Columbus Day

Today is Columbus Day which means the government and the slimey bankers take the day off, but the market is open and everyone else who has a job is working.

First some reading, so we see why the dollar is falling, Gold and Silver are rising, and the elections are so critical to our sanity.

1. The bankers phucked us. We let them.
http://noir.bloomberg.com/apps/news?pid=20601087&sid=a6g9Mv92t0pk

2. This is my favorite. Bubbles Greenspan created a great portion of the real estate bubble and "free credit," and has the gall to write this:
http://noir.bloomberg.com/apps/news?pid=20601087&sid=akB_IZ1E7ulg

Calm Your Mind

Yesterday is a perfect example of a market poised for a move. And the oddsmakers are all arguing it, but the consensus remains long term bullish.

We are not trading a put yet. The volume is too light, the flat lining too steady.
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Many traders ask questions daily. These are the questions I am asked the most:

1. What Pnf Charts do you watch
1 minute, 5 minute, 15 minute, daily and weekly)

2. Why do you constantly argue with facts and "false facts"
(because they vastly influence how the public reacts. We are a gullible, and ill read people)

3. Do you have stop losses in place at all times?
(No. First, it is not possible to do so on an index option, but even if it were we keep all option stop losses as "mental ones" as listing them can draw market makers to buy the stop loss, moving the market down).

4. What is the key to your success?
(1. Discipline and Focus 2. Following Rules, flexibly 3. Questioning all authority and all facts

5. You follow the market all day, and you recommend meditation, and even show a meditation methodology on your home page. Why?
I believe we know little of ourselves and that we know only what we want to know. Meditation eases and relieves the mind of itself, and I use meditation twice daily to "calm my mind"

Venus Turns Retrograde

Additionally traders see positive news in the number of companies that are boosting dividends

Our next trade is slightly different than normal as we are preparing for a slight sell off before longer term upside. With this position read our instructions carefully...

When Japan yesterday (sorry we wrote China) took measures to boost their economy it resounded around the world and futures yesterday showed what it meant in security to the public

There is now speculation other central banks will follow and it's why we project new Dow tops near 11261 and perhaps 11350

Some chartists see the oversold conditions as leading us back to the fib retracement at 10740
Or even to Dow 10629

We will not play any potential downside as we see the risk too high with the overall momentum for health and well being as an economy too high

If futures show downside begin buying a November ITM call expecting a larger second buy and hold

We will recommend this call as we see the market play out so note to only buy if this downside is clear

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For moon chartists, Venus turns retrograde on 10/8 for the first time since the major low of March 6th, 2009. Today and tomorrow have stronger chances of reversal than normal days. We believe that any decline occurring now or to occur will be short term as a trader's profit taking decline, and will lead to more upside.
The Questions Floyd is asked is proving very popular, with lots of feedback. Sometimes these questions are asked within testimonials, or "thanks," or "WTF did I do? letters" Here's five more:

1. Floyd, I have made over 140k this year trading the OEX, thanks to my Level 3 membership and constant questions of you. Do you seriously save 10 or 15% of every winning trade and take it out of your trading portfolio
(Great news on your profits, and YES, I always save 10 to 15% of any win and hide it. I do not use it to cover losses. I hide it by moving it to TIPS, inflation traded bonds, or SLV, if the price is lower (not now)
2. How often are successes on double down buys compared with a single buy and sale?
(I have never calculated a percentage but the odds of success do diminish as you buy down. If you are following the market carefully it's easier to know when NOT to buy down, if you are seeing a massive cracking of support and resistance lines; however, almost always the market trends in bias within a 4 day period, and the majority of the double downs become profitable. I only do this when I see short term "breaks to a bias" occuring).
3. How much money do I need in my account to daytrade?
(The SEC which protected us so well from Madoff and cash derivatives, etc, has elected to protect the consumer by irrational legislation that requires a 25k balance in a day trading account. If not pattern day trading this balance is not required).
4. Do you believe the mid term elections will effect and affect the economy if the GOP wins?
(Very much so. Everyone will first show euphoria because the GOP has told us "the spending will stop" (they created it) and they will "abolish national health care," which they have lied to the American people so well about that now most everyone thinks it's bad. I believe the past two years have been full protectionism by the rich in the GOP (The Skull and Bones boys) to get things back to normal, where the poor are used, the middle class abused, and the rich richer)
5. What's the best option trade you ever made?
(Several years ago I bought heavily on 4 month out calls on Apple (AAPL) and bought it down heavily when it moved down. I returned 300% in less than 45 days of holding. On the OEX I have many days in the past 10 years where I have 50 to 60% returns, and always sell at that %, as I am fearful my greed instinct will take over.)

Sit On Your Hands Day

Japan lowered their prime rate yesterday and the market jumped.

For those that bought the call the day before on the downside move huge profits were possible.

Following the market opening no puts would have been bought.

With the upswing yesterday we have approached market tops.

The market has more upside, perhaps to 11,224 through 11,310 but a slight retracement is likely to occur.


The Dow hit theoretical highs of 11,005 and lows of 10,712.63, with a total movement of nearly 200 points.

