A few testimonials first:
-I'm still holding puts from yesterday, but I was able to buy 10 contracts of the 500 call at 4.90 and sell at 5.50 - 20 minutes later. A quick 600 dollars. The market seems to be hesitating, so maybe we'll still be able to cash out those puts.-MR
-Nice trades on the 500 call twice today, Floyd, on .50 moves. The market just flat lined most of the day-GCC
By 2.30 p.m. it appeared the market had almost fallen asleep, and by 3 p.m. I calculated the Dow had moved from the theoretical high of 9874, to as low as 9700, yet all in short tight whipsaw and hesitant moves. The traders that wrote above were able to day trade the market, watching the tight moves. Trading was simply hard to do. The moves were too tight, and there was not enough volatility.
We're leaving both signals open.
The first trading day of October the NASDAQ has been up a number of years, and can trigger market movement. Heres' a comment from our www.bluechipoptions.com service, appropriate to index trading:
"Tomorrow the ISM manufacturing index data is announced, gauging the strength the manufacturing sector. This should be a key report as it studies: 1. Production levels, 2. New Orders Placed
3. Inventory levels 4. Supplier deliveries and 5. Economic environment.
This report reflects sentiment of the health of the market: inflation and labor conditions, and historically a "trigger report." We should note that the ISM index is showing the first signs of expansion in 19 months, up 52.9 in August vs. 48.9 in July, and strong gains in manufacturing sales.
But what stands out is that manufacturers aren't stocking up, and are using "just in time" thinking, keeping pared down inventories. This is part of why unemployment continues high, indicating that current production needs are developing to a pared down supply chain, and that more jobs are being done by those that are "left" employed."
As one studies their economic calendars for the week note:
*The "real" Gross Domestic Product final 2nd quarter (annualized) are being released this week. During Emperor Bush's terms we would always find major "corrections" in GDP, correcting optimism with a realistic number, but always when the "real" annualized reports came out, which are not as well followed by the market. Under Obama, of interest, we are noting real GDP #'s typically do not show much correction to prior data. Only if they do this week will we see a market that responds.
*The Real Gross National Product, or GNP, "reflects the goods and services produced by the labor and property supplied by U.S. residents, and includes net income from the rest of the world, which the GDP does not track.
This report correlates well with the ISM report that shows production and income have ramped up. Again, these are all good signs of "end of recession," and we should begin analyzing if a higher unemployment rate may now become a norm in our society.
And....FDIC Is Broke, Taxpayers At Risk, Says FDIC Chairman
So, with what the market did yesterday, here's a chartist summary:
1. On indices slower MACD is crossing faster MACD, a sign of sell off
2. Every bullish % indicator is struggling with crossing under its 20 day exponential moving average. This includes, for example, $BPNYA and #BPCOMP, the NYSE, and the Nasdaq concurrently.
3. Oil continues to show signs of breaking down.
And here's what our emotions around numbers are saying:
1. The market has been doing so well, it's likely it will cross 10,000.
2. We want the market to cross 10,000. We want to think we are all doing better.
3. Lots of indicators show strong growth, and "they" tell us we are coming out of a recession.
Wednesday, September 30, 2009
Tuesday, September 29, 2009
Futures Fluctuated Widely
Futures fluctuated widely before opening yesterday, and the market moved from a 9 to the put bias count UP 135 points in the first hour of trading, bringing the Dow to theoretical 9852 in 60 minutes of trading.
Louisiana Governor Bobby Jindal was caught using the State Helicopter 14 times to attend church.
This is the issue, but we'll come back to it.
Despite a count of 9 to the put, the market massively rebounded Monday, confounding us all, with upside continuing to highs of 9864 before 2.30 p.m, holding the morning run up. Our Dow projections remain intact, just inversed.
We saw an historical key reversal day, and very hesitant futures, of a day not "bound for glory." We did a morning calculation on the S/R lines that we twittered out to all that showed the new R1 at 9823.64 which the market struggled to reach most of the trading day.
There is typically heavy selling the last day of the third quarter, and the Dow has been Down 8 of the last 11 years. Institutional Portfolio window dressing ends at this time, and many sales are made. It's why we saw yesterday and today and "key reversal days," even before we've hit the 10,000 struggle. Any consolidations, or renewals at upside, now have to have more justification and reasoning.
Some question what is really happening on Wall Street: http://www.ft.com/cms/s/0/c2f7e3d4-a9e9-11de-a3ce-00144feabdc0.html
Many of our traders ask about our "count," which are calculations we use on the High/Low/Open/Close of high volume options, and we teach how to actually calculate in our Level 3 and Advanced Mentoring service. It is based on what I call *The Floydian Bell Curve Theory:
The basic bell curve will show a top when a movement is three standard movements above the norm. Typically then stocks (or any commodity) will correct to the middle of the bell curve.
It is the watching of these standard movements, the support and resistance lines, around the bias that works with our simple "test" of this using OTM options of high volume and introducing H/O/L/C.
You can study this work completely in Level 3 service. Our count analysis and S/R calculations can also work with any stock or ETF, which we teach at www.bluechipoptions.com
A simple method of "card counting", with a bit more logic behind it.
And Democrat or Republican, just find a scandal. It will be easy. There are so many, and it is these 540 that lead us :( Many things are not being fixed. Just remember this as we blow up the bubble:)
Whew.
Louisiana Governor Bobby Jindal was caught using the State Helicopter 14 times to attend church.
This is the issue, but we'll come back to it.
Despite a count of 9 to the put, the market massively rebounded Monday, confounding us all, with upside continuing to highs of 9864 before 2.30 p.m, holding the morning run up. Our Dow projections remain intact, just inversed.
We saw an historical key reversal day, and very hesitant futures, of a day not "bound for glory." We did a morning calculation on the S/R lines that we twittered out to all that showed the new R1 at 9823.64 which the market struggled to reach most of the trading day.
There is typically heavy selling the last day of the third quarter, and the Dow has been Down 8 of the last 11 years. Institutional Portfolio window dressing ends at this time, and many sales are made. It's why we saw yesterday and today and "key reversal days," even before we've hit the 10,000 struggle. Any consolidations, or renewals at upside, now have to have more justification and reasoning.
Some question what is really happening on Wall Street: http://www.ft.com/cms/s/0/c2f7e3d4-a9e9-11de-a3ce-00144feabdc0.html
Many of our traders ask about our "count," which are calculations we use on the High/Low/Open/Close of high volume options, and we teach how to actually calculate in our Level 3 and Advanced Mentoring service. It is based on what I call *The Floydian Bell Curve Theory:
The basic bell curve will show a top when a movement is three standard movements above the norm. Typically then stocks (or any commodity) will correct to the middle of the bell curve.
It is the watching of these standard movements, the support and resistance lines, around the bias that works with our simple "test" of this using OTM options of high volume and introducing H/O/L/C.
You can study this work completely in Level 3 service. Our count analysis and S/R calculations can also work with any stock or ETF, which we teach at www.bluechipoptions.com
A simple method of "card counting", with a bit more logic behind it.
And Democrat or Republican, just find a scandal. It will be easy. There are so many, and it is these 540 that lead us :( Many things are not being fixed. Just remember this as we blow up the bubble:)
Whew.
Monday, September 28, 2009
The Market is at a Turning Point
Today is Yom Kippur. It is also a key date for potential downturn, or when reversals normally occur.
Let's start with where we are "fucked." This video is making the rounds as "propaganda" the socialists are trying to put in our schools. Read the lyrics. Try to understand what the message really was, and how "good and open" to all faith, without mention of war or opinion. http://www.youtube.com/watch?v=5zrsl8o4ZPo&feature=youtube_gdata
This helps comment well on the the "state of our nation." Recent blogs you can find at http://www.bluechipoptions.com/ should help our OEX traders to see how I feel the "sad mood" of a nation divided will affect our overall return to a healthy nation.
Stocks fell some of last week for several key reasons:
1. The FEDS talked about inflation. It's an evil word to America.
2. The market was vastly oversold, and extended, and we hit new highs.
3. The USD finally bounced up, homebuilders began to weigh on the market, and even the financial sector overall leader, XLY, began to show signs of holding at resistance lines.
If September has historically been a bad month for stocks, October is often the harbinger of the "best six months" beginning, and it's likely we think for the Dow to hit its top Fibonnaci retracement at 10,700.
Our Dow projections have been in a range of 700 points for over 3 weeks, showing the strength of the market building, hesitating, and struggling at 10,000. As we'll point out in our Blue Chip Options service today also:
The USD gained short term strength late last week, while homebuilders (XHB) falling for five days, and beginning to show signs of resistance breaking down. It's showing in KB Homes (KBH) and Pulte Homes (PHM).
We suggest you pull charts on all three of these sectors and begin tracking, just as we should be tracking the financial sector, the winner of the year, and note the relative performance of XLY is showing signs of stalling.
I am most interested in XLY which I see more as what represents the most economically sensitive area, how we are spending. I remain worried about inflation, and the lack of normal correlation between a rising stock market and lowering of unemployment. This is not occurring this time through, and remains a flag. There are simply not enough new jobs, businesses are cutting back to make money with rising costs of doing business"
With all this said, the market last week and especially this week is at a turning point.
Let's start with where we are "fucked." This video is making the rounds as "propaganda" the socialists are trying to put in our schools. Read the lyrics. Try to understand what the message really was, and how "good and open" to all faith, without mention of war or opinion. http://www.youtube.com/watch?v=5zrsl8o4ZPo&feature=youtube_gdata
This helps comment well on the the "state of our nation." Recent blogs you can find at http://www.bluechipoptions.com/ should help our OEX traders to see how I feel the "sad mood" of a nation divided will affect our overall return to a healthy nation.
Stocks fell some of last week for several key reasons:
1. The FEDS talked about inflation. It's an evil word to America.
2. The market was vastly oversold, and extended, and we hit new highs.
3. The USD finally bounced up, homebuilders began to weigh on the market, and even the financial sector overall leader, XLY, began to show signs of holding at resistance lines.
If September has historically been a bad month for stocks, October is often the harbinger of the "best six months" beginning, and it's likely we think for the Dow to hit its top Fibonnaci retracement at 10,700.
