Low Rates Are Not Bullish

Today is Veteran's Day. The market is flatlining, and allowing us tight two way profits on both trades, and we're still keeping both open. Remember, in tight market conditions take tight profits, and study the pivot/support and resistance and recalculation during the day.

Something will trigger the market, and the analysts will say "this" is what caused it. It is just the market inhaling and exhaling.
We saw theoretical Dow tops of 10,404 and bottoms of 10,215.

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Low rates on Treasuries many bond investors think is bullish. Most investors are now borrowing money to invest in bonds; the are looking for safety.
Low rates are not bullish. When no one is borrowing interest rates decline. Low rates means the demand for our product is low

Want to understand what is really happening:

1. http://www.truth-out.org/bill-moyers-money-fights-hard-and-it-fights-dirty64766

2. There Aren't Enough Jobs For 4 Out Of 5 Unemployed Americans
There simply aren't enough jobs to employ four out of five unemployed Americans, according to recent data from the Bureau of Labor Statistics. The total...

Selectiveness of Our Collective Thoughts

As the market showed a mild whipsaw around pivot and support and resistance lines we were able to sell our open call, bought at 9.00 yesterday for as high at 10.80, for the 20% we were looking for.
We saw the same support and resistance lines and the same struggle. Remember, we have to see a 230-245 drop to generate a bear shift and we see a deepest bottom near 11,127.

Puts are waiting. Their time will come. We will keep the call position open for both new buy, below prior day close, and to hold for future profits.

We are listing a December put. Only enter if you see news-bytes trigger futures and futures show hesitancy.

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Has anyone thought of the revolution in the labor force that will occur when the baby boomers hit the time when the charade is up, they are living with children, who are doing poorly, and health insurance will fail them without controls. This is actually considered by some to be a pre-mediated move from "the middle class shifting to the lower middle class" and accepting it, while the poor accept worse, and the entire spectrum shifts to an elite oligarchy.

Great sci-fi plot and half true today.

I listened to former President Bush, out trying to sell his book on TV last night. Every morning he reads the Wall Street Journal, that's it, and it shows the intellect we had in our White House.
The WSJ is a Murdoch paper, so he is reading exactly what he wants to hear, slanted to just the direction he wants.

Funny few remember what he wrought.

The selectiveness of our collective thought as a nation often frightens me. We may not "get it."

The World is Shifting

A nice soft start to the week. Everyone is now waiting. Waiting for "the ball to drop" or for a home run hit, and no indicators show any bear correction that is any more of one than a normal sell off.

We took entry to the November OEX 545 call at a good buy down price. We'll hold for the day and to work for 22 to 25% average markups. As we watch the "count," or bell curve analysis, shift, we'l watch for a put entry, but the market must begin moving again
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Everyone thinks I hate Republicans and am a full blooded liberal. I am a liberal, am proud of it, and see liberals as being open to all ideas, and conservatives as being open to only their opinions.
Most of you have been waiting for me to scream after the Republicans "lied" their way into the House last week, but Fareed Zakaria says it best in Time Magazine. This is really worth your time:

http://www.time.com/time/politics/article/0,8599,2029356,00.html

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"As the dollar wobbles, China is pulling back from U.S Treasury securities and buying up hard assets around the rule." - Barrrons

We discuss the implication of China's change in investment, and their holding of their own rare earths extensively in our service www.bluechipoptions.com

The world is shifting; is the U.S in gridlock, shifting with the earth.

Okay, so here's how they are reporting it. I chose reputable middle of the road media messengers in Fidelity, Bloomberg, and Market Watch

1. Fidelity Investments:

Wall St rallies as Fed stokes risk appetiteWall St rallies as Fed stokes risk appetite
REUTERS—28 MINUTES AGO

Stocks rose sharply on Thursday as risk appetite escalated following more monetary stimulus from the U.S. Federal Reserve in a move to boost a wilting economic recovery. The Fed's plan to buy $600 billion in Treasuries lifted risky assets, including commodity-related stocks that rose on expectations of worldwide demand. Oil and basic materials equities rallied on the greenback's weakness.

2. Bloomberg: http://noir.bloomberg.com/apps/news?pid=20601087&sid=a3o3eQdjgIOw&pos=1

3. MarketWatch: http://www.marketwatch.com/story/us-stocks-rally-day-after-fed-boost-2010-11-04

And Floyd: The stimulus should have been part of the original stimulus, but Obama was afraid the American people would not accept it. The buying of debt puts us as huge risk, but no part of what Obama did in the first two years even should have been about unemployment, but instead tyring to stop the imploding of the world's economy. We came that close.

So yesterday everyone got happy and the world was better, and the market went UP on borrowing more money and creating more deficit. It's hard to fathom our stupidity at times.

