We Cut Our Winners

"We cut our winners short and let our losses run." Think of this as you trade. I have many theories being thrown at me on a market that hits new highs, and as we watched the struggle yesterday between bull and bear, here's jus a few:

-Floyd's Chinese conspiracy theory...buy us up, short us, and be ready for the fall. Insure your U.S. Treasury debt :)

-You're Goldman and gold, and have even more new product offerings, and there's a reason everyone there makes $900,000 a year. I don't trust how much control you have over the market.

-Or it could be Dow Theorists: "July 24 (Bloomberg) -- U.S. stocks may climb further after rallying to an eight-month high, according to followers of the century-old Dow Theory.

As the Dow Jones Industrial Average climbed to the highest level since Nov. 5 yesterday, the Dow Jones Transportation Average, a measure for airlines, shipping companies and railroads, broke through a May peak as it surged to the best level in six months. Dow Theory says that when the measures of industrial and transportation companies both post new highs, equities are likely to gain.

'I consider the primary trend of the market as having turned bullish under the Dow Theory,' said Nick Batsford, a technical analyst at Hobart Capital Markets Ltd. in London.

Dow Theory is named for the developer of Dow Jones & Co.’s averages, Charles H. Dow, who died in 1902. Both gauges reaching new highs is considered a sign of strength in the U.S. economy, under the assumption that when companies are expanding, they ship more goods.

The Dow industrials gained 2.1 percent to 9,069.29 yesterday while the transportation index, which includes companies such as FedEx Corp. and Burlington Northern Santa Fe Corp., added 3.3 percent to 3,506.12."

We've had 13 successful call trades and 2 put losses, a good win ratio in the last 10 days. We continue to hold a put as a hedge, but make note that we're seeing puts not lose as much value when the market moves up.

Yesterday we were able to buy our recommended call at a 5.25 average, but sell only to break even or tight profits, with a market that just didn't move at all. We're now situated to put and call. Both could return up to 45% if moves are dramatic.

The rise of the emerging markets concerns me also, with investors simply pouring 35.5 billion in the first half of 2009. This is a global world, with a U.S. nation caught up in Sarah Palin, the idiocy of the politics around what could be a simple healthcare solution, and proof that the "same old politics" rolls on, with just reading about the government officials on corruption and selling body parts.

We are a CSI: Criminal Intent franchise at times. Think of this sentence twice, and think about in your own life.