Classic market movement that show the ranges of our Dow projections. The market immediately opened to the downside, with futures obviously showing downturn, and we hit a theoretical Dow of 10,146, a zone we've seen before. But the market began retreating from this support line, directly moved upward. Holders of our put sold at up to 4.40, good profits from 3.75, and only risk holders will hold.
By 4 p.m. the market had moved down only 56 points, pointing to a bias to the upside
We've profited well from the call this week also, and only risk holders still may hold an OTM call for a bounce.
Dow Projections is my homework this weekend. I think I'm beginning to see a trend.
Saturday, February 27, 2010
Thursday, February 25, 2010
As One Reflects...
By 10.45 a.m. our March525 Call had returned 40 cents per contract from opening buy, below prior day close, and had returned even more for traders that held this issue longer.
As one reflects on each move of the market this week in comparison to our Dow projections it's easy to see where the support and resistance really takes off, and the controls come in that stop the market. Any good news is immediately hit with bad news, such as consumer confidence yesterday. We have yet to see what impact Toyota will have overall on Japanese exports, but it will be ugly, and many of these cars are made right in the U.S.
We will not open the week with a new trade EXCEPT for any risk traders that choose to hold our April put for a longer time period, and that is so noted in our instructions.
The market spiked up before Bernanke delivers his semi-annual report on Monetary Policy to Congress. It has been typical for the market to massively whipsaw during this time period, and as we entered we saw the market begin to just hold steady.
Smart traders always know to have their sell orders in at all times, and that bid/ask are not part of your thinking, but what price you wish to pay and sell for.
As one reflects on each move of the market this week in comparison to our Dow projections it's easy to see where the support and resistance really takes off, and the controls come in that stop the market. Any good news is immediately hit with bad news, such as consumer confidence yesterday. We have yet to see what impact Toyota will have overall on Japanese exports, but it will be ugly, and many of these cars are made right in the U.S.
We will not open the week with a new trade EXCEPT for any risk traders that choose to hold our April put for a longer time period, and that is so noted in our instructions.
The market spiked up before Bernanke delivers his semi-annual report on Monetary Policy to Congress. It has been typical for the market to massively whipsaw during this time period, and as we entered we saw the market begin to just hold steady.
Smart traders always know to have their sell orders in at all times, and that bid/ask are not part of your thinking, but what price you wish to pay and sell for.
Wednesday, February 24, 2010
It's Almost Comical
It's almost comical. A market whipsaw every day. By early morning the market theoretical Dow low of 10,228 allowed our puts to advance and actually show a profit, but many traders will continue to hold this trade as a hedge for a deeper downside.
As always by 3 p.m. the plunge protection team entered in to soften the blow for a time, but we remain with our beginning of the week projections of vascillations around key support and resistance lines.
http://www.ft.com/cms/s/0/49639438-1b21-11df-953f-00144feab49a.html?nclick_check=1
Study our Dow projections very carefully and re-calculate S/R lines midday, and you'll see how we've been making money all week.
As always by 3 p.m. the plunge protection team entered in to soften the blow for a time, but we remain with our beginning of the week projections of vascillations around key support and resistance lines.
http://www.ft.com/cms/s/0/49639438-1b21-11df-953f-00144feab49a.html?nclick_check=1
Study our Dow projections very carefully and re-calculate S/R lines midday, and you'll see how we've been making money all week.
Tuesday, February 23, 2010
Durable Goods
February durable goods, January Home Sales, January durable Goods, and Michigan sentiment come out Tuesday through Friday respectively this week. We believe this is a week of potential "triggers" to the market.
We saw it yesterday with the first earnings reports out, but the market held until 1:15 p.m. at lows of 10,333 and highs of 10,473 on the theoretical Dow. Written, this sounds like a large whipsaw day when in reality the market flat lining until the early afternoon.
It will be a trigger that stimulates a short term bias. Following that bias, the reverse bias will then occur, all within a 586 range.
Nice fifty-sixty cent profits were possible on the March 525 call.
Floyd's opinion well stated in Time: http://www.time.com/time/politics/article/0,8599,1964778,00.html
We saw it yesterday with the first earnings reports out, but the market held until 1:15 p.m. at lows of 10,333 and highs of 10,473 on the theoretical Dow. Written, this sounds like a large whipsaw day when in reality the market flat lining until the early afternoon.
It will be a trigger that stimulates a short term bias. Following that bias, the reverse bias will then occur, all within a 586 range.
Nice fifty-sixty cent profits were possible on the March 525 call.
Floyd's opinion well stated in Time: http://www.time.com/time/politics/article/0,8599,1964778,00.html
Monday, February 22, 2010
Study Numbers
For risk call trades Friday here's what we alerted: "Pay to prior day close, following futures. Best buy at 13.10 or less.
Sell to Resistance levels same day." The position hit buy lows of 13.00 and sell highs of up to 15.50, same day. We continue to hold the hedge April put.
Let's study numbers:
The Dow hit 10,479 as a theoretical high Friday
The Dow hit 10,299 as a theoretical low Friday
The all important SPX has two strong resistance areas, 1076 and more importantly 1100, and the market closed up to 1109.
What is important is the study of our Dow projections to see next tops,and more importantly, what could be next bottoms, if the bears are right that we are approaching every kind of technical top imaginable.
From the whipsaw we have seen this past week I can honestly say that the market is both overbought and oversold.
And a bit from our Blue Chip Options commentary:
It is of interest that the market is overbought on the daily charts, but still oversold on the weekly charts.
Bulls would hope at market opening for a downside of no lower than 1076 on the SPX, and a rebound to 10,640 area.
Bears believe it is time to short the market.
The USD is gaining. This signals that the Federal Reserve may be closer to tightening monetary policy gave the dollar a renewed boost.
Add to this that U.S. economic data continues to outperform and real interest rates are shooting higher than Europe.
Now it is the Euro that shows levels of concern.
What you’ve read above is our real gauge on the market. To Floyd, unemployment at 10% is a natural reaction to the severe recession we’ve had and that our import ratios remain our own doing.
Sell to Resistance levels same day." The position hit buy lows of 13.00 and sell highs of up to 15.50, same day. We continue to hold the hedge April put.
Let's study numbers:
The Dow hit 10,479 as a theoretical high Friday
The Dow hit 10,299 as a theoretical low Friday
The all important SPX has two strong resistance areas, 1076 and more importantly 1100, and the market closed up to 1109.
What is important is the study of our Dow projections to see next tops,and more importantly, what could be next bottoms, if the bears are right that we are approaching every kind of technical top imaginable.
From the whipsaw we have seen this past week I can honestly say that the market is both overbought and oversold.
And a bit from our Blue Chip Options commentary:
It is of interest that the market is overbought on the daily charts, but still oversold on the weekly charts.
Bulls would hope at market opening for a downside of no lower than 1076 on the SPX, and a rebound to 10,640 area.
Bears believe it is time to short the market.
The USD is gaining. This signals that the Federal Reserve may be closer to tightening monetary policy gave the dollar a renewed boost.
Add to this that U.S. economic data continues to outperform and real interest rates are shooting higher than Europe.
Now it is the Euro that shows levels of concern.
What you’ve read above is our real gauge on the market. To Floyd, unemployment at 10% is a natural reaction to the severe recession we’ve had and that our import ratios remain our own doing.
Friday, February 19, 2010
What a Great Week
What a great week. We didn't have to wait long to buy the March 500 Call below prior day close, as low as 13.10, rising to highs of 15.00 for a nice same day profit.
We continue to hold our April hedge put, and will soon take our larger second buy, if the market does not turn.
Five years ago I began harping on how the banks were gaining too much power, and our dialogues were about Bubbles Greenspan (I hated him when he was our hero), and about Goldman Sachs.
It continues today: http://www.huffingtonpost.com/2010/02/17/greece-goldman-sachs-fool_n_465942.html
We believe all the indices are moving to divergence. 1100 is strong resistance on the SPX, and 1076 a strong secondary stop.
Chartists that see head and shoulders patterns lead that a downward spiral should soon begin as we hit these market tops. Friday showed strength in the final hour to life the OEX well above 505, and SPX above 1100.
It is of interest that the market is overbought on the daily charts, but still oversold on the weekly charts.
Bulls would hope at market opening for a downside of no lower than 1076 on the SPX, and a rebound to 10,640 area.
Bears believe it is time to short the market
We continue to hold our April hedge put, and will soon take our larger second buy, if the market does not turn.
Five years ago I began harping on how the banks were gaining too much power, and our dialogues were about Bubbles Greenspan (I hated him when he was our hero), and about Goldman Sachs.
It continues today: http://www.huffingtonpost.com/2010/02/17/greece-goldman-sachs-fool_n_465942.html
We believe all the indices are moving to divergence. 1100 is strong resistance on the SPX, and 1076 a strong secondary stop.
Chartists that see head and shoulders patterns lead that a downward spiral should soon begin as we hit these market tops. Friday showed strength in the final hour to life the OEX well above 505, and SPX above 1100.
It is of interest that the market is overbought on the daily charts, but still oversold on the weekly charts.
Bulls would hope at market opening for a downside of no lower than 1076 on the SPX, and a rebound to 10,640 area.
Bears believe it is time to short the market
Thursday, February 18, 2010
Stuck at Resistance
February expiration day, Dow down 7 of last 10
Read this carefully: http://www.ft.com/cms/s/0/49639438-1b21-11df-953f-00144feab49a.html
Wal-Mart reports today and it's predicted the Philly FED for February will notch up.
Many traders have asked recently about what "high frequency trading" is, and how it affects day and option trading.
If I call up my broker and say buy 100 shares of Alcoa, and the broker trades for himself before my order, that is illegal because he knows my order is there.
But slimey old Wall Street began using computers to find signals in the market, get in front of what they believe is going to happen, and relies on speed. Some of these participants (we're sure taught by Goldman Sachs) have been using ways to look at orders before anyone else can see them. This moves markets to extremes, what we have been seeing, occurs because skimming for fractions of pennies occurs, and false signals are thusly sent to the marketplace by confusing volume and liquidity, which are not the same.
As a cynic I believe the SEC (which I am the most cynical about) will enact laws to calm high frequency trading, but they will have enough loopholes to allow Goldman and the boys to find another way to "bet the world."
Futures by 8.52 a.m. yesterday had held steady for several hours at 35 to 45 points up, with housing starts (one of my favorite false and useless statistics) were better than projected. Thusly, traders could have paid up slightly to 13.60, but profits as of 2.00 pm were minimal. We do not list this position as open, as it was never available at prior day close, and we advised not to "chase."
This all was true because SPX 1100 is a huge resistance area as is 505 on the OEX. Watch the tops that occurred yesterday and compare carefully to our Dow projections listed below.
We are right on target.
But....we're now flat lining. "Stuck at resistance."
Read this carefully: http://www.ft.com/cms/s/0/49639438-1b21-11df-953f-00144feab49a.html
Wal-Mart reports today and it's predicted the Philly FED for February will notch up.
Many traders have asked recently about what "high frequency trading" is, and how it affects day and option trading.
If I call up my broker and say buy 100 shares of Alcoa, and the broker trades for himself before my order, that is illegal because he knows my order is there.
But slimey old Wall Street began using computers to find signals in the market, get in front of what they believe is going to happen, and relies on speed. Some of these participants (we're sure taught by Goldman Sachs) have been using ways to look at orders before anyone else can see them. This moves markets to extremes, what we have been seeing, occurs because skimming for fractions of pennies occurs, and false signals are thusly sent to the marketplace by confusing volume and liquidity, which are not the same.
As a cynic I believe the SEC (which I am the most cynical about) will enact laws to calm high frequency trading, but they will have enough loopholes to allow Goldman and the boys to find another way to "bet the world."