We will not trade puts or calls today and let the market breathe. I am simply unsure of how the market will react to such swings in trading

Today is sit on your hands day


Do not chase any trade in this market, put or call. Follow our option signal rules to the T to win, as it's in the volatility this past few weeks that we've had the greatest success.

And remember to always have sell signals in.

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Real facts: The market has rallied 38% in 90 days. Almost 2500 Dow points from 3/9 to 6/11 alone moved, and from there has moved up an additional 1400 points, or 17%.

This is a fast upside, perhaps too fast.

We have also noticed, in recent weeks, that Down openings 80% of the time lead to UP closings. Don't know if this is a long term pattern, but it's a clear short term one.

Earnings reporting begins in earnest this week, and results will suddenly become our reality.

How Often Do You Recalculate

The market opened up despite negative futures and the put was available as low as 4.10 and sold to highs of 6.60.
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Many traders commented on "the top five questions" and asked for more, so here's the next five most popular questions subscribers ask:

1. How often do you re-calculate the support/resistance and pivot. (Once to twice a day. If high movement, by 10.30 to 12 noon, and again by 2.30 p.m. before the 3 p.m. market makers take over)

2. Do you trade by minute charts? (I use them, but I trade by knowing an option and how it will respond to the market movement ("falling in love" with an option means learning its nuances)

3. When you sell, how do you think of the sale? (This answer will disturb you. I am personally trading against others, as you are, when we bid/ask. I sit and hope I am making someone else lose their ass while I make money. It is a "war thinking.")

4. You soapbox liberalism and fight conservatism throughout your writing. How is this relevant to the market? (I soapbox what I believe "right thinking" healthy to our populace and economy. I believe idiocy leads our politics and that this idiocy affects the market dramatically. I try to influence to help traders see that there are direct correlations. Further, I support conservatism and liberalism. I do not support "greed" conservatism or "extreme" liberalism, by my definitions.) Those with me when Bush became President made a great deal of money on oil, as I know the family, their first interest being power and power with oil. Georgey Jr just wasnt' smart enough to keep manipulating the oil prices after Iraq so desperately failed. And traders would have made great money following housing and betting with me against growth, which I felt all created by Greenspan and later Cheney the President to support an already weak economy)

5. When you lose several days in a row, what do you do? ( I analyze my journal of the trades to learn what I did wrong, and I stop trading for a few days)

Huge Wealth Disparities

Friday continued the play: Theoretical Dow top: 10,906 and a theoretical bottom at 10,781. We will continue with the same October options that we favored and profited from 7 times last week, and with the same specific buy below prior day close methodology.

The market is clearly bullish, and we believe, as does KeyTurningDates.com that "the bear market rally has one goal: "to create a sucker rally that will finally get the public back in the market before the devastating second leg of the supercycle bear takes the markets to new lows."
That's happening now, and may continue to occur ( a bullish trend) through all of 2011, and much of 2012. That's just enough time for all our greeds to build, and for the slime to find the best ways to fool the government and the stock market buying public.

The New Economy Index (NEI) averages just 5 stocks and just hit a three year high.
SE Asia markets are higher than any level since their 1987 crash.

The mood is good in the American markets. We're killing ourselves and others daily and spending big bucks in Afghanistan, 13% of our nation is in poverty, 26% fully uninsured with health benefits, we now hate our Muslim Communist dictator and want fresh meat in Congress, finally realizing all we have has rotted. Life is normal.

Unemployment is high and will remain so. Unskilled labor has been replaced by technology, companies have found out they can do well with less, and we've proven now that the Bush 2.7 trillion deficit was largely fueled by false bubbles and the lowering of taxes.

Every single economic depression has been preceded by huge wealth disparities. The income gap between the richest and the poorest Americans grew last year to its widest amount on record.

Despite the GOP's need for greed (don't end the tax breaks) and the Pee Party babbling, the U.S. Census reported last week that the income gap between the richest and poorest Americans grew last year to its widest amount on record.

Lies

These numbers are very real and important. Yesterday the market by 2.45 p.m. had spiraled from highs of 10,948/10988 theoretical Dow tops, to lows of 10,745/10,705.

Those are numbers that stand out because we "almost crossed" 11,000, (the magic in 000's) and we retreated right to the 16th century mathematician Fibonacci bottoms and jumped back up.
Charles Nenner Research had just noted that moving below 10,700 would likely than move us lower, but we held at this number yesterday. And the bulls struggled again. Whipsaw all day.

Puts hit highs of 7.50 and Calls hit highs of 11.40. Traders who owned profited and traders who bought today could have also been profitable by simply following support and resistance lines and the pivot, one recalculation perhaps by noon, and traders could have traded both signals twice each for profits.

Today we'll list the same signals, but only as day trades. We do not want to hold inventory over the weekend, and want time to really analyze if we are having higher highs, and if the market is now reacting less to "news." It appears this way in the last 10 days of trading.

I can't make this stuff up if I tried:
Bush does this:
Bush Tax Cuts Reduced Total Income By $2.7 Trillion
Just as they did in 2000, the Republicans are running this year on an economic platform of tax cuts, especially making the tax cuts permanent...

Obama is blamed for spending money.

Of course, no one is behind "freezing his adminisration" or "false lies" being perpetrated, and not one GOP member seems to remember this.
Current Signals: