The first trading day in September the market was up 5 straight years 2003-2007, and off 4.2% alone in 2002.
* Some traders limit buying in sectors that are over 50% in an Point and figure Bullish Percent Chart. When a Bullish Percent is over 70% tops are being reached, that may be “steps to breakout”, but with higher risk of being overbought. Note again we have a bullish % over 80, a traditional sign of an overbought market.
Friday we saw enough downturn to make our puts profitable for many subscribers, and calls could have been bought on the downswing, again selling for nice profits same day. Thusly, we will open trading today with one open put, that has been profitable 3 days now, but not to the highs we think it can reach, and one new put. We continue to hold the call open also, despite it being profitable on Friday, for traders waiting for more maximum profits; note that calls may losing their edge.
The bull/bear argument is becoming tiring, as is the euphoria and constant last minute Plunge Protection Team coming in. The constant upswing has made many investors "nervous" that they have missed out on the "action," and increased the buying of now the individual trader, intent on not missing out on profits. We continue to see upside to 10,400 to 10,600 and a potential strong year end, BUT continue to believe we must have consolidation of merit to break this bubble in order for that to happen.
Some facts:
1. http://www.bloomberg.com/apps/news?pid=20601087&sid=aSdMMGzkt1do
2. http://www.bloomberg.com/apps/news?pid=20601087&sid=axhtJ0oKv7Xc
This second article speaks to risking U.S. Treasuries, as more question the viability of long term recovery.
Lastly, our call profits over the past three weeks have been simply extraordinary, and we've lost on 4 puts. Our loss ratio is actually higher than normal because of the capital to the second buys, but still averaging over 28% profits for this period. For those of you new to trading that are with us, and to our stockbrokers and long term subscribers, I'll share that the extended range we've experienced has been quite unusual, and now the study of many technicians, and thusly more and more difficult to option trade because the moves became almost "not believable".
Monday, August 31, 2009
Friday, August 28, 2009
Double Profits
Prior to the market opening, for only the second time in 8 weeks of run up, I watched futures fluctuate up/down, and just before opening actually at 0, no futures definition, to suddenly begin a run up of 21 points UP at 9.25 a.m.
And then...the market opened and moved to lows of 9419, allowing best buy on calls, and great profits noted below under our open signals. First we made money on our open put, with sales to highs of 5.40, while having the opportunity to best buy the call as low as 3.00, and to simply wait out the end of the day Plunge Protection Team run up that allowed it profits to 4.70.
Whew. Double profits.
This market is ready to hit it's top and consolidate. We'll keep both signals open today, and buy no new signals. It's possible to have two way trades again. If possible, and high risk, we ideally would like to own only a put for Monday's opening, but let's see how the market behaves today.
The market data on the table prior to opening was confusing, much conjecture, good news, and excitement that began on the GDP data. There is no doubt that this market, and the American people, want good news, and "want to believe" and this optimism has been part of the massive upswing we've experienced.
Traders recently have been writing with either huge successes in day trading calls, or frustrations that they missed the fast in/out of the move, and lost money on the hedges.
There is no doubt that the normal methodology that built OEX Options successfully, where one typically holds a trade 2 to 4 days, has been short term replaced with either massive swings within a day, or a market that gaps up at opening, or is massively gapped up (by whom or how one might wonder) near the end of the 3 p.m. hour.
Double trading as we have done takes a day traders mentality, and is ABNORMAL to the market. From recent days, and what we saw in Asia and Japan yesterday, I believe market tops, support/resistance, Dow projections....all of it....will soon, if nothing changes, be taken over by buyer fatigue.
August's next to last trading day the S & P has been up only ONCE in the last 12 years. We'll see if history repeats itself; it has not done so once this month so far.
We'll end the week with some stock projections we'll be sharing with www.bluechipoptions.com Preferred Subscribers, as a part of your learning experience for how we trade most everything we have in life.
Supply and demand. Cause and effect. That's all it is.
With a proper consolidation, 9250 or lower, I personally will feel there is rational to the market, and not manipulation. If this type of sell off takes place, I will feel less of the GREED that overtakes us right now, as the market hit new highs.
From there, I'm with Harry Dent, not Roubini, and I can see a short term move in this market to Fibonnaci tops of 10,400, to 10,700.
Last year at Blue Chip Options we began selling our stock portfolio, core and speculative, at Dow 14,100. Following our rules we sold 1/3 of our positions. At Dow 11,100 we sold another 1/3, all still profitable trades.
Then, we let it "run." Our remaining one third of core and speculative stocks fell to new lows, and we began buying again at 7400, and made more buys at 6500. We did not add any new stocks, but only increased our holdings in our existing positions. Preferred Blue Chip subscribers can see our portfolio live, but we're making very good money.
We then trade index options, OEX here, and DIA options over at Blue Chip, and we trade other options that we would normally invest in the stocks in.
Here's an example: I like McDonalds (MCD) and it's underperforming. I figured out how much money I would invest in the stock, and thusly with stop loss, how much I was willing to lose on the investment.
I used the stop loss money (what I would have been willing to lose) and am investing in a LEAP option on McD, allowing two buys. I'll hold it long term, and be hopeful to double my money or more, or lose it all, as I had been willing to lose it anyway.
These are some of the ways I use Floydian logic to control emotions in trading.
I never sell at the top. Always leave money on the table.
I always sell when I can make some money, especially in volatile times.
All of these lessons are exactly how to "think" to trade the OEX, or bananas, or anything you are distributing.
You might review my thinking on trading as the art of selling fruit: http://www.oexoptions.com/pages/fruit.html
So, we've sold no stocks yet. There could be new highs. Just a bit of sanity to the market would make me feel a great deal like a bull market was truly emerging. It simply all seems too soon to me.
And I'm confused by "real events," as the nation is at war with itself right now over false facts
And, now on to a few false facts:
1. Reported in Bloomberg, and this is accurate:
This report shows a drop in recent unemployment findings. Hip hip hooray!
2. Reported in Brietbarts, and equally factually: http://www.breitbart.com/article.php?id=CNG.4452bed82adf3124e5884678e236d7fb.361&show_article=1
This report estimates actual unemployment at 16%. Floyd projects it at over 20%
Personally, I am beginning to wonder if it's the market top of the year, with the euphoria building. Oh happy days:)
And then...the market opened and moved to lows of 9419, allowing best buy on calls, and great profits noted below under our open signals. First we made money on our open put, with sales to highs of 5.40, while having the opportunity to best buy the call as low as 3.00, and to simply wait out the end of the day Plunge Protection Team run up that allowed it profits to 4.70.
Whew. Double profits.
This market is ready to hit it's top and consolidate. We'll keep both signals open today, and buy no new signals. It's possible to have two way trades again. If possible, and high risk, we ideally would like to own only a put for Monday's opening, but let's see how the market behaves today.
The market data on the table prior to opening was confusing, much conjecture, good news, and excitement that began on the GDP data. There is no doubt that this market, and the American people, want good news, and "want to believe" and this optimism has been part of the massive upswing we've experienced.
Traders recently have been writing with either huge successes in day trading calls, or frustrations that they missed the fast in/out of the move, and lost money on the hedges.
There is no doubt that the normal methodology that built OEX Options successfully, where one typically holds a trade 2 to 4 days, has been short term replaced with either massive swings within a day, or a market that gaps up at opening, or is massively gapped up (by whom or how one might wonder) near the end of the 3 p.m. hour.
Double trading as we have done takes a day traders mentality, and is ABNORMAL to the market. From recent days, and what we saw in Asia and Japan yesterday, I believe market tops, support/resistance, Dow projections....all of it....will soon, if nothing changes, be taken over by buyer fatigue.
August's next to last trading day the S & P has been up only ONCE in the last 12 years. We'll see if history repeats itself; it has not done so once this month so far.
We'll end the week with some stock projections we'll be sharing with www.bluechipoptions.com Preferred Subscribers, as a part of your learning experience for how we trade most everything we have in life.
Supply and demand. Cause and effect. That's all it is.
With a proper consolidation, 9250 or lower, I personally will feel there is rational to the market, and not manipulation. If this type of sell off takes place, I will feel less of the GREED that overtakes us right now, as the market hit new highs.
From there, I'm with Harry Dent, not Roubini, and I can see a short term move in this market to Fibonnaci tops of 10,400, to 10,700.
Last year at Blue Chip Options we began selling our stock portfolio, core and speculative, at Dow 14,100. Following our rules we sold 1/3 of our positions. At Dow 11,100 we sold another 1/3, all still profitable trades.
Then, we let it "run." Our remaining one third of core and speculative stocks fell to new lows, and we began buying again at 7400, and made more buys at 6500. We did not add any new stocks, but only increased our holdings in our existing positions. Preferred Blue Chip subscribers can see our portfolio live, but we're making very good money.
We then trade index options, OEX here, and DIA options over at Blue Chip, and we trade other options that we would normally invest in the stocks in.
Here's an example: I like McDonalds (MCD) and it's underperforming. I figured out how much money I would invest in the stock, and thusly with stop loss, how much I was willing to lose on the investment.
I used the stop loss money (what I would have been willing to lose) and am investing in a LEAP option on McD, allowing two buys. I'll hold it long term, and be hopeful to double my money or more, or lose it all, as I had been willing to lose it anyway.
These are some of the ways I use Floydian logic to control emotions in trading.
I never sell at the top. Always leave money on the table.
I always sell when I can make some money, especially in volatile times.
All of these lessons are exactly how to "think" to trade the OEX, or bananas, or anything you are distributing.
You might review my thinking on trading as the art of selling fruit: http://www.oexoptions.com/pages/fruit.html
So, we've sold no stocks yet. There could be new highs. Just a bit of sanity to the market would make me feel a great deal like a bull market was truly emerging. It simply all seems too soon to me.
And I'm confused by "real events," as the nation is at war with itself right now over false facts
And, now on to a few false facts:
1. Reported in Bloomberg, and this is accurate:
This report shows a drop in recent unemployment findings. Hip hip hooray!
2. Reported in Brietbarts, and equally factually: http://www.breitbart.com/article.php?id=CNG.4452bed82adf3124e5884678e236d7fb.361&show_article=1
This report estimates actual unemployment at 16%. Floyd projects it at over 20%
Personally, I am beginning to wonder if it's the market top of the year, with the euphoria building. Oh happy days:)
Thursday, August 27, 2009
Sen Kennedy and Socialism
Quick 20% profits were available on the call in the morning downside,buying below prior day close, and out in 40 minutes or less. What we saw up until the 3 p.m. hour was classic flat lining, where we held above the pivot, but it was barely possible to even watch the market struggle, let alone trade. Flat lining always leads to a major move, and many believe 9700 and up are possible before September.
And many believe a move to 9150 over steps is just as likely. Covering economist Roubini (academic) he sees a potential second wave of recession equal to the first, and is not convinced of the rise, and counter it with Geitner (Goldman boy) that knows the moves, and Bernanke both saying we have made the step, and covered what could have been the financial ruins at the end of the year 08 and as we hit bottoms in early 2009.
As you browse our open and new signals, we're in a "holding pattern" that is always "saved" in some way by the end of a trading day by the PPT. We've seen just a bit less of this, but on lower volume.
In studying the "socialism" that I hear takes over our country I smile, as Sen Kennedy's passing reminds me of when he created the COBRA laws that allow terminated employees the right to health insurance, or unemployment which so many of our people are on, or LBJ, who so smartly never predicted the long term projected cost of Medicare over the long term because "who the hell really knows," and "if we told em they'd never do it, but this country needs Medicare".
Social security, medicare, Obamacare, economic stimulus, banks raising credit card rates so that soon no person that needs to borrow will ever borrow....there is no doubt this country is going through a major period of change.
This emotionally also affects the market. We as a people usually MUST find something that is going right. And the market always precedes the general economy.
Both of our trades are still open , and we'll watch for more chances to profit 20% a day, and try to limit our losses: what an option trader is.
And many believe a move to 9150 over steps is just as likely. Covering economist Roubini (academic) he sees a potential second wave of recession equal to the first, and is not convinced of the rise, and counter it with Geitner (Goldman boy) that knows the moves, and Bernanke both saying we have made the step, and covered what could have been the financial ruins at the end of the year 08 and as we hit bottoms in early 2009.
As you browse our open and new signals, we're in a "holding pattern" that is always "saved" in some way by the end of a trading day by the PPT. We've seen just a bit less of this, but on lower volume.
In studying the "socialism" that I hear takes over our country I smile, as Sen Kennedy's passing reminds me of when he created the COBRA laws that allow terminated employees the right to health insurance, or unemployment which so many of our people are on, or LBJ, who so smartly never predicted the long term projected cost of Medicare over the long term because "who the hell really knows," and "if we told em they'd never do it, but this country needs Medicare".
Social security, medicare, Obamacare, economic stimulus, banks raising credit card rates so that soon no person that needs to borrow will ever borrow....there is no doubt this country is going through a major period of change.
This emotionally also affects the market. We as a people usually MUST find something that is going right. And the market always precedes the general economy.
Both of our trades are still open , and we'll watch for more chances to profit 20% a day, and try to limit our losses: what an option trader is.
Wednesday, August 26, 2009
Making Use of our Dow Projections
Bernanke was nominated for reelection, and the projected national deficit is 9 trillion. America has their panties all wadded up on healthcare, homes are selling a bit better (check the facts, they are short sales and foreclosures) and the stock market, which always precedes the economy, simply can't stop going up. We did a recalculation at 10 am today because of the large gap up and sent it out by Twitter (sign up, this is a really useful tool). At that time r1 had become 9648.09 and the theoretical Dow reached 9660, very close again to our top resistance lines.
The U.S. consumer confidence and home sale forecasts came in good, but oil began to drop. Gold began a slow move down as the market hesitated. For our Blue Chip traders Gold (GLD) has been immensely profiable, but our work with SSRI and SLV, which are ETF's on silver, are up 26% for the year. (Sales pitch: www.bluechipoptions.com-check out our new site and daily blog. Much is free, and you'll see how we Twittter, and how much more you could be working with.
Traders already held OXBIP Sept 480 Call which hit highs of 10.40, allowing for 35 to 45% returns in one day.
Our open hedge put hit stop loss, but many traders reported day trading OXBUL Sept440 Put from 3.30 buys to highs of 4.50 during market dips mid day. Of interest , we had more day trader testimonials yesterday on trading puts for profits than calls, all traders making use of our Dow projections.
Another profitable day for call trading, with financials, retail, airline stocks all leading the rise, as the euphoria continues. We won't say a thing, just continue to lock in our daily profits on the calls.
A fact: There is a one in six chance that both members of a married U.S. couple are obese, and 1 in 13 chance if they are a couple, but unmarried.
The U.S. consumer confidence and home sale forecasts came in good, but oil began to drop. Gold began a slow move down as the market hesitated. For our Blue Chip traders Gold (GLD) has been immensely profiable, but our work with SSRI and SLV, which are ETF's on silver, are up 26% for the year. (Sales pitch: www.bluechipoptions.com-check out our new site and daily blog. Much is free, and you'll see how we Twittter, and how much more you could be working with.
Traders already held OXBIP Sept 480 Call which hit highs of 10.40, allowing for 35 to 45% returns in one day.
Our open hedge put hit stop loss, but many traders reported day trading OXBUL Sept440 Put from 3.30 buys to highs of 4.50 during market dips mid day. Of interest , we had more day trader testimonials yesterday on trading puts for profits than calls, all traders making use of our Dow projections.
Another profitable day for call trading, with financials, retail, airline stocks all leading the rise, as the euphoria continues. We won't say a thing, just continue to lock in our daily profits on the calls.
A fact: There is a one in six chance that both members of a married U.S. couple are obese, and 1 in 13 chance if they are a couple, but unmarried.
Tuesday, August 25, 2009
Choppiness is Beginning
This is a market wanting to be happy, and a kid with too much candy. The swings are lessening, but the market topped at 9628 by early afternoon. We re-calculated the Dow by 10 a.m. on the moves, and the OEX and Dow both moved to a new r2 by 11 a.m.
Choppiness is beginning to enter the market. Premiums remain higher for calls, and puts are still the weak string. Watch our Dow projections carefully this week. The bell curve bias remains massively skewed. Everyone is now predicting a bull run, or a bear crash, and it's actually getting boring.