Futures by 8.52 a.m. yesterday had held steady for several hours at 35 to 45 points up, with housing starts (one of my favorite false and useless statistics) were better than projected. Thusly, traders could have paid up slightly to 13.60, but profits as of 2.00 pm were minimal. We do not list this position as open, as it was never available at prior day close, and we advised not to "chase."
This all was true because SPX 1100 is a huge resistance area as is 505 on the OEX. Watch the tops that occurred yesterday and compare carefully to our Dow projections listed below.
We are right on target.
But....we're now flat lining. "Stuck at resistance."
Wednesday, February 17, 2010
Ash Wednesday
Ash Wednesday
"The job of central banks: To take away the punch bowl just as the party is getting going." - William McChesney Martin (Federal Reserve Chairman, 1951 - 1970)
A clear definition of hypocrisy:
http://www.huffingtonpost.com/2010/02/12/medicare-cuts-hypocrisy-g_n_459930.html
The Fed release minutes from its meeting in January; housing starts are projected to jump 6% in January, after December's poor weather. It might be a blip but imagine housing starts for February.
Much real news took place yesterday with Simon Properties bidding 10 billion for commercial REITS gone bad, and JP Morgan Chase, Alcoa and Newmont all reporting.
Study our Dow projections very carefully, and remember to re-calulate the pivot point on any large moves (80 + or -)
Always have sell orders in.
We suggested two new signals for today. The first, the March 500 2010 call never hit prior close or lower, and was only profitable for those that traded "above market price." Those of you that know this technique could have had 34% returns.
Traders to the put were able to make a great first buy as low as 5.70.
Make specific note that SPX 1100 is strong resistance as is OEX 505
There may be more upside potential, but pay attention to the blocking area at SPX 1100. This will coincide with our Dow projection, and the SPX only hit highs of 1095.67 before settling back.
Both Dow and SPX resistance lines could also easily be broken as the market itself is trending back towards its 50 day moving average, a sign of recovery.
This may prompt risk takers to "follow futures" and "bet" a rising advance.
"The job of central banks: To take away the punch bowl just as the party is getting going." - William McChesney Martin (Federal Reserve Chairman, 1951 - 1970)
A clear definition of hypocrisy:
http://www.huffingtonpost.com/2010/02/12/medicare-cuts-hypocrisy-g_n_459930.html
The Fed release minutes from its meeting in January; housing starts are projected to jump 6% in January, after December's poor weather. It might be a blip but imagine housing starts for February.
Much real news took place yesterday with Simon Properties bidding 10 billion for commercial REITS gone bad, and JP Morgan Chase, Alcoa and Newmont all reporting.
Study our Dow projections very carefully, and remember to re-calulate the pivot point on any large moves (80 + or -)
Always have sell orders in.
We suggested two new signals for today. The first, the March 500 2010 call never hit prior close or lower, and was only profitable for those that traded "above market price." Those of you that know this technique could have had 34% returns.
Traders to the put were able to make a great first buy as low as 5.70.
Make specific note that SPX 1100 is strong resistance as is OEX 505
There may be more upside potential, but pay attention to the blocking area at SPX 1100. This will coincide with our Dow projection, and the SPX only hit highs of 1095.67 before settling back.
Both Dow and SPX resistance lines could also easily be broken as the market itself is trending back towards its 50 day moving average, a sign of recovery.
This may prompt risk takers to "follow futures" and "bet" a rising advance.
Follow Simple Rules
Monday before February expiration. Dow down 4 of last 5. 2009 Dow down 2.8%; Up 11 straight from 1994 to 2004. Ash Wednesday is tomorrow.
Last week we saw the market move from lows of 9850 to highs of 10,300. As you review our Dow projections note we believe we are still in the same Dow cycle.
Our projections list the lows and highs of last week. Profits were possible each day of the week on the massive whipsaws, and the light two way trades that occurred like clockwork as the market would struggle to make "good" of news, and interpret the woes of an island (Greece) that are making the EU think on how to "save" a country.
Mixed signals as to economic recovery vs. economic unemployment woes are woefully explained, and we as a people expect the impossible.
From Floydian logic, when there is a severe recession there are massive layoffs. All the credit given explodes. The economy implodes. Businesses are slow to rehire, as they cannot get credit, and fewer buy from them because they are not working. It is a circle that can only be broken by massive exuberance (we are far from this), easy money at low interest rates (how we got in this place), or time, as the recession slowly leads to inflation.
Thinking Obama is to blame for high unemployment is stupid. Of course the economy is to blame, and the economy will decide how it will react----the will of the people in the breathing of the market.
We saw a clear and severe near 10% drop as we hit Fibonnaci highs in the past two weeks, and whipsaw could continue, but longer term (two weeks) we are slightly bullish.
You will make money like you made last week with us if you :
1. study recalculations of pivot
2. follow simple rules, or don't trade
Last week we saw the market move from lows of 9850 to highs of 10,300. As you review our Dow projections note we believe we are still in the same Dow cycle.
Our projections list the lows and highs of last week. Profits were possible each day of the week on the massive whipsaws, and the light two way trades that occurred like clockwork as the market would struggle to make "good" of news, and interpret the woes of an island (Greece) that are making the EU think on how to "save" a country.
Mixed signals as to economic recovery vs. economic unemployment woes are woefully explained, and we as a people expect the impossible.
From Floydian logic, when there is a severe recession there are massive layoffs. All the credit given explodes. The economy implodes. Businesses are slow to rehire, as they cannot get credit, and fewer buy from them because they are not working. It is a circle that can only be broken by massive exuberance (we are far from this), easy money at low interest rates (how we got in this place), or time, as the recession slowly leads to inflation.
Thinking Obama is to blame for high unemployment is stupid. Of course the economy is to blame, and the economy will decide how it will react----the will of the people in the breathing of the market.
We saw a clear and severe near 10% drop as we hit Fibonnaci highs in the past two weeks, and whipsaw could continue, but longer term (two weeks) we are slightly bullish.