We raked in on the call, and sold the put at stop loss. The market had reached a two year record top of 11,467 by 3.15 p.m. The call we saw happen. Somone had an offer in to sell at 17.20 before opening, and someone bought. That led the option price, and it only reached it again by 3.15 p.m. Several of our traders were part of the lead in 17.20 price to sell before open, and it's an example of how bid / ask really is bartering.


We will not recommend any new trade for weekend trade, but believe the market will show some balancing on Friday.

We'll have new Dow Projections Monday, and stand by our bullish tone (no matter thinking nothing is really good). There may be correction, but this overextended market could continue.

Power and Greed

Okay, so we have now entered complete gridlock, and a nation totally divided, but not really, as most are not well informed enough to even know what our country does.
The market hit lows of 11.047 in morning trading, and highs of 11,246 by 3.15 p.m.. Obama spoke at 1 p.m., let everyone beat him up, and Bernanke again said we'll create more stimulus (sorely needed, and should have been when Obama was elected), and off the market went. And that didn't last long. Complete hesitancy by 3.30 p.m.

Our December call was a good buy at 13.90 with sales to 15.40. Many asked why we chose December calls and the higher risk November puts. We believe we will have faster chance of quick downside, and that this strike call could both be day traded, traded for tight profits, and held for longer term upside.

The market seemed stunned yesterday. Taking all the rhetoric in, facing emotions that all of else felt about "what we wanted," made the market, moving ahead of us, seem to "digest the news," whatever that news was.

Meg Whitman spent 160 million of her own money to win in California. What sadness. That money could have helped so many people, yet she chose POWER and GREED, and still lost her ass. It's the only real good news of the political day for me. I hope she regrets her excess, but as an oligarch, I doubt she even knows she did harm. What the heck, send her housekeeper back to Mexico, she was an illegal. The sadness is how much was spent in general to create false ads, or "fear ads," and what it accomplished, except the gridlock is reversed, and the Pee Party is "watching to keep the GOP moving right."

OMG.

And this is what we wrought:
SAD MEAL: McDonald's Workers Told They'll Only Get Raises, Benefits If Republicans Win
WASHINGTON -- There may be something rotten at McDonald's -- and it's not a year-old Happy Meal.
The owner of a franchise in Canton, Ohio... (read the article)

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Questions Traders Ask Floyd:

1. How long did it take you to learn the stock market?
I believe it takes 10,000 hours to truly learn a subject. I have been studying the market for over 30 years.
I believe it takes 90 to 120 days to paper trade OEX options "live" to even understand what will and can go wrong.

2. Do you believe option and stock trading will be viable over the next ten years?
I believe it will vastly change in scope, but be very profitable to the individual investor that knows WHAT to trade.

3. Do you believe we are successfully regulating the market makers against excess? And, how does this affect the daily trader?
I believe no one has listened to Paul Volker, who knows just what to do, and instead we "play around" with his suggestions because of lobbyists and the market makers.
It may take one more flash crash to awake the American people to the fact that unemployment is a by product of years ago, NOT now, and is secondary to making the stock market and thusly the economy healthy.

A General Rule

Everyone was excited yesterday as the elections to "change the world" were taking place. I'm saddened by it all, and how stupid many politicians must think we are, or how stupid we may be.

The market sharply moved up 86 points at opening, with a solid showing of futures in advance. The market again through mid morning showed trade range tendency, as the world waits for the election "answers" and what Bernanke does with the USD this week.
Calls that were bought yesterday near the market close were available for quick tight profits in morning trading.

A general rule often asked of me:
"When you say buy below prior day close, and you give a %, should we hold exactly to that %?"
The answer, as evidenced yesterday, is "sometimes." Every buy and sell price we give are in "general ranges" and set up for you to make judgment. As an example, the market finally moved below prior day close yesterday near the end of the day, and we did want entry to the call, so we adjusted our buy price UP to still buy below prior day close. This is also true with our "sell range."

Sell NEAR the prices we guide to, or take tighter profits-these are standards you define based on your own risk orientation and goals. This allowed us a sale from a buy at 13.40 to $15.00 the next day, and many will still hold on the call, again all before 2 p.m.

The stagnation or flat lining we are seeing is making it much more difficult to trade, as the moves are light, fast, and obviously "waiting" for election news, and then news of the USD.

We will keep both signals open, and take a larger second buy to the call if necessary. We believe there may be slight downside, and would only be concerned if we passed 11,030 and closed below that; otherwise, we see whipsaw and a "relief" turn to upside that it's all "decided and fixed."

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In our Blue Chip Option portfolio (www.bluechipoptions.com) our average return rate on options recommended this year, inclusive of wins, losses and commissions is 46.1%

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By the end of last week the stock market had hit a six month high of a return of 31.49%^. Cynics wonder just how much this is like prior run ups where we rush to the top, again, only to fall back to support lines again. If the corrections that take place are not lower lows in the market they are merely a healthy correction. It's when the lows come in below prior support line lows that market makers and stock traders should be taking notice.

Everyone is Waiting

Everyone is waiting. For the election. For the government to print money. For something. Yet people are spending like crazy and only 5% of our people seem to understand that high unemployment is a long fix, and we all have short memories.

By 1.30 p.m. the market had hit highs of 11,288 and lows of 11,080 on the theoretical Dow, the same patterns we've seen for days.
We gained no entry to the call by 1.30 p.m., but did gain entry to the put as a hedge on whipsaw, and as a risk trade.
We suggest trading will be range bound until after the Election and until after Bernanke speaks and the world is "decided."

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The 510 put was available at 2.05 with sales to 3.50. Great profits. We'll continue to hold for any open trades.

The 535 call, in late trading, was available for 13.40 and sold to 14.50 for astute day traders.

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Third quarter earnings helped the market rally up, but we still lack the real foundation for upside. 1/3 of S&P companies reporting earnings as of last Thursday had showed impressive results, and 835 of companies topped earning concensus estimates. If this holds it will be the highest proportion since 1994.
Fourth quarter earnings are now being projected into the market mentality, analyzing whether that growth and margin will continue. We think analysis on fourth quarter possibilities will soon enter the market thinking, and be priced into it.

Here's something that will surprise you:

U.S. Supreme Court Increasingly Favors Business, Study Says

Oct. 26 (Bloomberg) -- The U.S. Supreme Court is more business-friendly today than it was 25 years ago, according to a study conducted by a group that advocates for environmental safeguards and civil rights.

The study by the Constitutionality Accountability Center in Washington takes issue with comments by Justice Stephen Breyer in a Bloomberg News interview earlier this month. Breyer said business groups aren’t doing any better than they have historically.

The group concluded that from 1981 to 1986 the U.S. Chamber of Commerce won less than half its cases at the Supreme Court, compared with about two-thirds over the past five years. Numbers compiled by the chamber show a more limited increase in the business trade group’s success rate.

“Justice Breyer’s flat wrong in suggesting that the chamber has always done well before the court,” said Doug Kendall, the Constitutionality Accountability Center’s president. “The Supreme Court’s modern pro-corporate tilt -- and particularly its sharp ideological split in favor of the U.S. Chamber of Commerce -- are relatively new developments, traceable to the court’s current conservative majority.”

The Chamber of Commerce’s high court record in recent years has fueled contentions that the court harbors pro-business sympathies. The business lobby won at least a partial victory in 13 of the 16 cases in which it filed a brief during the court term that ended in June. Since the 1997-98 term, the group has won 74 percent of its cases, according its figures.

Breyer Correct?

That success isn’t driven by favoritism, according to Robin Conrad, the head of the chamber’s litigation unit. She pointed to recent decisions giving workers more power to sue employers for illegal retaliation.

Much of the chamber’s recent success stems from concerns among the justices about “lawyer-driven litigation,” Conrad said. “I just don’t think that translates into pro-business, and I think Justice Breyer was correct when he rejected that notion,” she said.

Breyer said in the interview that he had done his own historical research and concluded that the modern-day court doesn’t rule in favor of companies any more frequently than it has in the past.

“Business groups have always done well, winning a little bit more than half,” he said.

The Constitutionality Accountability Center study concludes that isn’t the case, at least during the 1981-86 period. The group says the Chamber of Commerce won 15 of the 35 cases in which it participated during that time.

Ideological Split?

The Chamber of Commerce faulted the study for basing its conclusions on only a small fraction of the 800 cases resolved by the court during the five-year period.

“This is a perplexingly small sample size,” Conrad said. “To me this looks like a theory in search of evidence.”

The study, which will be released later today, was provided in advance to Bloomberg News.

Kendall said his group chose the 1981-86 period because it immediately preceded the appointment of Justice Antonin Scalia, now the longest-serving current member. The group based its figures on searches of legal databases, casebooks collecting Supreme Court rulings and briefs on file at the Library of Congress.

A separate Constitutionality Accountability Center study released earlier this year said that business issues often divide the justices ideologically, with Chief Justice John Roberts and Justices Scalia, Anthony Kennedy, Clarence Thomas and Samuel Alito tending to side with companies.

Campaign Spending

The court divided on those lines in January in a 5-4 decision that overturned decades-old restrictions on corporate campaign spending. The same five were in the majority in a 5-3 decision in 2008 limiting shareholder suits against a company’s banks and business partners. Breyer didn’t take part in that case.

Other business issues don’t produce an ideological breakdown. Thomas and Scalia have rejected business calls for limits on punitive damages, saying the Constitution doesn’t provide any protection against large awards. Breyer supports some limits on damage awards.