Our Dow projections have been in a range of 700 points for over 3 weeks, showing the strength of the market building, hesitating, and struggling at 10,000. As we'll point out in our Blue Chip Options service today also:
The USD gained short term strength late last week, while homebuilders (XHB) falling for five days, and beginning to show signs of resistance breaking down. It's showing in KB Homes (KBH) and Pulte Homes (PHM).
We suggest you pull charts on all three of these sectors and begin tracking, just as we should be tracking the financial sector, the winner of the year, and note the relative performance of XLY is showing signs of stalling.
I am most interested in XLY which I see more as what represents the most economically sensitive area, how we are spending. I remain worried about inflation, and the lack of normal correlation between a rising stock market and lowering of unemployment. This is not occurring this time through, and remains a flag. There are simply not enough new jobs, businesses are cutting back to make money with rising costs of doing business"
With all this said, the market last week and especially this week is at a turning point.
Friday, September 25, 2009
What's happening...
This is what appears to be happening:
· The Republicans have once again used the tried and true Karl Rove technique of providing false facts, and creating fear. And half the country believes it.
· The Republicans, who had no regard for deficits for the past 8 years, and historically actually create more deficits than Democrats, are now fearful the debt we have created, to undo the financial disaster that has filled every cranny of our society, and use this debt to their advantage, preaching our inability to pay it back, and the “socialism” of it.
· The lobbyists control the 540 in Washington that control our lives, and these idiot Senators and House members appear to be literally fucking around, playing games for their “constituents” and the whole concept of what free democratic government is suddenly has nothing to do with how our nation lives, and our people are easily influenced by advertising and media.
· So then we blame the media, which is instant and never completely factual, and filled with right and left wing idiots that spew more nonsense.
· Remember, most Americans only read to the 6th grade level. More than 37% of all Americans have not read a book in the last year. We are unschooled, and influenced by the influencers.
· My week of vacation allowed reflection on our barrage of input, and as usual, refreshed the mind from the stress or work worry, or fatigue, or whatever, that we create.
· But again this comes back to the way it is set up now most people are fucked, and it can get better. The country was seeing with vision just a few months ago, and beginning to think of all we needed to do (The Obama Agenda), all things that should have been done, and all that were imminent.
· Our financial crisis is far from over, but it has been slowed. The stock market has rebounded well, but suspect is that the most traded stock this summer has been AIG, all traded by speculators on wild swings, on a stock on a company that no one quite knows the value of. And how much do they owe us?
· So, as we have chances to create real change, and perhaps care for more of our own people with healthcare, to stop the robber barons by forcing competition. It’s a sad lack of regulations that have created industries like the financial and healthcare sectors that appear to be collusive and usury is accepted practice…but a change came over this country this summer, brought on by fear. Fear induced by false statements, and then again a speculative market that has showed tremendous gains, so much so that one wonders what bubbles we’re creating. The Treasury Note and Bond certainly are bubbles, as we again fuel our debt by buying from China, and having them buy our debt. Same with Japan. The simple statement “buy made in America” is both hard to do, and not even the right thing to think.
· All of this tells me we are “fucked.” We don’t know what is happening before our eyes, and we are letting it happen. Something in thusly, in my “way of thinking,” in the air.
· However I feel about the world, or how Americans eat at McDonalds by choice, there are influences to the world on how the G20 are thinking, and how the 540(House/Senate) are thinking, and the propaganda in our country is as ripe as it’s ever been. Something is up, and it will affect the market.
· That’s the beginning of my thinking of how to explain this to you, but get ready for October, where upward pull could surprise us.
· The Republicans have once again used the tried and true Karl Rove technique of providing false facts, and creating fear. And half the country believes it.
· The Republicans, who had no regard for deficits for the past 8 years, and historically actually create more deficits than Democrats, are now fearful the debt we have created, to undo the financial disaster that has filled every cranny of our society, and use this debt to their advantage, preaching our inability to pay it back, and the “socialism” of it.
· The lobbyists control the 540 in Washington that control our lives, and these idiot Senators and House members appear to be literally fucking around, playing games for their “constituents” and the whole concept of what free democratic government is suddenly has nothing to do with how our nation lives, and our people are easily influenced by advertising and media.
· So then we blame the media, which is instant and never completely factual, and filled with right and left wing idiots that spew more nonsense.
· Remember, most Americans only read to the 6th grade level. More than 37% of all Americans have not read a book in the last year. We are unschooled, and influenced by the influencers.
· My week of vacation allowed reflection on our barrage of input, and as usual, refreshed the mind from the stress or work worry, or fatigue, or whatever, that we create.
· But again this comes back to the way it is set up now most people are fucked, and it can get better. The country was seeing with vision just a few months ago, and beginning to think of all we needed to do (The Obama Agenda), all things that should have been done, and all that were imminent.
· Our financial crisis is far from over, but it has been slowed. The stock market has rebounded well, but suspect is that the most traded stock this summer has been AIG, all traded by speculators on wild swings, on a stock on a company that no one quite knows the value of. And how much do they owe us?
· So, as we have chances to create real change, and perhaps care for more of our own people with healthcare, to stop the robber barons by forcing competition. It’s a sad lack of regulations that have created industries like the financial and healthcare sectors that appear to be collusive and usury is accepted practice…but a change came over this country this summer, brought on by fear. Fear induced by false statements, and then again a speculative market that has showed tremendous gains, so much so that one wonders what bubbles we’re creating. The Treasury Note and Bond certainly are bubbles, as we again fuel our debt by buying from China, and having them buy our debt. Same with Japan. The simple statement “buy made in America” is both hard to do, and not even the right thing to think.
· All of this tells me we are “fucked.” We don’t know what is happening before our eyes, and we are letting it happen. Something in thusly, in my “way of thinking,” in the air.
· However I feel about the world, or how Americans eat at McDonalds by choice, there are influences to the world on how the G20 are thinking, and how the 540(House/Senate) are thinking, and the propaganda in our country is as ripe as it’s ever been. Something is up, and it will affect the market.
· That’s the beginning of my thinking of how to explain this to you, but get ready for October, where upward pull could surprise us.
Thursday, September 24, 2009
When the Economy Grows...
Yesterday we saw classic flat lining for most of the day as the market hesitated before the magic 000's, a number Fibonnaci taught us always causes resistance. The market top was at 9958 before 3:10 p.m., and then began dropping.
There is such resilience within this market that as the market tops, we suggest, and now alter our Dow projections, that sell off/consolidation could be lighter, to a higher low, before more upside. The market "appears" poised for more and more upside, and charts even make October look good.
For traders that took new positions to our puts, the Oct480P was profitable up to 1.40 a contract, and the Oct500P profitable up to 3.00 a contract. For traders that already had a first position, a second and larger buy should have been made at 9950 as we hit it yesterday. And, we hit the jackpot on the Oct500 Call again, buying below prior day close (5.80) and selling to as high as 8.20.
Near the end of the day the new buyer to puts, if holding longer term, began to handsomely profit as the market dropped 54 points.
The put traders made their money as the market fell apart near the end of day, the second time the PPT appears to have been on vacation!
We'll hold the puts, and issue a higher risk call day trade for those that can see a market tipping past 10,000.
Subscriber CA wrote:
You asked us to look for 9950 but I just bought at 3.80 and sold at 6.10 for one contract. I was wondering if your brain is an unique and predictable. I was puzzled myself why market was rejected on Fed rate and it came down. I thought market would be happy with the red rate decision. Please explain why the market became negative.
You are an excellent teacher I have had ever seen. I am still learning your unique teaching everyday. Superb teacher. I admire it.
Thanks,
Floyd's answer: The magic 000's are part of it, and the FEDS mentioned the word inflation. We are simply at market tops that have been driven up very quickly.
On Monday I wrote Blue Chip Option, our sister service, subscribers and posted a blog that I think should be a key read in understanding how the economy is really doing.
So, direct from www.bluechipoptions.com:
Floydian Theory on Okun's Law-THIS IS AN IMPORTANT STOCK READ
The economist Arthur Okun first formulated the theory that says "when the economy grows, it produces jobs at a predictable rate, and if it shrinks, it sheds them at a similar regular pace.
Joshua Ramo has an excellent article in Time Magazine. Cut and paste to your browser and really study, as Mr. Ramo explains the unusual predicament we are in, in that the economy is growing, but unemployment is not shrinking.
http://www.time.com/time/business/article/0,8599,1921439,00.html
As you complete the article, and think out Okun's Rule of Thumb, we are perhaps truly in a shift within our nation, with more unemployed than ever before, and for a much longer time.
As a business consultant for many years I could visually watch the layers of management at firms that were unnecessary, and that many companies were simply not productive with their employees.
We all know this. With the Cash for Clunkers it was 4 for 5 American cars clunked in, and 4 for 5 new cars being bought Japanese.
Walmart is China, and doing well, so it appears we are not willing to stuff. Trade tariff discussions are already starting.
I believe Obama's stimulus package has held us steady so far, and that the market is now naturally producing its Fib retracement , some on good news, some on hope, but most of our rise has been
as pre-indicater of what the economy should become. The market precedes the general economy. The issue of healthcare will be resolved, in a way I think that will define really what kind of nation we are, one led by anger and fear tactics, or one that can be bi-partisan and represent all the people, without the lobbyists that lead our world.
Wall Street has been warned. Regulations are not yet in place, and many schemes are already being hatched. We have to watch for this, as many predict there are more "hidden numbers" that will become clear as the high unemployment hits the GDP, and hits our taxes, as there will then again be more subsidies. Stimulus some believe may need a second phase.
My point in Okun's "Law" is that his extraordinary "obvious" theorem "should be" right, but some tides are turning, or we are modifying the theory.
There is such resilience within this market that as the market tops, we suggest, and now alter our Dow projections, that sell off/consolidation could be lighter, to a higher low, before more upside. The market "appears" poised for more and more upside, and charts even make October look good.
For traders that took new positions to our puts, the Oct480P was profitable up to 1.40 a contract, and the Oct500P profitable up to 3.00 a contract. For traders that already had a first position, a second and larger buy should have been made at 9950 as we hit it yesterday. And, we hit the jackpot on the Oct500 Call again, buying below prior day close (5.80) and selling to as high as 8.20.
