The Dow may hit and hold at 11,000, and may go above it (see Dow projections), but all 0000's are a psychological anchor point that often is followed by a drop. Couple this with a market that has been going up far too long without consolidation, and bears see a downside turn.
At the same time this week begins earnings reports, and we believe the first quarter will look good for a number of companies, which could bolster the market up.
Floyd's bet: Good earnings will bolster the market to as high as 11,176. Any bad earnings could take the market to consolidation of 3%, or near 10,841.
We will move to May issues this week, and provide another "version" of the OEX daily alert that we are trying. We welcome your feedback.
Monday, April 12, 2010
Friday, April 9, 2010
The Best Month for the Dow
April is the best month for the Dow, average 1.9% gain since 1950. 3rd best month for S&P, 4th best for NASDAQ.
Two way trades were possible today. The market held up after over a 100 point theoretical low, and ended the day up.
Thanks for trying a part of our new format this week.
1. Our goal is to give you just enough information to make your experience reading our alerts consummate with your experience, or you merely "link" to areas of our website to help you develop those skills.
2. Our attempt to not "show a signal," but "show a method" is very effective. The trader is either long or short, and if day trading using minute or 5 minute PNF charts, or following our standard rules of the market.
3. I learned the market studying Richard D. Wyckoff. There is only supply and demand, and then cause and effect. That is the stock market. And that is economy.
Two way trades were possible today. The market held up after over a 100 point theoretical low, and ended the day up.
Thanks for trying a part of our new format this week.
1. Our goal is to give you just enough information to make your experience reading our alerts consummate with your experience, or you merely "link" to areas of our website to help you develop those skills.
2. Our attempt to not "show a signal," but "show a method" is very effective. The trader is either long or short, and if day trading using minute or 5 minute PNF charts, or following our standard rules of the market.
3. I learned the market studying Richard D. Wyckoff. There is only supply and demand, and then cause and effect. That is the stock market. And that is economy.
Thursday, April 8, 2010
An Experiment
"Every time everyone's talking about something, that's the time to sell." - George Lindermann
This past week has been an experiment in our OEX templates, as we are continuing to change and improve both of our websites
In the meantime we've tried to provide "bias and count" for 45days, and long or short. We'll be back to regular format on Monday, but wanted to experiment with how fast traders can find that it is not the signal itself that is so important, but in how one anticipates the action of the market, or the bias, the count, the "edge." If we understand the bell curve count we know and have better odds. You'll continue to see us experiment with the best format to provide you the most valuable information.
What we tried to show this week is that regardless of OTM or ATM options if the volume is high enough and the bid/ask is being "played" by others, it is a time to make money.
For day traders, in tight increments. For longer term (3 or 4 day) traders by holding through whipsaw, and taking a second buy only if we see the bias may be shifting.
I study to see only the pivot, and the support and resistance lines. If the market moves by 75- 100 points I recalculate the pivot and support and resistance lines and I buy and sell around these lines.
__________________________
More from our BCO Commentary:
228 stocks on average reached new 52-week intraday highs each day during this last quarter.
· Bullish? Birinyi Associates as top analysts see a 1325 S&P top, which would “translate to a multiple of 17 on the 2010 consensus, neither cheap or extraordinary.” He could be right. Some likely give back would be good, leading to more of a bullish run in 2010.
· The bottom line is that job growth momentum is improving. John Hermann at State Street says “by the third quarter, profits will be at a new all-time record high. That is a plus for the jobs outlook.”
· It’s taken a year, as the market began performing, for corporate profits to begin to catch up. Early last year the corporate profits were made because of the vast reductions in staff. This was a V shape bottom in the stock market; and we are seeing a V shaped chart building in the development of earnings.
· We assume that the first quarter earnings are going to be good, and that this will buoy the market; however, we also believe analysts will be watching and listening to the “tone and comments” of future earnings.
· They will be doing so because the great fear of a W, or a “double dip,” the fear of a return to 9750, will lessen if job growth, higher earnings, and capital spending.
· We’ll see financials again gaining, this time 194% for the quarter. But again, this has a false fact within it, as the value for quarterly earnings in the financial sector was 50 to 60 billion three years ago, will be 20.1 billion this year, and was 6.9 billion the first quarter of last year. We are seeing steady improvement.