There's reality in these articles:
http://www.wsj.com/article/SB125106232283552019.html
http://www.ft.com/cms/s/0/90227fdc-900d-11de-bc59-00144feabdc0.html
Do not believe false facts. We need this skill in the market, and just watching the deceptions going on now, we need to know how to recognize "games" as they are played.
Because it is almost necessary to day trade at this point we could see the market tighten on our OXBIP Sept 480 Call and took profits of only 15 to 20%. We'll continue to hold this trade, and not issue a new trade with two open positions.
Choppiness is beginning to enter the market. Premiums remain higher for calls, and puts are still the weak string. Watch our Dow projections carefully this week. The bell curve bias remains massively skewed. Everyone is now predicting a bull run, or a bear crash, and it's actually getting boring.
There's reality in these articles:
http://www.wsj.com/article/SB125106232283552019.html
http://www.ft.com/cms/s/0/90227fdc-900d-11de-bc59-00144feabdc0.html
Do not believe false facts. We need this skill in the market, and just watching the deceptions going on now, we need to know how to recognize "games" as they are played.
Because it is almost necessary to day trade at this point we could see the market tighten on our OXBIP Sept 480 Call and took profits of only 15 to 20%. We'll continue to hold this trade, and not issue a new trade with two open positions.
Monday, August 24, 2009
This Marks Our 25th Straight Call Profit
From Advanced mentoring student MR:
I guess there is a lesson learned along with this week - it ties in to "there is no black and white" We have rules we follow when trading. The market does not realize that we have rules. It is going to act in it's own way and won't always blaze a path that allows us to follow the rules. Sometimes it's going to be "messy" and "fuzzy" or downright dirty - but you have to pay to play. You're not going to make money if you're sitting on the sidelines waiting for the perfect "discount" buy price - especially if you intend to play the hedge - you have to play the trend to some extent just on the principle of the matter.
Friday we saw the market hit theoretical Dow tops of 9559. Our Dow projected tops were 9529.75, so we've hit each of our Dow upward projections, and last Monday hit the one downside move in consolidation.
With the slight sell off last Monday we saw a strong support line emerge at 9116, and 978 in the S&P 500. Friday the S &P exceeded its' two top resistance areas at 1014 and 1022. Our recalculated Dow projections for the day Friday showed 9609-9689 as the next potential market tops.
The option we have "fallen in love with" is -OXBIO OEX.X SEP 2009 475.0000 CALL, which we were able to buy as low as 8.10 in early trading, and sell to highs of 11.20 by day end. Many traders sold out at our projected sales top of 7.90 while others followed our recalculations and held out through the day for the maximum 38% gains that were possible.
This marks our 25th straight call profit, with three hedge put losses. We're far ahead.
Which leads me to the key question those of you that have not hit these 25 call profits have? Your question is: WHY did I over invest in the puts, WHY did I not play the calls, and WHY did I let my own opinion influence my trading?
The question is also your answer.
It is KEY that we do NOT believe ourselves, and what should be, but instead what is.
As an example, I am an experienced 31 year trader that actively believes the market is massively high risk and overbought, yet I've personally played 23 of these 25 calls for profits.
The market is obviously at an irrational top, from manipulation, high frequency trading, or pure investor euphoria-perhaps all.
It's also following Fibonnacci to the T, rising near it's second level (our predicted overall 2009 year top at 10,400 to 10,600) in massive velocity TOO fast moves.
Following Fibonnaci we'll now retrace 38% near our projected tops, just as soon as all of us believe the stock market is healthy again.
But regardless, and this is the key, TRADE the conditions. Be contrarian by nature, and suspicious of false facts but play both the trend, and the reversing of a trend.
I guess there is a lesson learned along with this week - it ties in to "there is no black and white" We have rules we follow when trading. The market does not realize that we have rules. It is going to act in it's own way and won't always blaze a path that allows us to follow the rules. Sometimes it's going to be "messy" and "fuzzy" or downright dirty - but you have to pay to play. You're not going to make money if you're sitting on the sidelines waiting for the perfect "discount" buy price - especially if you intend to play the hedge - you have to play the trend to some extent just on the principle of the matter.