You will make money like you made last week with us if you :
1. study recalculations of pivot
2. follow simple rules, or don't trade
Friday, February 12, 2010
Day before Presidents’ Day Weekend, S&P down 15 of last 18. Off 11 in a row, 1992 to 2002.
Yesterday yet again opened perfectly for our OEX moves. Futures were slightly down, and we took entry at best buy on the option we are falling in love with, the February 2010 490 Call. Best buy means buying below prior day close, typically 15 to 22%, but at times even more if there is a strong gap.
Traders were able to take entry as low as 6.00 and sell to 10.50 by 2 p.m. We received a number of testimonials on buying in the 7 range and selling in the 9 dollar range, for extraordinary profits.
So what caused it? Nothing. To Floyd, we are merely in a mathematical cycle and it appears that events will trigger movements, but the action, or the cause and effect, were already in place.
We are seeing a struggle upward now, with numerous resistance areas, and more hesitancy for burst out days because 1 in every 4 American home mortgage holders owe more on their home than the value.
Two years ago friends and I would have great discussions over the ethics on defaulting on your obligations; these same friends now discuss with me that taking from the banks is justice.
And my next question, of home ownership, the rock of our country. Why have we encouraged people to put all their savings in one asset?
Is 1892 a bit different than 2010, when the value of home ownership had different meaning. Home ownership has been branded as the ultimate fulfillment of the American dream.
This ignores the true American dream: upward mobility for us and our own children.
And my last question "what if unemployment in the U.S. were 15% forever?" brought some great responses for your review. And remember, there is a lesson in here somewhere.
> 1. Q: What if unemployment in the U.S. was always 10 of 15% What would the country be like?
>
> A: France
From JK
i think a better place to live. the poor and middle class would revolt and the country would be in more turmoil
From SAC
Of interest, I have wondered if when the true rate of unemployment is 20% plus, which I think will occur in the next two years (and not of any part of Obama), that there will be a change of consciousness in this nation and worldwide.
From JWE
Yesterday yet again opened perfectly for our OEX moves. Futures were slightly down, and we took entry at best buy on the option we are falling in love with, the February 2010 490 Call. Best buy means buying below prior day close, typically 15 to 22%, but at times even more if there is a strong gap.
Traders were able to take entry as low as 6.00 and sell to 10.50 by 2 p.m. We received a number of testimonials on buying in the 7 range and selling in the 9 dollar range, for extraordinary profits.
So what caused it? Nothing. To Floyd, we are merely in a mathematical cycle and it appears that events will trigger movements, but the action, or the cause and effect, were already in place.
We are seeing a struggle upward now, with numerous resistance areas, and more hesitancy for burst out days because 1 in every 4 American home mortgage holders owe more on their home than the value.
Two years ago friends and I would have great discussions over the ethics on defaulting on your obligations; these same friends now discuss with me that taking from the banks is justice.
And my next question, of home ownership, the rock of our country. Why have we encouraged people to put all their savings in one asset?
Is 1892 a bit different than 2010, when the value of home ownership had different meaning. Home ownership has been branded as the ultimate fulfillment of the American dream.
This ignores the true American dream: upward mobility for us and our own children.
And my last question "what if unemployment in the U.S. were 15% forever?" brought some great responses for your review. And remember, there is a lesson in here somewhere.
> 1. Q: What if unemployment in the U.S. was always 10 of 15% What would the country be like?
>
> A: France
From JK
i think a better place to live. the poor and middle class would revolt and the country would be in more turmoil
From SAC
Of interest, I have wondered if when the true rate of unemployment is 20% plus, which I think will occur in the next two years (and not of any part of Obama), that there will be a change of consciousness in this nation and worldwide.
From JWE
Thursday, February 11, 2010
A Little Island Affects the World
Futures fluctuated, and it was easy to gain entry entry to the February 2010 490 Call. This was yet again another "perfect example of a trade." We recommended buying it at 15% below prior day close, or lower. It was available as low as 6.20. Top sells by 1:30 p.m. were possible at up to 8.50, for a nice positive 40% return.
The Dow appears entrenched in 9950 to 10,050 and runs up and below it, pending "news" or trigger. Suddenly the value of the USD is affecting (cause and effect) commodities, export, fear in the EU about Greece, and a general unfolding with the EU that they may not make it, and will be bailed out by the stronger nations, such as Germany.
Such a little island, Greece, to affect world economies.
How fragile a world we live in.
I'll pose a question: What if unemployment in the U.S. was always 10 of 15% What would the country be like?
"Tell me and I'll forget; show me and I may remember; involve me and I'll understand." - Confucius
The Dow appears entrenched in 9950 to 10,050 and runs up and below it, pending "news" or trigger. Suddenly the value of the USD is affecting (cause and effect) commodities, export, fear in the EU about Greece, and a general unfolding with the EU that they may not make it, and will be bailed out by the stronger nations, such as Germany.
Such a little island, Greece, to affect world economies.
How fragile a world we live in.
I'll pose a question: What if unemployment in the U.S. was always 10 of 15% What would the country be like?
"Tell me and I'll forget; show me and I may remember; involve me and I'll understand." - Confucius
Wednesday, February 10, 2010
Mad As Hellers
"When a country lives on borrowed time, borrowed money and borrowed energy, it is just begging the markets to discipline it in their own way at their own time. Usually the markets do it in an orderly way - except when they don't." - Thomas L. Friedman
The market did what we expected yesterday. Futures were dramatically up from 4 a.m. on and the market opened to a theoretical Dow top of 10,083, or 1.32% by 10 a.m.
The February 490 Call, bought Monday, hit highs of $9.00 by 11.30 am., for a call that cost us between 6.30 and 7.40. Better still, this call had hit $9.40, and those following support and resistance were madly recalculating for the day. As the market approached 190 points up we sent a second twitter, recalculating Dow tops. Nice two day profits, both put and call.
And what's next? More whipsaw. More confusion. More argument between bull and bear.
Yesterday was aggressive in both the volatility of the whipsaw, and in the struggles just above 10,050 to 10,100.
When the market moves over 100 points up in a day and holds, it is a good sign the bias is changing upward, while it takes a 230 to 250 point drop that holds to show a true correction.
Yesterday needs follow through to show a bull bias. Option trading has become much faster and more "extreme" in the depth numbers wlll go. Two years ago 190 point climb would have been euphoria in the news. Today, it's wait and see if the market does it "again." It is as if: no one believes.
From subscriber MP: And what or who am I angry with and how does it effect my trading? Great question...
"I've been wrestling with this one for months now...and here is my quick conclusion...
I'm very angry at myself for consistently demonstrating a lack of self-control. This is evident in me being over-weight and unable to control my eating patterns. I'm angry that I've gained 25 lbs. over the last 2-3 years so I eat more crap b/c it makes me feel better (temporarily)...but this just causes me to gain more weight which perpetuates the cycle...
This self-condemnation and mild depression (anger turned inward) is also evident in what I call grudge trading...this where I would take trades out of anger to try and get my money back or make myself feel better by winning (like a gambler)...
what I'm learning is how to love myself for who I am...release destructive emotions like fear and greed, accept responsibility for my decisions and just stick to a trading plan...why I do those things - I'm successful.
"But to answer your question - anger towards yourself or anyone for that matter can easily distract you and cause a trader to make unnecessary gambles...which will just make him or her even angrier! "
Today we study whether the U.S. Trade deficit is widening, the budget deficit is narrowing, and Bernanke testifies about unwinding emergency Fed liquidity program.
Tomorrow we'll watch for retail sales and initial jobless claims, which routed the market last week, are released.
And I give you one thought about Obama (or whomever carries the torch) and our economy:
We all know our long term debt to GDP ratio is high now, whether in terms like this, or "you can't just borrow this much." But it worsens, as there are many other debts from past administrations that come due now. And we all know, really, that the President now has two wars, and nothing is right. No one can say what they would do in the position, it's all talk or games, but we've added a third group, called the "Mad as Hellers." These folks know they are being phucked by Wall Street, and the government can't get past itself to regulate it, and we repeat the same action, reward and risk.
These Mad as Hellers want government to slow down. They blame the government, when in fact it may be the economy that affects (remember: cause and effect) and they are mad that there are not jobs, and that taxes could go up. This is the "maligned" the "common man" and we see it in the market.
An excerpt from our Blue Chip Options advisory service:
Materials were yesterday's big movers, and we're strong in this sector. Many stocks held their 200 day moving average, which suggests a short term bottom; if the rally were to increase we'd see the next resistance at the 50 day moving average.
The market did what we expected yesterday. Futures were dramatically up from 4 a.m. on and the market opened to a theoretical Dow top of 10,083, or 1.32% by 10 a.m.
The February 490 Call, bought Monday, hit highs of $9.00 by 11.30 am., for a call that cost us between 6.30 and 7.40. Better still, this call had hit $9.40, and those following support and resistance were madly recalculating for the day. As the market approached 190 points up we sent a second twitter, recalculating Dow tops. Nice two day profits, both put and call.
And what's next? More whipsaw. More confusion. More argument between bull and bear.
Yesterday was aggressive in both the volatility of the whipsaw, and in the struggles just above 10,050 to 10,100.
When the market moves over 100 points up in a day and holds, it is a good sign the bias is changing upward, while it takes a 230 to 250 point drop that holds to show a true correction.
Yesterday needs follow through to show a bull bias. Option trading has become much faster and more "extreme" in the depth numbers wlll go. Two years ago 190 point climb would have been euphoria in the news. Today, it's wait and see if the market does it "again." It is as if: no one believes.
From subscriber MP: And what or who am I angry with and how does it effect my trading? Great question...
"I've been wrestling with this one for months now...and here is my quick conclusion...
I'm very angry at myself for consistently demonstrating a lack of self-control. This is evident in me being over-weight and unable to control my eating patterns. I'm angry that I've gained 25 lbs. over the last 2-3 years so I eat more crap b/c it makes me feel better (temporarily)...but this just causes me to gain more weight which perpetuates the cycle...
This self-condemnation and mild depression (anger turned inward) is also evident in what I call grudge trading...this where I would take trades out of anger to try and get my money back or make myself feel better by winning (like a gambler)...
what I'm learning is how to love myself for who I am...release destructive emotions like fear and greed, accept responsibility for my decisions and just stick to a trading plan...why I do those things - I'm successful.
"But to answer your question - anger towards yourself or anyone for that matter can easily distract you and cause a trader to make unnecessary gambles...which will just make him or her even angrier! "
Today we study whether the U.S. Trade deficit is widening, the budget deficit is narrowing, and Bernanke testifies about unwinding emergency Fed liquidity program.
Tomorrow we'll watch for retail sales and initial jobless claims, which routed the market last week, are released.
And I give you one thought about Obama (or whomever carries the torch) and our economy:
We all know our long term debt to GDP ratio is high now, whether in terms like this, or "you can't just borrow this much." But it worsens, as there are many other debts from past administrations that come due now. And we all know, really, that the President now has two wars, and nothing is right. No one can say what they would do in the position, it's all talk or games, but we've added a third group, called the "Mad as Hellers." These folks know they are being phucked by Wall Street, and the government can't get past itself to regulate it, and we repeat the same action, reward and risk.
These Mad as Hellers want government to slow down. They blame the government, when in fact it may be the economy that affects (remember: cause and effect) and they are mad that there are not jobs, and that taxes could go up. This is the "maligned" the "common man" and we see it in the market.
An excerpt from our Blue Chip Options advisory service:
Materials were yesterday's big movers, and we're strong in this sector. Many stocks held their 200 day moving average, which suggests a short term bottom; if the rally were to increase we'd see the next resistance at the 50 day moving average.
Tuesday, February 9, 2010
Who Are You Angry With
From market movements yesterday we saw theoretical highs of 10,078, and by 3.15 lows of 9914. As you review our Dow projections you should see the pattern.
There are patterns: the USD looks overbought, and Gold seems tied to the dollar. Chartists see and ABC correction for GLD. Oil flirted with support lines. Something needs to break.
Study the market to know how it breathes. Know what intelligent people, and what the masses, are thinking.
Here's an example of intelligence:
http://www.time.com/time/nation/article/0,8599,1959029,00.html
Who does he influence?
Does Goldman really run the country?
http://www.huffingtonpost.com/2010/02/06/goldman-sachs-helped-push_n_452257.html
Who are you angry with? How could that be affecting your trading?
Do any of us, from Tea Partiers, to liberals, to conservatives, understand that our own government has frozen itself in paralysis, with Obama's left being trampled by a plan by the GOP systematically, we accomplish nothing again?
And if the Tea Partiers took over the country, like the Obama "change agents" that voted, will they too see their leaders caught up in a Washington insider circle of greed, that many do not even know how this FUBAR (key words) that is the Washington monster it appears really that no one wins, and no one can ever agree to even work together.
There are patterns: the USD looks overbought, and Gold seems tied to the dollar. Chartists see and ABC correction for GLD. Oil flirted with support lines. Something needs to break.
Study the market to know how it breathes. Know what intelligent people, and what the masses, are thinking.
Here's an example of intelligence:
http://www.time.com/time/nation/article/0,8599,1959029,00.html
Who does he influence?
Does Goldman really run the country?
http://www.huffingtonpost.com/2010/02/06/goldman-sachs-helped-push_n_452257.html
Who are you angry with? How could that be affecting your trading?
Do any of us, from Tea Partiers, to liberals, to conservatives, understand that our own government has frozen itself in paralysis, with Obama's left being trampled by a plan by the GOP systematically, we accomplish nothing again?
And if the Tea Partiers took over the country, like the Obama "change agents" that voted, will they too see their leaders caught up in a Washington insider circle of greed, that many do not even know how this FUBAR (key words) that is the Washington monster it appears really that no one wins, and no one can ever agree to even work together.
Monday, February 8, 2010
A Pent Up Consolidation Continued to Erupt
Friday showed how VIX, and the complacency the market had felt, was far from true; instead, a pent up consolidation continued to erupt.
The market hit theoretical Dow lows Friday of 9797, only to close at 10,012, or 10,042 on the theoretical. For months Floyd has provided projections, and discussed what is called a Fibonnacci retracement. This ancient mathematician used his numerology analysis to predict that from the "lowest low" of something it will rise 38 and then 63%. The market did just that and we predicted hesitancy and confusion at 10,746. We've been doing so for months. As the market reached this, and a slight step above it, we began to see the faltering. Fibonnaci and chartists typically see a 10 to 20% pullback from the new 63% highest high. This would put the Dow at 9671. Friday we came very close to this bottom before ending the day above the, psychologically important, 10,000 mark.
Pay very careful attention to our new Dow projections. Many of our traders have made great bucks this last week just following support/resistance lines and our Dow projections.
So, what's next? Was this a good and healthy consolidation from a market that moved up too quickly, or is this the U.S. economy being noted globally for not having the resiliency or strength, and that our debt will overtake us?
Being one what trusts and believes almost nothing, I make note that the arctic ice melt is to cost 2.4 trillion. Of course many with IQ'x of 40 or more actually believe there is no global warming.
These were the folks that voted for Bush the second time :)
If the arctic ice melt can cost 2.4 trillion, where does this come from. If the Euro is now losing value, the USD gaining value, and Gold and Oil losing value, what do you make of it?
I know oil will run from 60.00 to 100.00 a barrel, and run in cycles.
I know the USD is really worthless shit, completely made up of debt and promises
I know that the Euro will not make it over the long run, and discussions of world currency will circulate again..
I know these things as opinions, of course, that you are paying for as you project the market short term. So, here is what I know about a 10 vs. a 20% correction. If the market continues to correct, and passes below 9500 we suggest that the country will be ripe for another, even larger stimulus plan, increasing our debt further, and that Congress will pass it. This will occur as we hit 20% lows.
If the market holds near where we bottomed on Friday and holds steady, or shows slight increases, then 2010 will continue in the same slight whipsaw, light increase, decrease, and a lucky year end of 2-5% above prior year, if we're lucky.
It's a trying time. We will lead with a call, on the optimistic side that we may now trigger a short term upside, but pay attention to futures carefully. We think the Friday upside reversal may give way to an oversold bounce.
However, if one reviews the NYSE Bullish Percent Index it's easy to see how my comments above show a turbulent year and no quick recoveries.
The market hit theoretical Dow lows Friday of 9797, only to close at 10,012, or 10,042 on the theoretical. For months Floyd has provided projections, and discussed what is called a Fibonnacci retracement. This ancient mathematician used his numerology analysis to predict that from the "lowest low" of something it will rise 38 and then 63%. The market did just that and we predicted hesitancy and confusion at 10,746. We've been doing so for months. As the market reached this, and a slight step above it, we began to see the faltering. Fibonnaci and chartists typically see a 10 to 20% pullback from the new 63% highest high. This would put the Dow at 9671. Friday we came very close to this bottom before ending the day above the, psychologically important, 10,000 mark.
Pay very careful attention to our new Dow projections. Many of our traders have made great bucks this last week just following support/resistance lines and our Dow projections.
So, what's next? Was this a good and healthy consolidation from a market that moved up too quickly, or is this the U.S. economy being noted globally for not having the resiliency or strength, and that our debt will overtake us?
Being one what trusts and believes almost nothing, I make note that the arctic ice melt is to cost 2.4 trillion. Of course many with IQ'x of 40 or more actually believe there is no global warming.
These were the folks that voted for Bush the second time :)
If the arctic ice melt can cost 2.4 trillion, where does this come from. If the Euro is now losing value, the USD gaining value, and Gold and Oil losing value, what do you make of it?
I know oil will run from 60.00 to 100.00 a barrel, and run in cycles.
I know the USD is really worthless shit, completely made up of debt and promises
I know that the Euro will not make it over the long run, and discussions of world currency will circulate again..
I know these things as opinions, of course, that you are paying for as you project the market short term. So, here is what I know about a 10 vs. a 20% correction. If the market continues to correct, and passes below 9500 we suggest that the country will be ripe for another, even larger stimulus plan, increasing our debt further, and that Congress will pass it. This will occur as we hit 20% lows.
If the market holds near where we bottomed on Friday and holds steady, or shows slight increases, then 2010 will continue in the same slight whipsaw, light increase, decrease, and a lucky year end of 2-5% above prior year, if we're lucky.
It's a trying time. We will lead with a call, on the optimistic side that we may now trigger a short term upside, but pay attention to futures carefully. We think the Friday upside reversal may give way to an oversold bounce.
However, if one reviews the NYSE Bullish Percent Index it's easy to see how my comments above show a turbulent year and no quick recoveries.
Friday, February 5, 2010
Become More Humble as the Market Goes Your Way
"Become more humble as the market goes your way." - Bernard Baruch
Job reports out today, which should hold at 10%, and non farm payrolls also reported; both of these can act as "triggers" in the market.....and did they. By 10.17 p.m. the market had dropped 176 points, to a theoretical Dow low of 10,043. We twitted new support and resistance lines and sent them out. Our long out of the money hedge to the OEX Feb 465 Put rose to 2.20 by 10.30 a.m.
We held three days, bought twice, and had a 100% plus return, for another great profit this week. Again, we bought at $1.10, and sold to 2.36 for a doubling by noon.
The market is very very fearful, even if VIX shows complacency. It's why I see it as a lagging signal, showing the validity to us of the public mood, but never reflecting where support and resistance "kick in." We saw it at 10,746, what we projected as the Fibonnacci top, and the slight move above it, before a drop now to just above 10,000. We've hit almost an 8% correction since the beginning of the year, not a good sign for the market, some say, in 2010. By 1 p.m. the theoretical Dow had fallen below 10,000 and we were approaching the 240 drop that we believe confirms a true bear bias.
We will issue a higher risk trade call for possible retracement, but remain watchful that the market may have another 3 to 5% to truly drop and shock us, with a true 10% plus correction.
Job reports out today, which should hold at 10%, and non farm payrolls also reported; both of these can act as "triggers" in the market.....and did they. By 10.17 p.m. the market had dropped 176 points, to a theoretical Dow low of 10,043. We twitted new support and resistance lines and sent them out. Our long out of the money hedge to the OEX Feb 465 Put rose to 2.20 by 10.30 a.m.
We held three days, bought twice, and had a 100% plus return, for another great profit this week. Again, we bought at $1.10, and sold to 2.36 for a doubling by noon.
The market is very very fearful, even if VIX shows complacency. It's why I see it as a lagging signal, showing the validity to us of the public mood, but never reflecting where support and resistance "kick in." We saw it at 10,746, what we projected as the Fibonnacci top, and the slight move above it, before a drop now to just above 10,000. We've hit almost an 8% correction since the beginning of the year, not a good sign for the market, some say, in 2010. By 1 p.m. the theoretical Dow had fallen below 10,000 and we were approaching the 240 drop that we believe confirms a true bear bias.
We will issue a higher risk trade call for possible retracement, but remain watchful that the market may have another 3 to 5% to truly drop and shock us, with a true 10% plus correction.
Thursday, February 4, 2010
Elevated Fear Gage
The stock market's fear gauge, VIX, has been elevated in recent days, as stocks bounce around in a series of noteworthy moves. But it appears some traders are preparing for mellower days. The WSJ announced a trade yesterday, one of the largest of the day, one investor bought heavily on put options on VIX. This was a very very large bet. In the meantime the market maneuvered well for us. We showed several Advanced Mentoring students today exactly how we traded, and many others did, as the volatility was perfect for a fast profit to the call.
1. Futures we watched pre-market and were "mixed." I placed an order for 7.00, one dollar less than prior day close. I could have held for 6.25, the 33% low, but felt the market might turn.
2. I immediately placed an order to sell, at a limit, for the day at 8.00, and sold within 30 minutes.
3. Many traders reported doing this with ITM February issues also, as it is not the option that is the signal but the count or bias that is.
Remember, I day traded that call, but it's still to some (that are not day trading) an open position.
Learning to trade well with us is to recognize we offer a variety of methods around the same system for all types of traders from our brokers, to individual investors.
"If the trader has a negative view on the market he may be short equities and may be using these contracts to protect himself against a slow market rebound."
The downside has not been proven. We'll list a call for the euphoric that see a rise to 10,400
"Whatever method you use to pick stocks...., your ultimate success or failure will depend on your ability to ignore the worries of the world so long enough to allow your investments to succeed. It isn't the head but the stomach that determines the fate of the stockpicker." - Peter Lynch
1. Futures we watched pre-market and were "mixed." I placed an order for 7.00, one dollar less than prior day close. I could have held for 6.25, the 33% low, but felt the market might turn.
2. I immediately placed an order to sell, at a limit, for the day at 8.00, and sold within 30 minutes.
3. Many traders reported doing this with ITM February issues also, as it is not the option that is the signal but the count or bias that is.
Remember, I day traded that call, but it's still to some (that are not day trading) an open position.
Learning to trade well with us is to recognize we offer a variety of methods around the same system for all types of traders from our brokers, to individual investors.
"If the trader has a negative view on the market he may be short equities and may be using these contracts to protect himself against a slow market rebound."
The downside has not been proven. We'll list a call for the euphoric that see a rise to 10,400
"Whatever method you use to pick stocks...., your ultimate success or failure will depend on your ability to ignore the worries of the world so long enough to allow your investments to succeed. It isn't the head but the stomach that determines the fate of the stockpicker." - Peter Lynch
Wednesday, February 3, 2010
Bulls Pull the Market
"I never buy at the bottom and I always sell too soon" - Baron Nathan Rothchild's success formula
Automakers report results today. Geithner and Volcker both testify and speak. Tomorrow we have the ISM non manufacturing index report, which Barclays thinks went into positive territory in January. This could trigger movement. We saw the bulls pull the market right back in whipsaw yesterday. Call profits were simply extraordinary!!
-OEB100220C505 FEB 2010 505.0000 CALL was available as low as 5.76, just below prior day close, and hit highs of 8.35 by 2.00 p.m. Many traders reported getting in at prior day close and selling to 7.50 up.
This leaves us with an open and losing hedge put which we'll hold, as each resistance line we cross. This is a very OTM issue that could surprise us with upside potential, and allows us to lock call profits. Volatility is slightly increasing. Calls are now higher risk, as the bias has shifted, but in whipsaw.
The market stayed above SPX 1100, a strong resistance area, and held above 500 and then 505, key support areas.
Automakers report results today. Geithner and Volcker both testify and speak. Tomorrow we have the ISM non manufacturing index report, which Barclays thinks went into positive territory in January. This could trigger movement. We saw the bulls pull the market right back in whipsaw yesterday. Call profits were simply extraordinary!!
-OEB100220C505 FEB 2010 505.0000 CALL was available as low as 5.76, just below prior day close, and hit highs of 8.35 by 2.00 p.m. Many traders reported getting in at prior day close and selling to 7.50 up.
This leaves us with an open and losing hedge put which we'll hold, as each resistance line we cross. This is a very OTM issue that could surprise us with upside potential, and allows us to lock call profits. Volatility is slightly increasing. Calls are now higher risk, as the bias has shifted, but in whipsaw.
The market stayed above SPX 1100, a strong resistance area, and held above 500 and then 505, key support areas.
Tuesday, February 2, 2010
Dollar Hits Five Month High
ADP shows its January payroll survey, often more accurate than our unemployment reporting :)
Chartists tell us: DOLLAR INDEX HITS FIVE MONTH HIGH ($USD,$FXE) - GOLD FINDS SUPPORT AT 1080 ($GOLD,GLD) - OIL HITS POTENTIAL SUPPORT ($WTIC) - BONDS HIT RESISTANCE ZONE ($USB)
The market by noon yesterday had hit tops of 10,228. Our new recommendation to the call -OEB100220C505 FEB 2010 505.0000 CALL was profitable to .80, but very difficult to trade.
We'll treat it as an open signal. Contrarians took much easier entry to the put, which could be an interesting move if yesterday's move was an "exhaustive gap" and more downside is to come. Remember we have already suffered a 700 point drop, right at our Fibonacci top at 10,746.
We note that the OEX cannot penetrate several strong resistance areas, and struggles at 500.
The market is obviously oversold, but we suggest our rally will be brief, and that more downside, below 9950, increases despite upside.
The CEO of Goldman Sachs is going to pay himself 100 million a year, a direct snub to our government. It has become so imbedded with greed, the entire system, that it may be possible to realize we have hit "incomplete incompetency."
"Today we deal with 65,000 more pieces of information each day than our ancestors did 100 years ago." – Anonymous
Chartists tell us: DOLLAR INDEX HITS FIVE MONTH HIGH ($USD,$FXE) - GOLD FINDS SUPPORT AT 1080 ($GOLD,GLD) - OIL HITS POTENTIAL SUPPORT ($WTIC) - BONDS HIT RESISTANCE ZONE ($USB)
The market by noon yesterday had hit tops of 10,228. Our new recommendation to the call -OEB100220C505 FEB 2010 505.0000 CALL was profitable to .80, but very difficult to trade.
We'll treat it as an open signal. Contrarians took much easier entry to the put, which could be an interesting move if yesterday's move was an "exhaustive gap" and more downside is to come. Remember we have already suffered a 700 point drop, right at our Fibonacci top at 10,746.
We note that the OEX cannot penetrate several strong resistance areas, and struggles at 500.
The market is obviously oversold, but we suggest our rally will be brief, and that more downside, below 9950, increases despite upside.
The CEO of Goldman Sachs is going to pay himself 100 million a year, a direct snub to our government. It has become so imbedded with greed, the entire system, that it may be possible to realize we have hit "incomplete incompetency."
"Today we deal with 65,000 more pieces of information each day than our ancestors did 100 years ago." – Anonymous
Monday, February 1, 2010
Sectors Are Shifting
First day trading in February, 2009 broke 6-year Dow and S&P winning streak. NASDAQ’s 5 year win streak remains intact.
Both the Dow and the OEX bullish % remain above 50%. Support seems be holding a bit for the S&P500, and our new Dow projections below outline what could happen. A 10% correction from our recent highs leaves the market right back at the 9750 bottom tests that have occurred before.
Sectors are shifting. This means some "sectors" will now decline, while others increase. We've certainly learned in recent days just how important technology is.
It was most interesting in the whirlwind tight whipsaw Friday to see -OEB100220C505 FEB 2010 505.0000 CALL hit highs of 8.10 and lows of 4.30. It was possible for up to $1.00 per contract day trade profits at least three times on Friday.
Both the Dow and the OEX bullish % remain above 50%. Support seems be holding a bit for the S&P500, and our new Dow projections below outline what could happen. A 10% correction from our recent highs leaves the market right back at the 9750 bottom tests that have occurred before.
Sectors are shifting. This means some "sectors" will now decline, while others increase. We've certainly learned in recent days just how important technology is.
It was most interesting in the whirlwind tight whipsaw Friday to see -OEB100220C505 FEB 2010 505.0000 CALL hit highs of 8.10 and lows of 4.30. It was possible for up to $1.00 per contract day trade profits at least three times on Friday.
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