Near the end of the day the new buyer to puts, if holding longer term, began to handsomely profit as the market dropped 54 points.
The put traders made their money as the market fell apart near the end of day, the second time the PPT appears to have been on vacation!
We'll hold the puts, and issue a higher risk call day trade for those that can see a market tipping past 10,000.
Subscriber CA wrote:
You asked us to look for 9950 but I just bought at 3.80 and sold at 6.10 for one contract. I was wondering if your brain is an unique and predictable. I was puzzled myself why market was rejected on Fed rate and it came down. I thought market would be happy with the red rate decision. Please explain why the market became negative.
You are an excellent teacher I have had ever seen. I am still learning your unique teaching everyday. Superb teacher. I admire it.
Thanks,
Floyd's answer: The magic 000's are part of it, and the FEDS mentioned the word inflation. We are simply at market tops that have been driven up very quickly.
On Monday I wrote Blue Chip Option, our sister service, subscribers and posted a blog that I think should be a key read in understanding how the economy is really doing.
So, direct from www.bluechipoptions.com:
Floydian Theory on Okun's Law-THIS IS AN IMPORTANT STOCK READ
The economist Arthur Okun first formulated the theory that says "when the economy grows, it produces jobs at a predictable rate, and if it shrinks, it sheds them at a similar regular pace.
Joshua Ramo has an excellent article in Time Magazine. Cut and paste to your browser and really study, as Mr. Ramo explains the unusual predicament we are in, in that the economy is growing, but unemployment is not shrinking.
http://www.time.com/time/business/article/0,8599,1921439,00.html
As you complete the article, and think out Okun's Rule of Thumb, we are perhaps truly in a shift within our nation, with more unemployed than ever before, and for a much longer time.
As a business consultant for many years I could visually watch the layers of management at firms that were unnecessary, and that many companies were simply not productive with their employees.
We all know this. With the Cash for Clunkers it was 4 for 5 American cars clunked in, and 4 for 5 new cars being bought Japanese.
Walmart is China, and doing well, so it appears we are not willing to stuff. Trade tariff discussions are already starting.
I believe Obama's stimulus package has held us steady so far, and that the market is now naturally producing its Fib retracement , some on good news, some on hope, but most of our rise has been
as pre-indicater of what the economy should become. The market precedes the general economy. The issue of healthcare will be resolved, in a way I think that will define really what kind of nation we are, one led by anger and fear tactics, or one that can be bi-partisan and represent all the people, without the lobbyists that lead our world.
Wall Street has been warned. Regulations are not yet in place, and many schemes are already being hatched. We have to watch for this, as many predict there are more "hidden numbers" that will become clear as the high unemployment hits the GDP, and hits our taxes, as there will then again be more subsidies. Stimulus some believe may need a second phase.
My point in Okun's "Law" is that his extraordinary "obvious" theorem "should be" right, but some tides are turning, or we are modifying the theory.
Wednesday, September 23, 2009
Never Look Back
The week after September triple witching the Dow was down five in a row 2002-2006, with heavy losses in 2002 through 2005. Despite our error on calling a call a put in our new signal, traders caught on and were able to trade the Oct 500 Call for $1.00 to $1.50 per contract profits.
We hold a first hedge position to one of two puts, and will advise selling and stop loss below a bit differently on our hedge position, so take note.
Most floor traders believe the market is poised to run to 9950, or just above 10,050 but it's not yet showing in the results in the market. For example, the PPT did not come to the rescue today, the first of FED meetings comments, and the market only increased slightly. Our manual calculation for the bell curve analysis, "the count" is 2.
Some comments from subscribers:
"Hi Floyd,
We have the 510 oct call and are sitting on a small
profit.
Would you hang on to it a bit longer or sell and go in to some puts?
We don't have enough money to buy both ways at the moment" JC
Floyd-> Always be willing to take your profits off the table, and never look back.
"Today I made my biggest play so far. I've been buying tiny amounts - 2 and 3 contracts. I took a week or two off to watch the market and trade less while waiting for waiting for a good opportunity to make a bigger play. Today the timing was right and I bought 8 contracts of the call at 10:07 am for the day low of 5.90. I sold 7 minutes and 5 seconds later for 6.40. A quick 10% and an extra 400 dollars.
"I have to admit I was excited. My logic in buying at that time: the world markets have a positive bias today, I bought at the pivot point on a quick retracement from dow resistance at 9880, so I expected a bounce up from there. I got it: MR"
"I am doing better on reading the same signal, falling in love as you say. The 500C has returned profits day after day, as I watch the support and resistance lines.
I'm averaging $1.00 per contract, trading 10 contracts, and following the rules better. MBD"
"It was never my thinking that made the big money for me. It was always my sitting. Got that. My sitting tight" -Jesse Livermore, How to Trade Stocks, famed early 20th century trader
We hold a first hedge position to one of two puts, and will advise selling and stop loss below a bit differently on our hedge position, so take note.
Most floor traders believe the market is poised to run to 9950, or just above 10,050 but it's not yet showing in the results in the market. For example, the PPT did not come to the rescue today, the first of FED meetings comments, and the market only increased slightly. Our manual calculation for the bell curve analysis, "the count" is 2.
Some comments from subscribers:
"Hi Floyd,
We have the 510 oct call and are sitting on a small
profit.
Would you hang on to it a bit longer or sell and go in to some puts?
We don't have enough money to buy both ways at the moment" JC
Floyd-> Always be willing to take your profits off the table, and never look back.
"Today I made my biggest play so far. I've been buying tiny amounts - 2 and 3 contracts. I took a week or two off to watch the market and trade less while waiting for waiting for a good opportunity to make a bigger play. Today the timing was right and I bought 8 contracts of the call at 10:07 am for the day low of 5.90. I sold 7 minutes and 5 seconds later for 6.40. A quick 10% and an extra 400 dollars.
"I have to admit I was excited. My logic in buying at that time: the world markets have a positive bias today, I bought at the pivot point on a quick retracement from dow resistance at 9880, so I expected a bounce up from there. I got it: MR"
"I am doing better on reading the same signal, falling in love as you say. The 500C has returned profits day after day, as I watch the support and resistance lines.
I'm averaging $1.00 per contract, trading 10 contracts, and following the rules better. MBD"
"It was never my thinking that made the big money for me. It was always my sitting. Got that. My sitting tight" -Jesse Livermore, How to Trade Stocks, famed early 20th century trader
Tuesday, September 22, 2009
Option Trading is like Jazz Music
The market opened with a drop that came within the first 30 minutes to 9685. It helped carry Europe down to a lower close, and the market spent the rest of the day trying to "hold up."
Day traders on the October 500C were able to lock fast 20% profits on the buy down. I saw more strength initially in the downward movement, and continue to see it, and several subscribers wisely wrote me "should I get in on the downside" to trade the call. It is important here each trader follow their own intuition and risk/ratio warning, as calls did have potential and the market may indeed not be ready for downside yet.
Our Dow projections are clear in how we see what the market could do, and profits could be good on whipsaw.
The following article we think perfectly explains the thinking of inflation, and the rising or holding unemployment that is not patterning with a rising economy. This is an important read.
http://online.wsj.com/article/SB125348951896526259.html?mod=djemITP
And lastly, on my first day back from vacation Advanced Mentoring client MR, who I was emailing with concerning his work, I'd like to quote how he sees option trading, as this is how traders learn what true trading is:
"It’s neat. It’s mathematical, yet artistic. It’s kinda like Jazz music. It flows, randomly and seemingly uncontrollable at times – but it has structure that may not be readily apparent at first glance. Many don’t appreciate it for what it is, and don’t take the time to really get to know it so that they can appreciate it – even fewer take the time to learn how to play it. I’ve lost a little money doing it so far – but I am starting to be more honest with myself about expectations, limitations, and abilities. More often I can think and feel when it is a good time to trade, and when it’s a good time to watch, document, and learn. It will come with time."
Day traders on the October 500C were able to lock fast 20% profits on the buy down. I saw more strength initially in the downward movement, and continue to see it, and several subscribers wisely wrote me "should I get in on the downside" to trade the call. It is important here each trader follow their own intuition and risk/ratio warning, as calls did have potential and the market may indeed not be ready for downside yet.
Our Dow projections are clear in how we see what the market could do, and profits could be good on whipsaw.
The following article we think perfectly explains the thinking of inflation, and the rising or holding unemployment that is not patterning with a rising economy. This is an important read.
http://online.wsj.com/article/SB125348951896526259.html?mod=djemITP
And lastly, on my first day back from vacation Advanced Mentoring client MR, who I was emailing with concerning his work, I'd like to quote how he sees option trading, as this is how traders learn what true trading is:
"It’s neat. It’s mathematical, yet artistic. It’s kinda like Jazz music. It flows, randomly and seemingly uncontrollable at times – but it has structure that may not be readily apparent at first glance. Many don’t appreciate it for what it is, and don’t take the time to really get to know it so that they can appreciate it – even fewer take the time to learn how to play it. I’ve lost a little money doing it so far – but I am starting to be more honest with myself about expectations, limitations, and abilities. More often I can think and feel when it is a good time to trade, and when it’s a good time to watch, document, and learn. It will come with time."
Thursday, September 17, 2009
I'm a Coach and a Mentor for Those Who Write In
I followed the market well from my walks on the beach. My iPhone in hand, stopping to swim, call traders had every opportunity to buy at lows on the market dip and sell to the market tops of theoretical Dow 9840.
Yesterday was a perfect day for a trader that understands our support and resistance lines, as calls were easy to hold or buy at good prices, only to see the market explode to the upside. We stop lossed the put, and will only offer a call trade under certain conditions.
The market hit 9639 lows, indicating higher lows, and higher highs, all a sign of a bull market.
I've also reconstructed manually our count calculation using a different option chain to reflect more where I think the market is.
Tomorrow is September triple witching. The Dow was up 4 straight and 5 of the last 6 years.
Saturday is Rosh Hashanah.
Floyd will be back trading full time next week. I have a suggestion. With more reflective thought while on vacation I realized that the many subscribers who email with me daily, the vast majority are subscribers.