· Earnings lead to business spending, which leads to hiring, which leads to consumer spending. The cycle may be returning. Typically 60% of companies beat estimates, so there’s a good chance, analysts think, that we’ll hit 35 to 36% earnings growth.
This past week has been an experiment in our OEX templates, as we are continuing to change and improve both of our websites
In the meantime we've tried to provide "bias and count" for 45days, and long or short. We'll be back to regular format on Monday, but wanted to experiment with how fast traders can find that it is not the signal itself that is so important, but in how one anticipates the action of the market, or the bias, the count, the "edge." If we understand the bell curve count we know and have better odds. You'll continue to see us experiment with the best format to provide you the most valuable information.
What we tried to show this week is that regardless of OTM or ATM options if the volume is high enough and the bid/ask is being "played" by others, it is a time to make money.
For day traders, in tight increments. For longer term (3 or 4 day) traders by holding through whipsaw, and taking a second buy only if we see the bias may be shifting.
I study to see only the pivot, and the support and resistance lines. If the market moves by 75- 100 points I recalculate the pivot and support and resistance lines and I buy and sell around these lines.
__________________________
More from our BCO Commentary:
228 stocks on average reached new 52-week intraday highs each day during this last quarter.
· Bullish? Birinyi Associates as top analysts see a 1325 S&P top, which would “translate to a multiple of 17 on the 2010 consensus, neither cheap or extraordinary.” He could be right. Some likely give back would be good, leading to more of a bullish run in 2010.
· The bottom line is that job growth momentum is improving. John Hermann at State Street says “by the third quarter, profits will be at a new all-time record high. That is a plus for the jobs outlook.”
· It’s taken a year, as the market began performing, for corporate profits to begin to catch up. Early last year the corporate profits were made because of the vast reductions in staff. This was a V shape bottom in the stock market; and we are seeing a V shaped chart building in the development of earnings.
· We assume that the first quarter earnings are going to be good, and that this will buoy the market; however, we also believe analysts will be watching and listening to the “tone and comments” of future earnings.
· They will be doing so because the great fear of a W, or a “double dip,” the fear of a return to 9750, will lessen if job growth, higher earnings, and capital spending.
· We’ll see financials again gaining, this time 194% for the quarter. But again, this has a false fact within it, as the value for quarterly earnings in the financial sector was 50 to 60 billion three years ago, will be 20.1 billion this year, and was 6.9 billion the first quarter of last year. We are seeing steady improvement.
· Earnings lead to business spending, which leads to hiring, which leads to consumer spending. The cycle may be returning. Typically 60% of companies beat estimates, so there’s a good chance, analysts think, that we’ll hit 35 to 36% earnings growth.
Wednesday, April 7, 2010
My Simple Rules for Trading
"I was in search of a one-armed economist so that the guy could never make a statement and then say: 'on the other hand.'" - Harry S. Truman
My simple rules of trading:
1. Do not buy if I do not feel right.
2. When I buy pay no higher than prior day close, and preferably near best buy price. If I don't get to buy that day, so be it.
3. Always have buy and sell orders in, at a limit. Always.
4. Strictly follow the rules of the 4 day stop loss
5. Watch the count very carefully. It's a bell curve from 1 to 10, and as anything gets to a 7 or 8 it's likely a cycle will return and reverse, hence why we are long or short.
6. This is like playing cards. It is gambling. But with education you realize you are only fighting your own emotions.
Trading is an art of zen.
There is a reason we are not trading. The market is not. We move down 36 points, up 50, and options simply do not move.
We are a key resistance area at 11,000. If the market turns, consolidation should not be lengthy. If the market continues it's up move it's likely the down moves, when they come, will be more extreme.
John Murphy said, "Why commodities are stronger than they appear while the dollar is weaker -- too much focus is being placed on the weak Euro and not enough on rising commodity currencies --- weak agricultural markets are masking bigger gains in more economically sensitive energy and metal markets.
My simple rules of trading:
1. Do not buy if I do not feel right.
2. When I buy pay no higher than prior day close, and preferably near best buy price. If I don't get to buy that day, so be it.
