have a conversation with builders and contractors regarding ceiling joists and bathroom fixtures. At one point I was able to read some headlines from Bloomberg stating:" US stocks retreat on income, spending data, and poor Dell earnings....hurricane Gustav on the horizon"...With all of this going on I was obviously in no position to trade...so what do I do?

My Blackberry connects to my broker and I buy (2) CALLS for 4.30...and about 1/2 hour later...I'm selling them for 3.80...LIVID at myself for being so stupid!!

First of all...Why did I feel that I "had to" trade this morning?" Why couldn't I be at peace with taking the day off?

Secondly, why couldn't I recognize the brief pullback this morning from the initial drop instead of only seeing upside? Was it because my mind was fixated on what was "supposed to happen?" All I kept saying to myself was "the market is supposed to move to the upside about 100pts...buys some calls and look for some quick profits and then get ready to buy some puts..."

It was like all I could "see" was upside movement...considering downside was not even an option in my mind when in reality...all the signals were pointing in to the downside.

Anyway...my one saving grace was that I was able to see a play that went bad and I was at least able to get our with only a $100 loss. I went back to my meeting and errands...occasionally checking the market from my mobile device and radio.

I had to do some traveling later on in the day and I was able to get better service from my Blackberry. I noticed that we hit a low in the later morning of about 11,540..one of our key support areas. At about 1:30pm...I noticed that the DOW moved back to about 11,600 and was hanging around there for a while (another key support/resistance line...magic number zero's ).

In my mind I was picturing a chart and I said to myself..."I betcha that this is just a brief mid-day pullback before some more downside again...this would be a good time to scalp some puts."

I bought (5) puts for 8.80...about 75 minutes later...I sold them for 9.80...made a nice $500 from my truck...erased my $100 loss earlier and gave myself a $400 profit for the day. Can you believe it? About 6 months ago I had no idea what an option contract even was...but because of your teaching....I was able to shake off a stupid mental mistake that I made in the morning..come back with confidence and poise...visualize what the market was doing (OEX...50% FIBO retracement) ...and use a hand held mobile device to make $400 from my truck while I'm running errands for the family...are you kidding me? Only in America are we blessed with this kind of opportunity.

But here is the best part...as the market was dropping...I needed to decide when to take a profit...and I thought of you...I said to myself..."though the market dropped to 11,540 earlier and will probably retest this low late this afternoon....and though this option hit a high of 10.20 already...you may want to consider placing a sell order in at 9.80 just to be safe...be prepared to leave some money on the table "just in case" she does not go all the way to test the low...you don't need to try to squeeze every last dime out of this trade...a 1.00 profit is a great way to end the day." So that is what I did...I put in a sell order for 9.80 and was thrilled that my position was filled. Who cares that the option made it to 10.80? So what I could have made another dollar profit? The victory of the day was the mental comeback...the ability to "see" what was going on and the courage to take a shot.

I just finished my first two weeks of live trading...after following your recommendation of 90 days of "paper trading" and study...I am happy to say that I am up $2000...and I know much more about myself and the market.

Thanks Floyd...I could not have done it without you...Have a great Labor day weekend.

I'll be catching up on my Advanced Mentoring assignments.