Since we've begun offering the 30 day free trial we have signed up many people that want to see how an option service works. Remember, during this trial they do not gain access to our videos, OEX manual, or the details of how we trade, because it's FREE, but they do get a basic instructional video and can write me anytime. Most don't.
I think the primary reason, besides performance, that OEX Options has been able to place in the top 10 Readers Choice Advisory Services Award by prestigious Stocks and Commodities Magazine for both 2008 and 2009 is the right of the subscriber to email directly to the trader and teacher for a personal, and often detailed, email response. I've made many friends as I've mentored stock and option traders. Trial subscribers, WRITE me....get to know me while you're studying the daily pre market Alert.
Anyway, I'm back Monday!
I can help a trader with questions, referring study, explaining, or just talking about trading. I will put time into you. This is our service. Don't hesitate to email.
Yesterday was a perfect day for a trader that understands our support and resistance lines, as calls were easy to hold or buy at good prices, only to see the market explode to the upside. We stop lossed the put, and will only offer a call trade under certain conditions.
The market hit 9639 lows, indicating higher lows, and higher highs, all a sign of a bull market.
I've also reconstructed manually our count calculation using a different option chain to reflect more where I think the market is.
Tomorrow is September triple witching. The Dow was up 4 straight and 5 of the last 6 years.
Saturday is Rosh Hashanah.
Floyd will be back trading full time next week. I have a suggestion. With more reflective thought while on vacation I realized that the many subscribers who email with me daily, the vast majority are subscribers.
Since we've begun offering the 30 day free trial we have signed up many people that want to see how an option service works. Remember, during this trial they do not gain access to our videos, OEX manual, or the details of how we trade, because it's FREE, but they do get a basic instructional video and can write me anytime. Most don't.
I think the primary reason, besides performance, that OEX Options has been able to place in the top 10 Readers Choice Advisory Services Award by prestigious Stocks and Commodities Magazine for both 2008 and 2009 is the right of the subscriber to email directly to the trader and teacher for a personal, and often detailed, email response. I've made many friends as I've mentored stock and option traders. Trial subscribers, WRITE me....get to know me while you're studying the daily pre market Alert.
Anyway, I'm back Monday!
I can help a trader with questions, referring study, explaining, or just talking about trading. I will put time into you. This is our service. Don't hesitate to email.
Wednesday, September 16, 2009
Day Trading Poker
Today, even I traded. It was a bit too easy and showed a resiliency, on low volume, to the market that actually shows a traditional PNF chart that a bull market could continue.
The market showed negative futures, and enough spikes and valleys to move from a low of theoretical Dow 9541 to a high of 9754, just beyond what we saw as the actual market top.
All calls owned or that were bought were profitable. Most traders were able to buy calls at near prior day, or lower, and sell right at our market tops.
And a succinct analysis of today's trading from Philip:
"Hope you're enjoying your vacation. Purchased some inventory in the OEX Sep 500 Call today at 4.00, sold to 4.80 for .80 profit. Couldn't really afford to get in to the 480 Call today: seemed too rich for my blood and volume was less appealing to me; I missed entry yesterday due to another job I have - teaching film students. Still losing on the 440 Put, but the 500 call profits combined to make it a profitable day.
What you wrote a while ago about purchasing the call option even though you're a contrarian was a good lesson for me. 'Everything in this world operates not on reality, but the perception of reality.' (A quote I borrowed from one of my favorite movies, Sneakers.)"
-PRW, L2
From Trader JK, a bit of sobriety: http://money.cnn.com/2009/09/10/news/economy/insider.sales/index.htm
Of interest in 2001 the Dow had a 1370 point loss, up to then one of the four worst weeks in market history. This is an historical fact that two years ago would have seemed a "shocking thing."
Now, it's the norm. How perspectives change.
I'm having a reflective week on the beaches with my wife, and part of having less "input" has allowed me time to think back on what a great month I had, and that we all did, just trading calls, and losing on only a few puts, and how effective money/risk management is so critical. I have created patterns for my stock trading that allow me to stay calm, and those same patterns have led our success in the market last year and this with Blue Chip Options and our core portfolios, despite "the world ending last October."
Here's a few examples of things I've learned:
*Whenever I make money I take a certain % and take it out of the trading account. I protect a share of my profits.
*When I am doing really well, I invest more. I follow my "luck."
*When things begin to go wrong for me, I simply stop trading. It may be a few hours, or a few days, but I just walk away from myself.
*I do not care what should be, but only what is. The market should NOT be going up as it had been this past month by pure logic, and was massively overbought by traditional standards, but I did not let my bias influence my trading. I personally don't give a blip how the market does if I can profit from what it does.
*I am fanatical about re-calculating the support/resistance and pivot point by calculator at least once during the trading day, if any strong market movement. Did you know that our Pivot Point Calculator will work with any stock, or index, and that we teach how at www.bluechipoptions.com
*By re-calcualting I can see new potential tops and bottoms.
*I "fall in love" with one option if I can, so that I can watch only the movement on it, and "play the other traders" that are trading that same issue. I call it "day trading poker"":)
The market showed negative futures, and enough spikes and valleys to move from a low of theoretical Dow 9541 to a high of 9754, just beyond what we saw as the actual market top.
All calls owned or that were bought were profitable. Most traders were able to buy calls at near prior day, or lower, and sell right at our market tops.
And a succinct analysis of today's trading from Philip:
"Hope you're enjoying your vacation. Purchased some inventory in the OEX Sep 500 Call today at 4.00, sold to 4.80 for .80 profit. Couldn't really afford to get in to the 480 Call today: seemed too rich for my blood and volume was less appealing to me; I missed entry yesterday due to another job I have - teaching film students. Still losing on the 440 Put, but the 500 call profits combined to make it a profitable day.
What you wrote a while ago about purchasing the call option even though you're a contrarian was a good lesson for me. 'Everything in this world operates not on reality, but the perception of reality.' (A quote I borrowed from one of my favorite movies, Sneakers.)"
-PRW, L2
From Trader JK, a bit of sobriety: http://money.cnn.com/2009/09/10/news/economy/insider.sales/index.htm
Of interest in 2001 the Dow had a 1370 point loss, up to then one of the four worst weeks in market history. This is an historical fact that two years ago would have seemed a "shocking thing."
Now, it's the norm. How perspectives change.
I'm having a reflective week on the beaches with my wife, and part of having less "input" has allowed me time to think back on what a great month I had, and that we all did, just trading calls, and losing on only a few puts, and how effective money/risk management is so critical. I have created patterns for my stock trading that allow me to stay calm, and those same patterns have led our success in the market last year and this with Blue Chip Options and our core portfolios, despite "the world ending last October."
Here's a few examples of things I've learned:
*Whenever I make money I take a certain % and take it out of the trading account. I protect a share of my profits.
*When I am doing really well, I invest more. I follow my "luck."
*When things begin to go wrong for me, I simply stop trading. It may be a few hours, or a few days, but I just walk away from myself.
*I do not care what should be, but only what is. The market should NOT be going up as it had been this past month by pure logic, and was massively overbought by traditional standards, but I did not let my bias influence my trading. I personally don't give a blip how the market does if I can profit from what it does.
*I am fanatical about re-calculating the support/resistance and pivot point by calculator at least once during the trading day, if any strong market movement. Did you know that our Pivot Point Calculator will work with any stock, or index, and that we teach how at www.bluechipoptions.com
*By re-calcualting I can see new potential tops and bottoms.
*I "fall in love" with one option if I can, so that I can watch only the movement on it, and "play the other traders" that are trading that same issue. I call it "day trading poker"":)
Tuesday, September 15, 2009
Yet Again Played in the Fear Game
It's a good time to be on vacation, as the market appears to be. Movement took place between 9499 on a theoretical low to 9671 on the high. I watched by iPhone a few times on the beach.
Traders I would think would have been able to buy for the new signals. We emphasize the count is now 10 to the call; any more upside that is possible, before we re-project the Dow, should be no more than 25%
The USD continued to lose value, the German bund notes selling for more, and commodities were affected.
By 6.30 a.m. futures were down over 70 points, showing a precursor to the market energy. Fear was building back up in the market during overnight trading. New China restrictions brought fear that there would be a Chinese/American trade war, and it's likely. With oil down, ships are more competitive with freight rates, and with factories worldwide not at capacity (not just China) we may see a bit of a consumer war begin.
But remember, by now China has managed to seize up many of their own natural commodity resources (buying up Australia, Africa), etc.
________________________________________________________
As we study the various reports that come at us pay special attention to the GDP and CPI reports, as they are two of the most important indicators published. With varying degrees of focus, central banks base their rate decisions on the health of the economy and the rate of inflation growth. Thus, knowing the latest GDP and CPI results, and how they are being interpreted by the market, can help traders formulate an opinion on where interest rates, and therefore, currencies, may go in the future.
In the developed world, central banks rarely have to worry about trying to keep the GDP in check. However, when growth slows dramatically, or begins to turn negative, central banks cut interest rates. We saw the downside of this in the Bubbles Greenspan era of low interest rates, without forethought, and we see it now under Bernanke, forced to keep rates low to stimulate economic growth. CPI is what Bernanke will watch here, to see if inflation is beginning to show. If the CPI decreases, it is construed as the lessening of price pressures.
A simple rule: A higher CPI tends to be bullish for a currency, and a lower one bearish. How the USD fares affects Gold, and our U.S. Treasury debt, and the willingness of others to back our credit.
What most Americans fail to understand in "things aren't that much better yet" is that we are unwinding a giant ball of string, that has mines attached throughout. The Fed has:
1. Lowered rates to near 0%
2. Increased its balance sheet to more than 2 trillion
3. Created a variety of liquidity programs
4. Began paying interest on reserves as it moved into what economists call "quantitative easing" modality.
We as a country created this mess, by our own bubbles, by who we elected, and how we allowed the country to be run, and by allowing lobbyists to run our 540 leaders. Greenspan, who helped create this bubble, now believes it is inflation we must be concerned about, not deflation. Bernanke's job is to all the stimulus (which had to be created on debt) to work WITHOUT sparking a historic round of inflation.
Most Americans believe the stock market goes up, and taxes go down, when Republican are in office. Historically, part of this is true. The stock market DOES not hold highs during a Republican administration, and taxes are cut.