3. Always have buy and sell orders in, at a limit. Always.
4. Strictly follow the rules of the 4 day stop loss
5. Watch the count very carefully. It's a bell curve from 1 to 10, and as anything gets to a 7 or 8 it's likely a cycle will return and reverse, hence why we are long or short.
6. This is like playing cards. It is gambling. But with education you realize you are only fighting your own emotions.
Trading is an art of zen.
There is a reason we are not trading. The market is not. We move down 36 points, up 50, and options simply do not move.
We are a key resistance area at 11,000. If the market turns, consolidation should not be lengthy. If the market continues it's up move it's likely the down moves, when they come, will be more extreme.
John Murphy said, "Why commodities are stronger than they appear while the dollar is weaker -- too much focus is being placed on the weak Euro and not enough on rising commodity currencies --- weak agricultural markets are masking bigger gains in more economically sensitive energy and metal markets.
Tuesday, April 6, 2010
Dealing with False Facts
It is a fact within a fact that someone must do something for 10,000 hours before they become good at it. Study The Outliers by Malcom Boyd to learn how facts can be deciphered, Boyd is a genius at it, and compare it with the false facts that surround us in newsbites.
We as traders and humans deal in false facts that lead to false interpretations, and soon become our newsbites. Imagine, more of our attention (without choice) covers Sarah Palin, or sexual escapades, and true change can then never take place.
It is most important to know that nothing is real. A rock is not hard. You know only what you know.
Note our new format makes the OEX Alert faster to read, and provides links to the areas you may want to study. We welcome your feedback.
Here is another excerpt from the BCO Commentary:
· Bonds should have more upside until late April, when we might have a correction, before a stronger upturn to bonds for the rest of 2010.
· A T & T pays a 6% dividend. How can anyone with cash not put cash someplace like this?
· We’ll go long on the Canadian dollar after a nice 2% correction, and stay long.
· Many Dow Theorists subscribe to our service. For those that understand this first note that it was the Dow transports that hit the new highs ahead of the Dow. Bears then saw that not as much was following along. This is called non -confirmation, or bearish divergence. In our daily OEX I call this “a trading range.” There is tight divergence, bullish or bearish, and we’ve seen many days of even moves up, always to show a bearish influence, but steady grounds.
We as traders and humans deal in false facts that lead to false interpretations, and soon become our newsbites. Imagine, more of our attention (without choice) covers Sarah Palin, or sexual escapades, and true change can then never take place.
It is most important to know that nothing is real. A rock is not hard. You know only what you know.
Note our new format makes the OEX Alert faster to read, and provides links to the areas you may want to study. We welcome your feedback.
Here is another excerpt from the BCO Commentary:
· Bonds should have more upside until late April, when we might have a correction, before a stronger upturn to bonds for the rest of 2010.
· A T & T pays a 6% dividend. How can anyone with cash not put cash someplace like this?
· We’ll go long on the Canadian dollar after a nice 2% correction, and stay long.
· Many Dow Theorists subscribe to our service. For those that understand this first note that it was the Dow transports that hit the new highs ahead of the Dow. Bears then saw that not as much was following along. This is called non -confirmation, or bearish divergence. In our daily OEX I call this “a trading range.” There is tight divergence, bullish or bearish, and we’ve seen many days of even moves up, always to show a bearish influence, but steady grounds.
Monday, April 5, 2010
A Teaching Week
This week we are going to share with you the commentary that our Blue Chip option subscribers see each Monday morning. It's a teaching week, as Floyd is out in Palm Springs on business, and we believe with how the market and option market itself has behaved that the timing of some "renewal" of the basics is in perfect form.
We will also be testing a formula this week for a new service we are considering that provides the bell curve bias, and whether to long or short, and will define which "type" of option to buy.
It's all an experiment to show how we choose "falling in love with an option"
Lastly, the Floydian Philosophy of Trading needs some repetition for our many new subscribers after the third year win we've had on winning Top 10 Advisory Service Reader's Choice Award in Stocks and Commodities Magazine. So first, here's a taste of what www.bluechipoptions.com is, we will post an excerpt of the commentary each day this week:
· China grows, and Chinese stocks go up, and many analysts believe they will continue to. In fact, we see China Mobile (CHL) and Petro China (PTR) are undervalued.
