I like reporting to you before the 3 p.m brothel party on Wall Street begins, showing the moves of the day. The option gods were right with us, with the put we bought yesterday soaring to highs of 5.50.
All traders should have profited, and also had the opportunity to buy the call we recommended at deep discounts as the market began the whipsaw, and sell by 2.47 p.m. for great profits as the Dow came even with the day before.
10,746 -776 is a hugely strong resistance area. You'll see how the market ended, but we'll play the same game one more day, rolling both dice.
Wednesday, August 11, 2010
Tuesday, August 10, 2010
Foggy Market
Stocks tend to drift up during August, but light trading also occurs and this can magnify the impact of bad news. Because investors are now nervous about deflation/inflation, or renewed recession, worry still remains, and fear is in the background.
The market showed theoretical Dow tops of 10750 and bottoms of 10609. Entry positions were available for both trades. Silver and Gold both dropped.
The market is foggy, unclear, waiting for something.
From trader BA, who just moved to Level 3:
"Floyd,
Thank for the credit to Level 2. I did not know that Level 3 was inclusive of it. I'm enjoying your service. I've been trading Credit Spreads for 5 years and have experienced some of the pitfalls of trading them and having to end up managing them for a loss in-the-money.
So, far I've nibbled at some positions using the guidelines and I am trying not to pay attention to the profits currently, which by the way have been averaging 22% and I've closed out every trade profitably thus far, but rather give my attention to finding out if I stuck with my plan and not allowed emotions to help sway my decisions.
Again, thanks for a good teaching site and for what I've learned thus far in a very short time."
_____________________
I am at loss why we do not understand why the U.S. job market "loses steam" or that we are not stimulating employment. It is obvious, and deep in our retail economy; there are few sectors where the cost of the product is not more valuable to us than the jobs we ourselves have taken away. This is not the "bad companies" doing so, but merely capitalists trying to make money on their capital investment and seeing that the consumer was only willing to "pay less." There is only so much that can be cut in raw materials and manufacture.
Our naivety creates our obesity. "Oh, I didn't know that I had to eat 2000 calories or less, and I never thought."
The market showed theoretical Dow tops of 10750 and bottoms of 10609. Entry positions were available for both trades. Silver and Gold both dropped.
The market is foggy, unclear, waiting for something.
From trader BA, who just moved to Level 3:
"Floyd,
Thank for the credit to Level 2. I did not know that Level 3 was inclusive of it. I'm enjoying your service. I've been trading Credit Spreads for 5 years and have experienced some of the pitfalls of trading them and having to end up managing them for a loss in-the-money.
So, far I've nibbled at some positions using the guidelines and I am trying not to pay attention to the profits currently, which by the way have been averaging 22% and I've closed out every trade profitably thus far, but rather give my attention to finding out if I stuck with my plan and not allowed emotions to help sway my decisions.
Again, thanks for a good teaching site and for what I've learned thus far in a very short time."
_____________________
I am at loss why we do not understand why the U.S. job market "loses steam" or that we are not stimulating employment. It is obvious, and deep in our retail economy; there are few sectors where the cost of the product is not more valuable to us than the jobs we ourselves have taken away. This is not the "bad companies" doing so, but merely capitalists trying to make money on their capital investment and seeing that the consumer was only willing to "pay less." There is only so much that can be cut in raw materials and manufacture.
Our naivety creates our obesity. "Oh, I didn't know that I had to eat 2000 calories or less, and I never thought."
Monday, August 9, 2010
Bad Payroll
Floyd, I joined Advanced Mentoring 4 months ago, paper traded for 90 days, have followed each one of your signals since then, buying only at best buy or near there, and selling to support and resistance lines, that I recalculate each day. I have been profitable an average of 28% on 26 to 27 trades. You answer my emails, and constantly help me hold my emotions when I write you. I enjoy your commentary as our provocateur, and have actually begun thinking of facts differently. I'm writing to simply thank you. My membership fees have paid back ten fold.
-William-JP, Garland, Tx
If I were to comment on JP's success from the teacher perspective, it would be: He had read all of our recommended books, and he listened to our rules,and followed them, also knowing when the "stretch from our suggestion."
http://www.oexoptions.com/AdvancedMentoring/AM.html
Friday we ended profitably to both put and call as the market gyrated right down to support lines, and burst back to resistance lines. Floyd was amused that our "learning" of bad payroll triggered the market, when all of us knew this. Yet again, it was the trigger just pointing to what happened.
Our Dow projections are slightly changed, but to remain profitable as we have with so many profitable trades we need to watch more carefully how the market breathes.
Here's what we see, using the Dow and the S&P:
1. Downside is clear if and when the S&P closed below 1086, the Nasdaq below 1850, and the Dow at 10,147
2. We see the deepest downside 10,127-10,250 unless massive world news triggers events, but even then believe the market will hold near 10,000
3. We see first tops at 10,746, and the possibility of the market summer rallying to potentially even above 11,000. If this occurs we will begin selling most we own in Blue Chip Options.
4. It is more likely for a larger correction if the market euphorially rises again to the 11,000 area.
-William-JP, Garland, Tx
If I were to comment on JP's success from the teacher perspective, it would be: He had read all of our recommended books, and he listened to our rules,and followed them, also knowing when the "stretch from our suggestion."
http://www.oexoptions.com/AdvancedMentoring/AM.html
Friday we ended profitably to both put and call as the market gyrated right down to support lines, and burst back to resistance lines. Floyd was amused that our "learning" of bad payroll triggered the market, when all of us knew this. Yet again, it was the trigger just pointing to what happened.
Our Dow projections are slightly changed, but to remain profitable as we have with so many profitable trades we need to watch more carefully how the market breathes.
Here's what we see, using the Dow and the S&P:
1. Downside is clear if and when the S&P closed below 1086, the Nasdaq below 1850, and the Dow at 10,147
2. We see the deepest downside 10,127-10,250 unless massive world news triggers events, but even then believe the market will hold near 10,000
3. We see first tops at 10,746, and the possibility of the market summer rallying to potentially even above 11,000. If this occurs we will begin selling most we own in Blue Chip Options.
4. It is more likely for a larger correction if the market euphorially rises again to the 11,000 area.
Friday, August 6, 2010
What Have We Learned?
I have been traveling for the last three days. I wrote this commentary on Sunday 8/1 in advance of my travels, and also to help us see something. As I head home today we end a week that is best commented on by two things:
1. How have we profited from it?
2. What have we learned?
As we know, I project the Dow short term. I have no interest in long term projections, nor think the average analyst nor any chart. Too much is changing in this world, by the minute.
I do believe the market always hits overbought and oversold pockets, true support and resistance, and that by the study of a short term and long term Point and Figure chart that all the noise can be taken away and one can judge what would ordinarily do.
The true stock analyst in today's market must then study a reputable news source (such as Bloomberg) for the information of that day, and begin interpreting (both with Bloomberg and yourself) and how the daily "newsbites" will affect how close the market is to a support/resistance line, to the bullish % in the market, to the "mood of the market".
The key to trading is no longer buy and hold, and fundamentals.
I can tell in my traveling that America is in many ways spending (iPhones, iPads) and in many ways holding back (not opening restaurants, spending less discretionary income) and that many that are employed do not see recession, and cannot fathom either unemployment insurance or the cost of private insurance.
I see it daily. The employed, with health insurance, believe it is the responsibility of each person to gain health care, and that they should not be paying for what others are unable to do.
As most of you know I am not one for all the talk of the Constitution. I think it's an overrated document that we have not followed for years, and suddenly is our "Bible". So use this, or the Bible, and be citizens that recognize there are really three worlds in America:
1. The truly poor
2. The middle class poor, even though that appear rich
3. The vastly rich, the oligarchs, that good or bad attract more money always and pay less in taxes.
We have done this to ourselves.
1. How have we profited from it?
2. What have we learned?
As we know, I project the Dow short term. I have no interest in long term projections, nor think the average analyst nor any chart. Too much is changing in this world, by the minute.
I do believe the market always hits overbought and oversold pockets, true support and resistance, and that by the study of a short term and long term Point and Figure chart that all the noise can be taken away and one can judge what would ordinarily do.
The true stock analyst in today's market must then study a reputable news source (such as Bloomberg) for the information of that day, and begin interpreting (both with Bloomberg and yourself) and how the daily "newsbites" will affect how close the market is to a support/resistance line, to the bullish % in the market, to the "mood of the market".
The key to trading is no longer buy and hold, and fundamentals.
I can tell in my traveling that America is in many ways spending (iPhones, iPads) and in many ways holding back (not opening restaurants, spending less discretionary income) and that many that are employed do not see recession, and cannot fathom either unemployment insurance or the cost of private insurance.
I see it daily. The employed, with health insurance, believe it is the responsibility of each person to gain health care, and that they should not be paying for what others are unable to do.
As most of you know I am not one for all the talk of the Constitution. I think it's an overrated document that we have not followed for years, and suddenly is our "Bible". So use this, or the Bible, and be citizens that recognize there are really three worlds in America:
1. The truly poor
2. The middle class poor, even though that appear rich
3. The vastly rich, the oligarchs, that good or bad attract more money always and pay less in taxes.
We have done this to ourselves.
Thursday, August 5, 2010
We'd Like to Repeat
On the theoretical Dow tops of 10,742, and lows of 10,580, despite a day up until the 3 p.m. hour that seemed perfect for day traders, and hesitant on upside
Calls were tighter to play, from 2.90 to 3.70 and puts even tighter. We will keep both signals open.
___________
We'd like to repeat Monday's commentary, after another week has gone by, first for review, and then for comment:
"Stocks had their best month in a year, with the Dow posting a July gain of 692 points, or 7.1%. Encouraging earnings reports have supported the market. On Friday the blue chips overcame an early 120 point drop to finish down just 1 point. However, the FEAR began. U.S. economic growth slowed in the second quarter to a 2.4% annual rate as consumers remained frugal and a business restocking showed signs of fading.
Floyd's favorite, and his soapbox rants for years: "The recession was deeper, and the subsequent recovery slower, than the government originally estimated. Remember just a few years ago when Emperor Bush was telling us we were 'not really in a recession' and that things were brighter. Hmm, well it appears the numbers were wrong and the 1.5 last years of the Emperor's reign the GDP was actually much worse, with corrected numbers.
People forget the cause of the recession and focus on the stimulus spending that is meant to save it. For just a year, that didn't exist, I would like to implement the Republican strategy for "stop spending money". I have yet to see a Republican plan that details WHAT TO DO.
Floyd predicts another large economic stimulus required before year end.
Our masterful call that has hit profits over 21 times in a row was profitable again Friday for traders that had steel nerves and bought on the downside, waiting for the turnaround."
Comment: Even hedge funds can't trade the whipsaw and make money, and certainly individual traders cannot.
As the economy and lack of jobs worsens I suggest again that the top 50 multinational S&P500 companies are just bringing in the cash, building their coffers, and the market is now led by only newsbits and electronic trades, while the corporatization of America takes place. We falsely think that socialism is overtaking our country; instead, a reverse capitalism in which only the few have it all is at stake.
Calls were tighter to play, from 2.90 to 3.70 and puts even tighter. We will keep both signals open.
___________
We'd like to repeat Monday's commentary, after another week has gone by, first for review, and then for comment:
"Stocks had their best month in a year, with the Dow posting a July gain of 692 points, or 7.1%. Encouraging earnings reports have supported the market. On Friday the blue chips overcame an early 120 point drop to finish down just 1 point. However, the FEAR began. U.S. economic growth slowed in the second quarter to a 2.4% annual rate as consumers remained frugal and a business restocking showed signs of fading.
Floyd's favorite, and his soapbox rants for years: "The recession was deeper, and the subsequent recovery slower, than the government originally estimated. Remember just a few years ago when Emperor Bush was telling us we were 'not really in a recession' and that things were brighter. Hmm, well it appears the numbers were wrong and the 1.5 last years of the Emperor's reign the GDP was actually much worse, with corrected numbers.
People forget the cause of the recession and focus on the stimulus spending that is meant to save it. For just a year, that didn't exist, I would like to implement the Republican strategy for "stop spending money". I have yet to see a Republican plan that details WHAT TO DO.
Floyd predicts another large economic stimulus required before year end.
Our masterful call that has hit profits over 21 times in a row was profitable again Friday for traders that had steel nerves and bought on the downside, waiting for the turnaround."
Comment: Even hedge funds can't trade the whipsaw and make money, and certainly individual traders cannot.
As the economy and lack of jobs worsens I suggest again that the top 50 multinational S&P500 companies are just bringing in the cash, building their coffers, and the market is now led by only newsbits and electronic trades, while the corporatization of America takes place. We falsely think that socialism is overtaking our country; instead, a reverse capitalism in which only the few have it all is at stake.
Wednesday, August 4, 2010
Sometimes Hold Sometimes Daytrade
The market showed theoretical Dow tops of 10,676 and bottoms of 10,560.
The upside actually held, after a nice drop in the a.m. allowing traders to gain entry to the August OEX 520 Call as low as 2.70.
Day traders sold this to 3.30 before noon.
Others will hold this position in their open signals, following prior instructions.
We continue to see a strong resiliency to the bull market, and a fair chance we'll pass the Fibonnaci lines at 10,746.
And, there's a 40% chance the reverse will take place, and we will first sell off, likely to near 10,400.
The same holds true for our new August OEX 490 Put, available below prior day close as low as 2.45.
The bulls want to continue. We're watching both Gold and Silver and listening to the talk of summer rally.
For those of you asking how we "sometimes hold, or sometimes daytrade," this depends on YOU, your option goals, and the amount of time you would spend watching charts.
Using the .60 profits available on the call in late morning trading. By itself this is very little, and often not worth the effort.
However, done numerous times a day, or a week, and in a year this how day traders make a living.
Meanwhile, we hold two open signals. Consider tight profits, or hold for the bias. The count remains with the call.
The upside actually held, after a nice drop in the a.m. allowing traders to gain entry to the August OEX 520 Call as low as 2.70.
Day traders sold this to 3.30 before noon.
Others will hold this position in their open signals, following prior instructions.
We continue to see a strong resiliency to the bull market, and a fair chance we'll pass the Fibonnaci lines at 10,746.
And, there's a 40% chance the reverse will take place, and we will first sell off, likely to near 10,400.
The same holds true for our new August OEX 490 Put, available below prior day close as low as 2.45.
The bulls want to continue. We're watching both Gold and Silver and listening to the talk of summer rally.
For those of you asking how we "sometimes hold, or sometimes daytrade," this depends on YOU, your option goals, and the amount of time you would spend watching charts.
Using the .60 profits available on the call in late morning trading. By itself this is very little, and often not worth the effort.
However, done numerous times a day, or a week, and in a year this how day traders make a living.
Meanwhile, we hold two open signals. Consider tight profits, or hold for the bias. The count remains with the call.
Tuesday, August 3, 2010
A Bull Run
The week opened to a bull run. Only traders that chased the put up got in, with lows of $12.00 and highs of 15.30 before the 3 p.m. hour.
Again because we structure our analysis first without the 3 p.m. to 4.15 p.m. "traders time" we saw Dow theoretical highs of 10,723 before 3 p.m.
The area around 10,746 is a major resistance line, where the market has stopped at almost all levels, from 8000 up to 10,000.
Many traders have written with our many recent successes sharing that they feel paralyzed by the market's whipsaw, and that any move they decide to make they then hesitate with any change in the market.
Our success with the July and August 500 Calls took place because we did the following:
1. Took calculated risk
2. Entered at calculated prices that they as the trader had defined in advance of entry; in other words, they knew how high or low they were willing to pay and to sell.
3. Ignoring the newsbites and simply following Point and Figure charts.
RIMM announces its new smartphone. A Blackpad is ready to roll soon, to try to keep up with Apple. Many companies report earnings.
Again because we structure our analysis first without the 3 p.m. to 4.15 p.m. "traders time" we saw Dow theoretical highs of 10,723 before 3 p.m.
The area around 10,746 is a major resistance line, where the market has stopped at almost all levels, from 8000 up to 10,000.
Many traders have written with our many recent successes sharing that they feel paralyzed by the market's whipsaw, and that any move they decide to make they then hesitate with any change in the market.
Our success with the July and August 500 Calls took place because we did the following:
1. Took calculated risk
2. Entered at calculated prices that they as the trader had defined in advance of entry; in other words, they knew how high or low they were willing to pay and to sell.
3. Ignoring the newsbites and simply following Point and Figure charts.
RIMM announces its new smartphone. A Blackpad is ready to roll soon, to try to keep up with Apple. Many companies report earnings.
Subscribe to:
Posts (Atom)