But, historically, Republicans build larger deficits (surprised?) than Democrats.
As Americans struggle with even understanding the healthcare issues, try to justify the 428% profit increases health insurers have managed since 2003. Why do medications cost more in the U.S.?
If you had to pay your own insurance (where it were no longer a benefit an employer offered because of cost) could you afford to do so?
Is breeding competition rather than allowing collusion between such companies truly "socialism", or have we yet again been played in the fear game of the "government taking over".
We should be more worried about our rights of privacy under You Tube. The world has changed.
Traders I would think would have been able to buy for the new signals. We emphasize the count is now 10 to the call; any more upside that is possible, before we re-project the Dow, should be no more than 25%
The USD continued to lose value, the German bund notes selling for more, and commodities were affected.
By 6.30 a.m. futures were down over 70 points, showing a precursor to the market energy. Fear was building back up in the market during overnight trading. New China restrictions brought fear that there would be a Chinese/American trade war, and it's likely. With oil down, ships are more competitive with freight rates, and with factories worldwide not at capacity (not just China) we may see a bit of a consumer war begin.
But remember, by now China has managed to seize up many of their own natural commodity resources (buying up Australia, Africa), etc.
________________________________________________________
As we study the various reports that come at us pay special attention to the GDP and CPI reports, as they are two of the most important indicators published. With varying degrees of focus, central banks base their rate decisions on the health of the economy and the rate of inflation growth. Thus, knowing the latest GDP and CPI results, and how they are being interpreted by the market, can help traders formulate an opinion on where interest rates, and therefore, currencies, may go in the future.
In the developed world, central banks rarely have to worry about trying to keep the GDP in check. However, when growth slows dramatically, or begins to turn negative, central banks cut interest rates. We saw the downside of this in the Bubbles Greenspan era of low interest rates, without forethought, and we see it now under Bernanke, forced to keep rates low to stimulate economic growth. CPI is what Bernanke will watch here, to see if inflation is beginning to show. If the CPI decreases, it is construed as the lessening of price pressures.
A simple rule: A higher CPI tends to be bullish for a currency, and a lower one bearish. How the USD fares affects Gold, and our U.S. Treasury debt, and the willingness of others to back our credit.
What most Americans fail to understand in "things aren't that much better yet" is that we are unwinding a giant ball of string, that has mines attached throughout. The Fed has:
1. Lowered rates to near 0%
2. Increased its balance sheet to more than 2 trillion
3. Created a variety of liquidity programs
4. Began paying interest on reserves as it moved into what economists call "quantitative easing" modality.
We as a country created this mess, by our own bubbles, by who we elected, and how we allowed the country to be run, and by allowing lobbyists to run our 540 leaders. Greenspan, who helped create this bubble, now believes it is inflation we must be concerned about, not deflation. Bernanke's job is to all the stimulus (which had to be created on debt) to work WITHOUT sparking a historic round of inflation.
Most Americans believe the stock market goes up, and taxes go down, when Republican are in office. Historically, part of this is true. The stock market DOES not hold highs during a Republican administration, and taxes are cut.
But, historically, Republicans build larger deficits (surprised?) than Democrats.
As Americans struggle with even understanding the healthcare issues, try to justify the 428% profit increases health insurers have managed since 2003. Why do medications cost more in the U.S.?
If you had to pay your own insurance (where it were no longer a benefit an employer offered because of cost) could you afford to do so?
Is breeding competition rather than allowing collusion between such companies truly "socialism", or have we yet again been played in the fear game of the "government taking over".
We should be more worried about our rights of privacy under You Tube. The world has changed.
Monday, September 14, 2009
We Have a Long Way to Go to be Smart
The market opens with a count of 7 to the call. Over the past up market days rebounds and efforts have led this market to a 5 to 7 to the call, but always a waning option cycle strength.
The Dow again reached 9690 as a high, and 9531 as a low. Compare these to our Dow projections which have been "in process" for going on three weeks, showing a market now stuck in a range, hesitant to advance, and every other chartist talking about a fall.
Being on vacation I see an obese America (80% of all people I see on the beach) all reading the same murder mysteries bought at airports, and the majority driving large SUV's or large cars. These are the "moderately affluent to affluent" Americans able to afford to enjoy an exclusive island.
It reminds me of Joe Wlson at Congress with his "you lie," and furthers my thinking that our nation is obese, does not "read," studies soundbites and believes them, and still mostly think hybrid cars are electric plug ins.
We have such a long way to go to be smart.
I am on vacation on an island off Florida. I see the island as "tween the waters," and years ago named my journal for business thinking "tween the waters" because it is true.
We always are. From a psychological point of view the human being is "preparing for a crisis, in the midst of a crisis, or in the aftermath of one." This is "tween the waters." We think we have the answers, and many of us believe in "absolutes," while others work with facts and logic, but only the facts and logic that we KNOW so far. We do not know what we do know. It is this we must learn.
I have had good "face time" with Floyd as I wander beaches, thinking about our financial service businesses, both OEX and Blue Chip Options and what I read in the many emails I receive from subscribers.
Human nature if built around fear and greed, just as the art of negotiation is led by these influences. The more time you can spend thinking about how you, and the market, reacts with FEAR or GREED, the better chance you have of trading successfully.
One of my favorite questions, or comments, from subscribers is: "I sold at 22% and missed out when the option went up 45%."
I'll let you just think about this statement.
This week I plan to be reflective in my comments to you, as I find myself a calm man at 58, trading well, and feeling as if I am helping others. I love my family and my dog. I want to contribute, and find that the articles and blogs on www.bluechipoptions.com continue to offend, argue, and generally act as a provocateur. I am calm by my own training, but relentless and blunt in my opinion. Years spent as the President of a business consulting company that specializes in family business restructuring, and bankruptcies to business development, I've become convinced, for example, that 90% of new small businesses have a great chance of failure (my guess at the %).
I also see what good business can be, and that the art of trade must somehow enter business again. There is so much information now available that we are able to project projections, and it's amusing to watch.
The Dow again reached 9690 as a high, and 9531 as a low. Compare these to our Dow projections which have been "in process" for going on three weeks, showing a market now stuck in a range, hesitant to advance, and every other chartist talking about a fall.
Being on vacation I see an obese America (80% of all people I see on the beach) all reading the same murder mysteries bought at airports, and the majority driving large SUV's or large cars. These are the "moderately affluent to affluent" Americans able to afford to enjoy an exclusive island.
It reminds me of Joe Wlson at Congress with his "you lie," and furthers my thinking that our nation is obese, does not "read," studies soundbites and believes them, and still mostly think hybrid cars are electric plug ins.
We have such a long way to go to be smart.
I am on vacation on an island off Florida. I see the island as "tween the waters," and years ago named my journal for business thinking "tween the waters" because it is true.
We always are. From a psychological point of view the human being is "preparing for a crisis, in the midst of a crisis, or in the aftermath of one." This is "tween the waters." We think we have the answers, and many of us believe in "absolutes," while others work with facts and logic, but only the facts and logic that we KNOW so far. We do not know what we do know. It is this we must learn.
I have had good "face time" with Floyd as I wander beaches, thinking about our financial service businesses, both OEX and Blue Chip Options and what I read in the many emails I receive from subscribers.
Human nature if built around fear and greed, just as the art of negotiation is led by these influences. The more time you can spend thinking about how you, and the market, reacts with FEAR or GREED, the better chance you have of trading successfully.
One of my favorite questions, or comments, from subscribers is: "I sold at 22% and missed out when the option went up 45%."
I'll let you just think about this statement.
This week I plan to be reflective in my comments to you, as I find myself a calm man at 58, trading well, and feeling as if I am helping others. I love my family and my dog. I want to contribute, and find that the articles and blogs on www.bluechipoptions.com continue to offend, argue, and generally act as a provocateur. I am calm by my own training, but relentless and blunt in my opinion. Years spent as the President of a business consulting company that specializes in family business restructuring, and bankruptcies to business development, I've become convinced, for example, that 90% of new small businesses have a great chance of failure (my guess at the %).
I also see what good business can be, and that the art of trade must somehow enter business again. There is so much information now available that we are able to project projections, and it's amusing to watch.
Friday, September 11, 2009
As we expected, the market continued it's climb and hit highs of 9673, and lows of 9468. We took no entry to the call, but added to our trade buy on the open
As I'm off on holiday I'm having fun keeping up with the news, which I'm doing more by TV than computer, and am amazed by the amount of dribble we allow ourselves to listen to and believe.
I'm off on an island this week, walking the beaches and relaxing, and gathering input in my early morning and late evening studies, as I do when studying and trading for you. But I've experimented a bit and watched TV economics one day to then read Reuters, Bloomberg and qualified sources on the web, and it helps put what YOU as subscribers deal with much more in perspective.
You see, I am not one for TV. I seldom watch it, don't like most things on TV (because they are mind numbingly stupid, nothing more) and have spent years analyzing Big Brother and how it could stay on the air for 11 years.
I want to meet the people that watch this stuff.
So, not being a TV guy, I spend little time dealing with the propaganda you hear on the financial channels, or on general news media. It's not bias, it's simply that they do not tell us anything. They repeat false facts, and interpret, and analyze around events.
You'll do better with 30 minutes on Bloomberg, or the like, a day to truly understand economics and the market.
_________________
There are two credit crunches still coming. First, commercial real estate has yet to even be realized fully for the impact it can have on real estate and the general market. There are empty shopping plazas, and leasing tenants are not able to get their rents reduced. Even Sarah Palin could figure out this means someone is not paying the bills to the banks and insurance companies that own these loans, and that these loans themselves have not yet been correctly recalculated for "real value." It's a disaster waiting to happen.
The second crunch is bigger, it is YOU. As the banks scramble to make up for their slimey losses of the last few years, and in advance of the new law going in protecting us from usury, each bank has quietly raised interest rates to astronomical 24% plus levels, lowered amount of time to pay on time (thusly allowing interest to accumulate), and cut credit limits. This is hitting small businesses, families, and the many Americans that buy on credit card, and use the cards for "living".
Living within means, and going back to "lay a way" sounds very good, very much like the Waltons lived, and it is no longer Walton time. I project a lowering of consumer credit without the use of commercial credit cards, and that it will all catch up with us.
I have one personal comment about the Republicans behavior during President Obama's speech: Children that have yet to learn to play in the sandbox. So sad.
As I'm off on holiday I'm having fun keeping up with the news, which I'm doing more by TV than computer, and am amazed by the amount of dribble we allow ourselves to listen to and believe.
I'm off on an island this week, walking the beaches and relaxing, and gathering input in my early morning and late evening studies, as I do when studying and trading for you. But I've experimented a bit and watched TV economics one day to then read Reuters, Bloomberg and qualified sources on the web, and it helps put what YOU as subscribers deal with much more in perspective.
You see, I am not one for TV. I seldom watch it, don't like most things on TV (because they are mind numbingly stupid, nothing more) and have spent years analyzing Big Brother and how it could stay on the air for 11 years.
I want to meet the people that watch this stuff.
So, not being a TV guy, I spend little time dealing with the propaganda you hear on the financial channels, or on general news media. It's not bias, it's simply that they do not tell us anything. They repeat false facts, and interpret, and analyze around events.
You'll do better with 30 minutes on Bloomberg, or the like, a day to truly understand economics and the market.
_________________
There are two credit crunches still coming. First, commercial real estate has yet to even be realized fully for the impact it can have on real estate and the general market. There are empty shopping plazas, and leasing tenants are not able to get their rents reduced. Even Sarah Palin could figure out this means someone is not paying the bills to the banks and insurance companies that own these loans, and that these loans themselves have not yet been correctly recalculated for "real value." It's a disaster waiting to happen.
The second crunch is bigger, it is YOU. As the banks scramble to make up for their slimey losses of the last few years, and in advance of the new law going in protecting us from usury, each bank has quietly raised interest rates to astronomical 24% plus levels, lowered amount of time to pay on time (thusly allowing interest to accumulate), and cut credit limits. This is hitting small businesses, families, and the many Americans that buy on credit card, and use the cards for "living".
Living within means, and going back to "lay a way" sounds very good, very much like the Waltons lived, and it is no longer Walton time. I project a lowering of consumer credit without the use of commercial credit cards, and that it will all catch up with us.
I have one personal comment about the Republicans behavior during President Obama's speech: Children that have yet to learn to play in the sandbox. So sad.
Thursday, September 10, 2009
The Ten Trading Mistakes
The market performed well for us yesterday. Our open signal, and new buy, on the OXBIP September call was profitable to 5.70, just below our top sell.
Traders were able to buy the new signal to the put OXBIH was available as low as 3.20, and hit highs of 4.00. Some traders were able to take tight profits but most of us hold this, and that's good, as downside may now occur as it appears the 9617 theoretical Dow top we hit yesterday may be the waning of the call. As the afternoon progressed more downside occurred, and we suggest we may see lows hit now through Friday, leading us downward to our lower Dow projections.
Nice call profit, and we now own a put. We'll hold only a one way contrarian position at this time.
_______________________________________________________________
I recently read an article "Ten Trading Mistakes to Avoid" by Christine Birkner in Futures Magazine, August 2009 issue.
She did a great job listing things like: skipping research, not having a trading plan, not doing due diligence, not placing stops.
It's all the stuff I talk about all the time.
It made me think for both new subscribers trying our service for the first time, or for traders struggling to maintain the composure to trade the OEX, of the most important thing.
This is not easy. Half the problems with the U.S. are based on "this is not easy" and we keep expecting things to just "get done."
If you become capable of consistently earning 20 to 30% a day without leaving your home you are someone that is skilled. Skills are learned. The Ten Trading mistakes I read, and she was spot on with each, were all people "expecting to be able to do something without investing in their own knowledge."
As I leave on vacation I'll be writing you some reflective thoughts in our commentary on what has made me a successful trader, and how I believe the market can best be traded.
Part of my taking a vacation is from the work put in on setting up our new service, www.bluechipoptions.com
I would be honored if you would take the time to look at our work, our blogs, and consider all the ways we are making money in the market.
It all goes back to this is not easy. Last week we had a 41% return on an option in Blue Chip within 60 minutes of trading. Not all traders got it, many did, and it was all in learning how to execute, which is the same thing we teach at OEX Options.
Most people don't read well, or much. That's sad. The detail of how I teach the stock market is in our password protected subscriber area, with our recommendations of what books to read about the market, and ONLY those books, and how to "see the market, rather than be seen by it."
Traders were able to buy the new signal to the put OXBIH was available as low as 3.20, and hit highs of 4.00. Some traders were able to take tight profits but most of us hold this, and that's good, as downside may now occur as it appears the 9617 theoretical Dow top we hit yesterday may be the waning of the call. As the afternoon progressed more downside occurred, and we suggest we may see lows hit now through Friday, leading us downward to our lower Dow projections.
Nice call profit, and we now own a put. We'll hold only a one way contrarian position at this time.
_______________________________________________________________
I recently read an article "Ten Trading Mistakes to Avoid" by Christine Birkner in Futures Magazine, August 2009 issue.
She did a great job listing things like: skipping research, not having a trading plan, not doing due diligence, not placing stops.
It's all the stuff I talk about all the time.
It made me think for both new subscribers trying our service for the first time, or for traders struggling to maintain the composure to trade the OEX, of the most important thing.
This is not easy. Half the problems with the U.S. are based on "this is not easy" and we keep expecting things to just "get done."
If you become capable of consistently earning 20 to 30% a day without leaving your home you are someone that is skilled. Skills are learned. The Ten Trading mistakes I read, and she was spot on with each, were all people "expecting to be able to do something without investing in their own knowledge."
As I leave on vacation I'll be writing you some reflective thoughts in our commentary on what has made me a successful trader, and how I believe the market can best be traded.
Part of my taking a vacation is from the work put in on setting up our new service, www.bluechipoptions.com
I would be honored if you would take the time to look at our work, our blogs, and consider all the ways we are making money in the market.
It all goes back to this is not easy. Last week we had a 41% return on an option in Blue Chip within 60 minutes of trading. Not all traders got it, many did, and it was all in learning how to execute, which is the same thing we teach at OEX Options.
Most people don't read well, or much. That's sad. The detail of how I teach the stock market is in our password protected subscriber area, with our recommendations of what books to read about the market, and ONLY those books, and how to "see the market, rather than be seen by it."
Tuesday, September 8, 2009
Calls Were Profitable
The day after Labor Day the Dow has been up 12 of the last 14 years. Friday the market was massively flat, but allowed all call traders to exit profitably right near end of day with a 60 point move up.
Many day traders also reported trading in and out on the fluctuations around the unemployment report (it's only 9.7%, or "real" at 16.7%) on both put and call, as the market moved from a 9486 theoretical top to a 9281 low.
Calls were profitable for as much as 50%. With futures flat, no entry would have been taken to the put, and we have no open signals.
With the count at 6 the bias is more clear to the call, despite overbought conditions, any good news could lead us up more. The euphoria seems not to "consider bad news" what it is right now unless led by a downside start in Europe or Asia, which is usually the reverse. We'll lead with a call, and no new signal to the put, pending how bias is established and if we reach market tops early in the week. The market may be setting up for a fast consolidation that could yield superb returns; we'll advise as the market moves.
America remains a split nation, fighting amongst the 540 thieves of Congress playing solitaire during meetings, or the RNC "staging" false facts around Town Hall meetings.
Many day traders also reported trading in and out on the fluctuations around the unemployment report (it's only 9.7%, or "real" at 16.7%) on both put and call, as the market moved from a 9486 theoretical top to a 9281 low.
Calls were profitable for as much as 50%. With futures flat, no entry would have been taken to the put, and we have no open signals.
With the count at 6 the bias is more clear to the call, despite overbought conditions, any good news could lead us up more. The euphoria seems not to "consider bad news" what it is right now unless led by a downside start in Europe or Asia, which is usually the reverse. We'll lead with a call, and no new signal to the put, pending how bias is established and if we reach market tops early in the week. The market may be setting up for a fast consolidation that could yield superb returns; we'll advise as the market moves.
America remains a split nation, fighting amongst the 540 thieves of Congress playing solitaire during meetings, or the RNC "staging" false facts around Town Hall meetings.
Friday, September 4, 2009
At War With Our Own Stupidity
Monday is Labor Day and the market is closed. I'd like to summarize how I see this week, and the gyrations of our market.
First, know our maxim:
* Try to always sell a stock so the person who buys it can make a profit. This way you enjoy most of the ride. Never go to the top of the ride.
Second, recognize that the typical trading range over the past 10 years is for the Dow to make a move bi-directionally, and to be volatile enough to slightly consolidate, over a 10 market day period.
This has recently been increasing to over 22 market days, a sign of high frequency trading prolonging moves, and perhaps the overwhelming euphoria of the country to say "something is really going right."
Third, my concern with any large run up is that if it is too fast it typically falters, and never regains the ground it had gotten to. A slower and steady move upward shows real buying and commitment to the market.
Instead we've seen day trading on bank stocks, and AIG, as our lead profit gains, around oil, while Gold moves only 6%.
We should be concerned that:
http://www.bloomberg.com/apps/news?pid=20601109&sid=apG_YeCYUyEg
and from Bloomberg:
"On Monday, a glum tone carried through the opening bell in New York after China's benchmark stock index, the Shanghai Composite, fell 6.7% to 2667.75, its lowest finish since May. Fears about an overhang of new stock issues in the Chinese market added to concerns over tightening credit. The volatile market, which is mostly closed to international investors, has given back nearly a quarter of its value since it peaked on Aug 4.
Markets in Europe also slipped, though London markets were closed for a holiday.
Heading into September, a notoriously bad month for stocks, the Dow industrials are up 8.75% for the year. That is just off from the best levels seen since early last November. Though trading volume has been light in recent days, the market has been able to hold on to a rally that sent the Dow up 12% since mid-July and up 45.8% from the March 9 low."
______________
Yesterday I received the following email from a subscriber concerning my ranting on the soap box on those searching for the Holy Grail, and it speaks my mind perfectly!
> "hello floyd,
>
> yesterday, a potential subscriber wrote to you asking:
>
"I am only able to devote about an hour to trading each day, or to learning about it, and have a portfolio of $60,000 I would like to immediately begin to trade, buying your Level 3 service, with goals of being self employed and earning $10,000 a month clear from trading options within 6 months."
>
> out of curiosity...what do you think to going rate would be for a service that allows you to make roughly $500/ day for only one hour of work on average (winners and losers plus commissions, cost of your level three service, etc.) that you have invested nothing into learning about it?.. since he wants to trade immediately, i assume he wants specific entry points at specific times and exit points given to him for his subscription...
>
> i would imagine that the subscription alone to this "black box system" would be more than his existing portfolio even if there was such a service and if there were a price to it...out of curiosity, what would you charge for such a service if it existed? would you offer it even if you had it?
>
> there are plenty of books out there that show how someone took $200 and turned it into a million and the author is willing to sell his information for $49.95...maybe he should start with one of those...
>
> just wondering!
>
> sincerely,
>
>
> jmp level 2"
_________
Now the market. Oil may hold steady with this: http://www.bloomberg.com/apps/news?pid=20601087&sid=ayNG0aazJhAY
This may prompt more stimulus, with Europe not raising interest rates: http://www.bloomberg.com/apps/news?pid=20601087&sid=aePx72uwvFMA
This shows the utter games being played on "socialized medicine": http://www.huffingtonpost.com/2009/09/02/gopers-decrying-socialize_n_275196.html
And this shows why our country is at war with our own stupidity: http://mobile.salon.com/politics/war_room/2009/09/02/obama_indoctrination/index.html
First, know our maxim:
* Try to always sell a stock so the person who buys it can make a profit. This way you enjoy most of the ride. Never go to the top of the ride.
Second, recognize that the typical trading range over the past 10 years is for the Dow to make a move bi-directionally, and to be volatile enough to slightly consolidate, over a 10 market day period.
This has recently been increasing to over 22 market days, a sign of high frequency trading prolonging moves, and perhaps the overwhelming euphoria of the country to say "something is really going right."
Third, my concern with any large run up is that if it is too fast it typically falters, and never regains the ground it had gotten to. A slower and steady move upward shows real buying and commitment to the market.
Instead we've seen day trading on bank stocks, and AIG, as our lead profit gains, around oil, while Gold moves only 6%.
We should be concerned that:
http://www.bloomberg.com/apps/news?pid=20601109&sid=apG_YeCYUyEg
and from Bloomberg:
"On Monday, a glum tone carried through the opening bell in New York after China's benchmark stock index, the Shanghai Composite, fell 6.7% to 2667.75, its lowest finish since May. Fears about an overhang of new stock issues in the Chinese market added to concerns over tightening credit. The volatile market, which is mostly closed to international investors, has given back nearly a quarter of its value since it peaked on Aug 4.
Markets in Europe also slipped, though London markets were closed for a holiday.
Heading into September, a notoriously bad month for stocks, the Dow industrials are up 8.75% for the year. That is just off from the best levels seen since early last November. Though trading volume has been light in recent days, the market has been able to hold on to a rally that sent the Dow up 12% since mid-July and up 45.8% from the March 9 low."
______________
Yesterday I received the following email from a subscriber concerning my ranting on the soap box on those searching for the Holy Grail, and it speaks my mind perfectly!
> "hello floyd,
>
> yesterday, a potential subscriber wrote to you asking:
>
"I am only able to devote about an hour to trading each day, or to learning about it, and have a portfolio of $60,000 I would like to immediately begin to trade, buying your Level 3 service, with goals of being self employed and earning $10,000 a month clear from trading options within 6 months."
>
> out of curiosity...what do you think to going rate would be for a service that allows you to make roughly $500/ day for only one hour of work on average (winners and losers plus commissions, cost of your level three service, etc.) that you have invested nothing into learning about it?.. since he wants to trade immediately, i assume he wants specific entry points at specific times and exit points given to him for his subscription...
>
> i would imagine that the subscription alone to this "black box system" would be more than his existing portfolio even if there was such a service and if there were a price to it...out of curiosity, what would you charge for such a service if it existed? would you offer it even if you had it?
>
> there are plenty of books out there that show how someone took $200 and turned it into a million and the author is willing to sell his information for $49.95...maybe he should start with one of those...
>
> just wondering!
>
> sincerely,
>
>
> jmp level 2"
_________
Now the market. Oil may hold steady with this: http://www.bloomberg.com/apps/news?pid=20601087&sid=ayNG0aazJhAY
This may prompt more stimulus, with Europe not raising interest rates: http://www.bloomberg.com/apps/news?pid=20601087&sid=aePx72uwvFMA
This shows the utter games being played on "socialized medicine": http://www.huffingtonpost.com/2009/09/02/gopers-decrying-socialize_n_275196.html
And this shows why our country is at war with our own stupidity: http://mobile.salon.com/politics/war_room/2009/09/02/obama_indoctrination/index.html
Thursday, September 3, 2009
This is an Art and a Science
During the great crash we all watched as our portfolios dropped by 50%. Recently we've been excited at the 48% rise from the lowest lows, which puts most individual traders still in the red.
With all the stories of the great successes of "getting in at the bottom" and following it up, I do not believe that "many real people," but "just Wall Street" were able to take these massive gains. Now, as we see the market begin to fluctuate it's fun to see what I call the "new bears" come out of the woodwork.
Many traders held through this downturn in which they are hoping that "it will rebound", or "it will come back". It's partially done so.
But it leads us to trades with OEX Options, and to help us understand we have to manage losses while we manage gains.
Use the analogy of a stock: Say you buy it at $20.00, and it goes down to $8.00. To break even, you need a 150% gain. The odds are not with you.
This is not as true with options, but it is why we have strict stop loss rules in place, and while we teach to limit your exposures, and control your risk management. Many traders initially start with us, and often do not paper trade, thinking "real" is better, but "real time paper trading" can help the trader see the repercussions of "double down buys" to the opposing signal, that continue to go bad.
The key to successful option trading is following rules. Admittedly the extended range market we've experienced has been trying, as has the lack of volatility (VIX) as the market trades in ranges, but successful traders have watched the option itself, "fallen in love with it" (meaning: getting to know the nuances) and traded fast and tight for great profits.
It leads back to stocks. I'm sure we have subscribers that may have 4 or 5, or more "loser" stocks in their portfolios, that are down 40 or 50%,and the subscriber is waiting for it to come "back." Odds are they will not, and this is true of options we "want" to hold for the "extra time,", so that they come back.
I love being your pessimist. I got an email from a potential subscriber yesterday that sums it up well:
"Sir
I am interested in your OEX and Blue Chip services. I am only able to devote about an hour to trading each day, or to learning about it, and have a portfolio of $60,000 I would like to immediately begin to trade, buying your Level 3 service, with goals of being self employed and earning $10,000 a month clear from trading options within 6 months.
Will you service help me here?"
My response, and perhaps it will be helpful to our subscribers:
Thanks for writing. Sorry, I don't think our service is at all right for you, and I don't want you to waste your money. One cannot learn a trade such as buying or selling stocks or options in "one hour a day", nor can one expect such strong returns on your investment in a short term, and without investing in YOU first....taking the time to learn the skill.
I know we have frustrated subscribers when they read "26 straight call profits" and they were only able to trade 2 or 3 successfully, OR were so afraid the market could not go up any more that they continued to add and add to put positions. This is the "it will come back" syndrome coupled with "the market is wrong," and I know better.
We've all been there.
Trading is an art and a science. You must study. You must take time with our manual online, and study our videos. You must understand and USE the daily pre-market alert. IN other words, you must be the student, and not looking ever for the Holy Grail.
Now for the market:
Nothing happened. Yesterday was an example of a day far beyond "flat lining." The market lived in FEAR, and did not move. Nothing was trade oriented. But, something will, and we'll keep both new signals open.
Only at 4.00 p.m. sharp did the market drop enough to show any bias. We'll keep both signals open.
With all the stories of the great successes of "getting in at the bottom" and following it up, I do not believe that "many real people," but "just Wall Street" were able to take these massive gains. Now, as we see the market begin to fluctuate it's fun to see what I call the "new bears" come out of the woodwork.
Many traders held through this downturn in which they are hoping that "it will rebound", or "it will come back". It's partially done so.
But it leads us to trades with OEX Options, and to help us understand we have to manage losses while we manage gains.
Use the analogy of a stock: Say you buy it at $20.00, and it goes down to $8.00. To break even, you need a 150% gain. The odds are not with you.
This is not as true with options, but it is why we have strict stop loss rules in place, and while we teach to limit your exposures, and control your risk management. Many traders initially start with us, and often do not paper trade, thinking "real" is better, but "real time paper trading" can help the trader see the repercussions of "double down buys" to the opposing signal, that continue to go bad.
The key to successful option trading is following rules. Admittedly the extended range market we've experienced has been trying, as has the lack of volatility (VIX) as the market trades in ranges, but successful traders have watched the option itself, "fallen in love with it" (meaning: getting to know the nuances) and traded fast and tight for great profits.
It leads back to stocks. I'm sure we have subscribers that may have 4 or 5, or more "loser" stocks in their portfolios, that are down 40 or 50%,and the subscriber is waiting for it to come "back." Odds are they will not, and this is true of options we "want" to hold for the "extra time,", so that they come back.
I love being your pessimist. I got an email from a potential subscriber yesterday that sums it up well:
"Sir
I am interested in your OEX and Blue Chip services. I am only able to devote about an hour to trading each day, or to learning about it, and have a portfolio of $60,000 I would like to immediately begin to trade, buying your Level 3 service, with goals of being self employed and earning $10,000 a month clear from trading options within 6 months.
Will you service help me here?"
My response, and perhaps it will be helpful to our subscribers:
Thanks for writing. Sorry, I don't think our service is at all right for you, and I don't want you to waste your money. One cannot learn a trade such as buying or selling stocks or options in "one hour a day", nor can one expect such strong returns on your investment in a short term, and without investing in YOU first....taking the time to learn the skill.
I know we have frustrated subscribers when they read "26 straight call profits" and they were only able to trade 2 or 3 successfully, OR were so afraid the market could not go up any more that they continued to add and add to put positions. This is the "it will come back" syndrome coupled with "the market is wrong," and I know better.
We've all been there.