· Turkey is three years behind the market, and will move up dramatically in years. We’re high on GARAN.Turkey, Turyklye Garanti Bankasi on the Turkish Exchange.
This will be hard to find to trade, but check with your brokerage:
http://en.wikipedia.org/wiki/Garanti_Bank
· We are also high on CZZ, Cosan, on the advent of what we think are higher sugar prices.
· Each of these above stocks we will list in our stock charts, and begin posting as buys. We want to buy on any dip to 10,780 or less. And hold.
· We will then hold each of the above positions with a 25% trailing stop loss, in our Speculative portfolio, also utilizing PnF charts.
· If your holdings approach 50, trim positions.
We will also be testing a formula this week for a new service we are considering that provides the bell curve bias, and whether to long or short, and will define which "type" of option to buy.
It's all an experiment to show how we choose "falling in love with an option"
Lastly, the Floydian Philosophy of Trading needs some repetition for our many new subscribers after the third year win we've had on winning Top 10 Advisory Service Reader's Choice Award in Stocks and Commodities Magazine. So first, here's a taste of what www.bluechipoptions.com is, we will post an excerpt of the commentary each day this week:
· China grows, and Chinese stocks go up, and many analysts believe they will continue to. In fact, we see China Mobile (CHL) and Petro China (PTR) are undervalued.
· Turkey is three years behind the market, and will move up dramatically in years. We’re high on GARAN.Turkey, Turyklye Garanti Bankasi on the Turkish Exchange.
This will be hard to find to trade, but check with your brokerage:
http://en.wikipedia.org/wiki/Garanti_Bank
· We are also high on CZZ, Cosan, on the advent of what we think are higher sugar prices.
· Each of these above stocks we will list in our stock charts, and begin posting as buys. We want to buy on any dip to 10,780 or less. And hold.
· We will then hold each of the above positions with a 25% trailing stop loss, in our Speculative portfolio, also utilizing PnF charts.
· If your holdings approach 50, trim positions.
Thursday, April 1, 2010
Bombarded and Embedded
First trading day in April, Dow up 12 of last 15, 2008 +3.2%, 2009 +2.0%. NASDAQ up 13 of 15 day before good Friday, 9 straight since 2001
Good Friday tomorrow, market closed, Easter on Sunday
The market showed consistent reversal, opening at 10,907 and hitting a theoretical Dow low of 10,793. We good support lines at 10,650-10687 and think this area the market could move to, and from there, more upbound. With negative futures no entry should have been made to the call, and we will list the same call again, to follow futures,and to note the higher risk, as the market struggles. Our put hedge is a May issue. It will show nice profits without too much time erosion if we're right a correction is close to occurring in the 3% area from market highs.
Every day I hear that 17,000 IRS agents are out to make sure the census is taken and to "watch us" and each day I hear all taxes will have to be raised because of Obamacare.
It's an example of false facts in the market. Some of the above is true, some is out of context, and some is totally untrue. We have to filter these false facts out of unemployment figures,
U Of M Sentiment, what and where tax increases will be. Remember, you are bombarded and now embedded with data
Good Friday tomorrow, market closed, Easter on Sunday
The market showed consistent reversal, opening at 10,907 and hitting a theoretical Dow low of 10,793. We good support lines at 10,650-10687 and think this area the market could move to, and from there, more upbound. With negative futures no entry should have been made to the call, and we will list the same call again, to follow futures,and to note the higher risk, as the market struggles. Our put hedge is a May issue. It will show nice profits without too much time erosion if we're right a correction is close to occurring in the 3% area from market highs.
Every day I hear that 17,000 IRS agents are out to make sure the census is taken and to "watch us" and each day I hear all taxes will have to be raised because of Obamacare.
It's an example of false facts in the market. Some of the above is true, some is out of context, and some is totally untrue. We have to filter these false facts out of unemployment figures,
U Of M Sentiment, what and where tax increases will be. Remember, you are bombarded and now embedded with data
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