Friday we saw the market hit theoretical Dow tops of 9559. Our Dow projected tops were 9529.75, so we've hit each of our Dow upward projections, and last Monday hit the one downside move in consolidation.
With the slight sell off last Monday we saw a strong support line emerge at 9116, and 978 in the S&P 500. Friday the S &P exceeded its' two top resistance areas at 1014 and 1022. Our recalculated Dow projections for the day Friday showed 9609-9689 as the next potential market tops.
The option we have "fallen in love with" is -OXBIO OEX.X SEP 2009 475.0000 CALL, which we were able to buy as low as 8.10 in early trading, and sell to highs of 11.20 by day end. Many traders sold out at our projected sales top of 7.90 while others followed our recalculations and held out through the day for the maximum 38% gains that were possible.
This marks our 25th straight call profit, with three hedge put losses. We're far ahead.
Which leads me to the key question those of you that have not hit these 25 call profits have? Your question is: WHY did I over invest in the puts, WHY did I not play the calls, and WHY did I let my own opinion influence my trading?
The question is also your answer.
It is KEY that we do NOT believe ourselves, and what should be, but instead what is.
As an example, I am an experienced 31 year trader that actively believes the market is massively high risk and overbought, yet I've personally played 23 of these 25 calls for profits.
The market is obviously at an irrational top, from manipulation, high frequency trading, or pure investor euphoria-perhaps all.
It's also following Fibonnacci to the T, rising near it's second level (our predicted overall 2009 year top at 10,400 to 10,600) in massive velocity TOO fast moves.
Following Fibonnaci we'll now retrace 38% near our projected tops, just as soon as all of us believe the stock market is healthy again.
But regardless, and this is the key, TRADE the conditions. Be contrarian by nature, and suspicious of false facts but play both the trend, and the reversing of a trend.
Friday, August 21, 2009
Why We Use Dow Calculations
The August expiry has been bullish, with the Dow up 5 in a row 2003-2007, and up 1.8% in 2007. Yesterday we listed as a new signal: "We often speak of falling in "love with an option" and show videos in our password protected area on how we day trade by just watching the option itself.
If the market is showing only slightly negative futures, or slight upside, consider this overbought and high risk trade:
-OXBIO OEX.X SEP 2009 475.0000 CALL". The option never was available (as of 2.15p.m.) at any price lower than 6.40, was extremely low volume, and had only hit highs of 6.80.
We recalculated the Dow at 10.30 a.m. and the numbers were so close it wasn't worth sending out. We recalculate again at 2.00 p.m. and R2 was 9378.27, right at our strong resistance line of 9376 where the market went yesterday.
A subscriber asked yesterday why I do Dow calculations, or rather, why we even offer OEX calculations. It's important to understand that the Dow correlates the OEX well, and is simply easier to track and find.
Either using the Dow or the OEX for re-calculations is fine, but note my overall projections for the market are always on the Dow.
Another subscriber asked why we use the bullish percent indicators for the OEX instead of just the OEX. We don't. We do PNF charts, in many varieties,on the OEX,and we use the Bullish percent indicators for a number of indices. For example ($BPNYA) shows the bullish percent for the NYSE.
If the market is showing only slightly negative futures, or slight upside, consider this overbought and high risk trade:
-OXBIO OEX.X SEP 2009 475.0000 CALL". The option never was available (as of 2.15p.m.) at any price lower than 6.40, was extremely low volume, and had only hit highs of 6.80.
We recalculated the Dow at 10.30 a.m. and the numbers were so close it wasn't worth sending out. We recalculate again at 2.00 p.m. and R2 was 9378.27, right at our strong resistance line of 9376 where the market went yesterday.
A subscriber asked yesterday why I do Dow calculations, or rather, why we even offer OEX calculations. It's important to understand that the Dow correlates the OEX well, and is simply easier to track and find.
Either using the Dow or the OEX for re-calculations is fine, but note my overall projections for the market are always on the Dow.
Another subscriber asked why we use the bullish percent indicators for the OEX instead of just the OEX. We don't. We do PNF charts, in many varieties,on the OEX,and we use the Bullish percent indicators for a number of indices. For example ($BPNYA) shows the bullish percent for the NYSE.
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