Trading is an art and a science. You must study. You must take time with our manual online, and study our videos. You must understand and USE the daily pre-market alert. IN other words, you must be the student, and not looking ever for the Holy Grail.
Now for the market:
Nothing happened. Yesterday was an example of a day far beyond "flat lining." The market lived in FEAR, and did not move. Nothing was trade oriented. But, something will, and we'll keep both new signals open.
Only at 4.00 p.m. sharp did the market drop enough to show any bias. We'll keep both signals open.
Wednesday, September 2, 2009
China is the 8th Largest Holder of Gold
From 2003 to April 2009 China quietly increased its gold reserves by 75%. Today China is the 8th largest holder of Gold in the world, holding over 34 million ounces. Hmmm.
The USD has been in decline over 38 years, when Nixon took the dollar off the Gold Standard. Being not so smart, I notice the USD decline even more since 2002. Hmmm again. As the dollar goes down, historically Gold goes up. For example, the USD has declined 35% since 2002; gold has risen 290%.
Right now the U.S. is the largest debtor nation in the world. It's a fact that as a debts and deficits continue to skyrocket, and they will, that downward pressure will continue.
At www.bluechipoptions.com we teach how we invest in Gold and other precious commodities.
The issue with debtor mentality, no matter how it occurs (idiocy like Bush, or "roll the dice on the whole game") like Obama, is that the USD loses value. And this means that we as Americans have to have something that is going up in value. There is always a bubble in some form, even in the worst of times.
Contrarians believe the U.S. Treasury bill is in effect the new greatest bubble we've created, on debt, and over time the populace (Joe the Trader) will begin to understand that a world currency, or that "something is going too right." We're building our next new bubble in U.S. Government bonds.
Remember, stocks do not always outperform bonds.
My point to this is with the vast increase we've seen in the markets recently, we've also seen our credit card companies increasing the cost of borrowing dramatically, and this will longer term cut back the credit card spender. The average American has over $8000 in revolving credit card debt, yet only 56% of Americans even have a credit card. There are many false facts I could find in researching average debt, but it took me to:
1. declining home equity debt availability
2. housing declines, despite all the happy stuff that "it's getting better", continue
3. when Americans want stuff they are going to have to actually pay for it.
So, with that, read this article, which even leads with my slimey friends Goldman Sachs, and how they may have helped lead our "economic recovery". Do not trust false facts.
http://www.bloomberg.com/apps/news?pid=20601087&sid=auGWGWlnohNo
__________
At opening the Sept 490C was available as the market dipped,as low as 1.95 and sold to 3.20 by 10.11 a.m. This is how fast a trade is taking place. The buyer had to put a buy below prior day close in, prior to opening,based on negative futures, and immediately sell at r1. Smart traders took new entry to our new buy put, the Sept 475 Put, which was bought at 9.50 to 10.50 on 9/1 and sold to 13.00 by 11.35 a.m. for two profitable sales before noon.
And, our Sept440 Put hit 6.50, also profitable,by 11.30 a.m.
All three signals were sold profitably before noon, as the market dropped 175 points.
By 12 noon the following had taken place:
1. Dow hit highs of 9598, after an opening dip that allowed a call buy, and sale within 45 minutes
2. Dow hit theoretical Lows of 9276 before 11.30 a.m., allowing both open puts to be profitable.
Consolidation took place, and may at this time, be all there is, before more upside. It's too soon to
tell, but it is a resilient market
And by the end of the sell off, we hit a 9252 theoretical Dow low, the Sept460P hit tops of 8.50, and the Sept475P hit tops of 16.80, both beyond our recommended top.
And to think for the smart, fast trader, calls were profitable too.
And the talking heads now are telling us how bad the economy is. It's so fun to watch. I have the ticket for 2012: Cheney/Palin. It could end the world, and we would not have to worry about anything :)
The USD has been in decline over 38 years, when Nixon took the dollar off the Gold Standard. Being not so smart, I notice the USD decline even more since 2002. Hmmm again. As the dollar goes down, historically Gold goes up. For example, the USD has declined 35% since 2002; gold has risen 290%.
Right now the U.S. is the largest debtor nation in the world. It's a fact that as a debts and deficits continue to skyrocket, and they will, that downward pressure will continue.
At www.bluechipoptions.com we teach how we invest in Gold and other precious commodities.
The issue with debtor mentality, no matter how it occurs (idiocy like Bush, or "roll the dice on the whole game") like Obama, is that the USD loses value. And this means that we as Americans have to have something that is going up in value. There is always a bubble in some form, even in the worst of times.
Contrarians believe the U.S. Treasury bill is in effect the new greatest bubble we've created, on debt, and over time the populace (Joe the Trader) will begin to understand that a world currency, or that "something is going too right." We're building our next new bubble in U.S. Government bonds.
Remember, stocks do not always outperform bonds.
My point to this is with the vast increase we've seen in the markets recently, we've also seen our credit card companies increasing the cost of borrowing dramatically, and this will longer term cut back the credit card spender. The average American has over $8000 in revolving credit card debt, yet only 56% of Americans even have a credit card. There are many false facts I could find in researching average debt, but it took me to:
1. declining home equity debt availability
2. housing declines, despite all the happy stuff that "it's getting better", continue
3. when Americans want stuff they are going to have to actually pay for it.
So, with that, read this article, which even leads with my slimey friends Goldman Sachs, and how they may have helped lead our "economic recovery". Do not trust false facts.
http://www.bloomberg.com/apps/news?pid=20601087&sid=auGWGWlnohNo
__________
At opening the Sept 490C was available as the market dipped,as low as 1.95 and sold to 3.20 by 10.11 a.m. This is how fast a trade is taking place. The buyer had to put a buy below prior day close in, prior to opening,based on negative futures, and immediately sell at r1. Smart traders took new entry to our new buy put, the Sept 475 Put, which was bought at 9.50 to 10.50 on 9/1 and sold to 13.00 by 11.35 a.m. for two profitable sales before noon.
And, our Sept440 Put hit 6.50, also profitable,by 11.30 a.m.
All three signals were sold profitably before noon, as the market dropped 175 points.
By 12 noon the following had taken place:
1. Dow hit highs of 9598, after an opening dip that allowed a call buy, and sale within 45 minutes
2. Dow hit theoretical Lows of 9276 before 11.30 a.m., allowing both open puts to be profitable.
Consolidation took place, and may at this time, be all there is, before more upside. It's too soon to
tell, but it is a resilient market
And by the end of the sell off, we hit a 9252 theoretical Dow low, the Sept460P hit tops of 8.50, and the Sept475P hit tops of 16.80, both beyond our recommended top.
And to think for the smart, fast trader, calls were profitable too.
And the talking heads now are telling us how bad the economy is. It's so fun to watch. I have the ticket for 2012: Cheney/Palin. It could end the world, and we would not have to worry about anything :)
Tuesday, September 1, 2009
Negative Futures
Yesterday the market showed negative futures, and all the news was on China hitting a bear market, and a huge drop. Copper, oil and related commodities were the first to go, and we saw more world money moving into cash, the yen and Treasuries. Most of the overbought stocks are starting to slip, even AIG the wonder slime stock that people are now wondering is overvalued :)
VIX is a lagging, NOT leading indicator, but as we we see VIX rise more FEAR will enter the market. All the talking heads Monday seemed to have taken a "fear pill" over the weekend, and the TV money shows were babbling about the depth of the downturn in September. My neck would twist as I took an hour of this in today, for the pure entertainment of the "position taking."
We recalculated the Dow and twitted out at 10 am., and the market spent most of the day trying to approach the new s1, and even tried for r1, struggling but staying below the pivot point all through the normal 2.30 p.m. whipsaw, preceding 3.00 to 4.15 p.m. EST that I now consider simply a free for all of guessing.
The first trading day in September the S & P was up for 5 straight years 2003-2007, but lost 4.2% in 2002.
Shawn Adams once said, "The CROWD is always wrong at market turning points, but often times right once a trend has set in. The reason many market fighters go broke is they believe the CROWD is always wrong.
There is nothing further from the truth. Unless volatility is extremely low or very high one should think twice before betting against the CROWD."
It also appears retail is losing its luster with institutional investors. Hmmm. What might they know?
http://www.bloomberg.com/apps/news?pid=20601103&sid=a6mZZQ99ik80
Home equity loans are now hard to get. Duh. Credit cards, run by banks who lost their ass screwing us, and then we paid to stay in business, have a new game, and it will hit us big time: Millions Face Cuts In Credit Card Limits, Biggest Industry Shake-Up In 20 Years
Read carefully, you have Floydian prediction here: "lay a way" is back with a vengeance and becoming increasingly "the way to pay", as people will have much less credit.
VIX is a lagging, NOT leading indicator, but as we we see VIX rise more FEAR will enter the market. All the talking heads Monday seemed to have taken a "fear pill" over the weekend, and the TV money shows were babbling about the depth of the downturn in September. My neck would twist as I took an hour of this in today, for the pure entertainment of the "position taking."
We recalculated the Dow and twitted out at 10 am., and the market spent most of the day trying to approach the new s1, and even tried for r1, struggling but staying below the pivot point all through the normal 2.30 p.m. whipsaw, preceding 3.00 to 4.15 p.m. EST that I now consider simply a free for all of guessing.
The first trading day in September the S & P was up for 5 straight years 2003-2007, but lost 4.2% in 2002.
Shawn Adams once said, "The CROWD is always wrong at market turning points, but often times right once a trend has set in. The reason many market fighters go broke is they believe the CROWD is always wrong.
There is nothing further from the truth. Unless volatility is extremely low or very high one should think twice before betting against the CROWD."
It also appears retail is losing its luster with institutional investors. Hmmm. What might they know?
http://www.bloomberg.com/apps/news?pid=20601103&sid=a6mZZQ99ik80
Home equity loans are now hard to get. Duh. Credit cards, run by banks who lost their ass screwing us, and then we paid to stay in business, have a new game, and it will hit us big time: Millions Face Cuts In Credit Card Limits, Biggest Industry Shake-Up In 20 Years
Read carefully, you have Floydian prediction here: "lay a way" is back with a vengeance and becoming increasingly "the way to pay", as people will have much less credit.
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