A few testimonials first:
-I'm still holding puts from yesterday, but I was able to buy 10 contracts of the 500 call at 4.90 and sell at 5.50 - 20 minutes later. A quick 600 dollars. The market seems to be hesitating, so maybe we'll still be able to cash out those puts.-MR
-Nice trades on the 500 call twice today, Floyd, on .50 moves. The market just flat lined most of the day-GCC
By 2.30 p.m. it appeared the market had almost fallen asleep, and by 3 p.m. I calculated the Dow had moved from the theoretical high of 9874, to as low as 9700, yet all in short tight whipsaw and hesitant moves. The traders that wrote above were able to day trade the market, watching the tight moves. Trading was simply hard to do. The moves were too tight, and there was not enough volatility.
We're leaving both signals open.
The first trading day of October the NASDAQ has been up a number of years, and can trigger market movement. Heres' a comment from our www.bluechipoptions.com service, appropriate to index trading:
"Tomorrow the ISM manufacturing index data is announced, gauging the strength the manufacturing sector. This should be a key report as it studies: 1. Production levels, 2. New Orders Placed
3. Inventory levels 4. Supplier deliveries and 5. Economic environment.
This report reflects sentiment of the health of the market: inflation and labor conditions, and historically a "trigger report." We should note that the ISM index is showing the first signs of expansion in 19 months, up 52.9 in August vs. 48.9 in July, and strong gains in manufacturing sales.
But what stands out is that manufacturers aren't stocking up, and are using "just in time" thinking, keeping pared down inventories. This is part of why unemployment continues high, indicating that current production needs are developing to a pared down supply chain, and that more jobs are being done by those that are "left" employed."
As one studies their economic calendars for the week note:
*The "real" Gross Domestic Product final 2nd quarter (annualized) are being released this week. During Emperor Bush's terms we would always find major "corrections" in GDP, correcting optimism with a realistic number, but always when the "real" annualized reports came out, which are not as well followed by the market. Under Obama, of interest, we are noting real GDP #'s typically do not show much correction to prior data. Only if they do this week will we see a market that responds.
*The Real Gross National Product, or GNP, "reflects the goods and services produced by the labor and property supplied by U.S. residents, and includes net income from the rest of the world, which the GDP does not track.
This report correlates well with the ISM report that shows production and income have ramped up. Again, these are all good signs of "end of recession," and we should begin analyzing if a higher unemployment rate may now become a norm in our society.
And....FDIC Is Broke, Taxpayers At Risk, Says FDIC Chairman
So, with what the market did yesterday, here's a chartist summary:
1. On indices slower MACD is crossing faster MACD, a sign of sell off
2. Every bullish % indicator is struggling with crossing under its 20 day exponential moving average. This includes, for example, $BPNYA and #BPCOMP, the NYSE, and the Nasdaq concurrently.
3. Oil continues to show signs of breaking down.
And here's what our emotions around numbers are saying:
1. The market has been doing so well, it's likely it will cross 10,000.
2. We want the market to cross 10,000. We want to think we are all doing better.
3. Lots of indicators show strong growth, and "they" tell us we are coming out of a recession.
Wednesday, September 30, 2009
Tuesday, September 29, 2009
Futures Fluctuated Widely
Futures fluctuated widely before opening yesterday, and the market moved from a 9 to the put bias count UP 135 points in the first hour of trading, bringing the Dow to theoretical 9852 in 60 minutes of trading.
Louisiana Governor Bobby Jindal was caught using the State Helicopter 14 times to attend church.
This is the issue, but we'll come back to it.
Despite a count of 9 to the put, the market massively rebounded Monday, confounding us all, with upside continuing to highs of 9864 before 2.30 p.m, holding the morning run up. Our Dow projections remain intact, just inversed.
We saw an historical key reversal day, and very hesitant futures, of a day not "bound for glory." We did a morning calculation on the S/R lines that we twittered out to all that showed the new R1 at 9823.64 which the market struggled to reach most of the trading day.
There is typically heavy selling the last day of the third quarter, and the Dow has been Down 8 of the last 11 years. Institutional Portfolio window dressing ends at this time, and many sales are made. It's why we saw yesterday and today and "key reversal days," even before we've hit the 10,000 struggle. Any consolidations, or renewals at upside, now have to have more justification and reasoning.
Some question what is really happening on Wall Street: http://www.ft.com/cms/s/0/c2f7e3d4-a9e9-11de-a3ce-00144feabdc0.html
Many of our traders ask about our "count," which are calculations we use on the High/Low/Open/Close of high volume options, and we teach how to actually calculate in our Level 3 and Advanced Mentoring service. It is based on what I call *The Floydian Bell Curve Theory:
The basic bell curve will show a top when a movement is three standard movements above the norm. Typically then stocks (or any commodity) will correct to the middle of the bell curve.
It is the watching of these standard movements, the support and resistance lines, around the bias that works with our simple "test" of this using OTM options of high volume and introducing H/O/L/C.
You can study this work completely in Level 3 service. Our count analysis and S/R calculations can also work with any stock or ETF, which we teach at www.bluechipoptions.com
A simple method of "card counting", with a bit more logic behind it.
And Democrat or Republican, just find a scandal. It will be easy. There are so many, and it is these 540 that lead us :( Many things are not being fixed. Just remember this as we blow up the bubble:)
Whew.
Louisiana Governor Bobby Jindal was caught using the State Helicopter 14 times to attend church.
This is the issue, but we'll come back to it.
Despite a count of 9 to the put, the market massively rebounded Monday, confounding us all, with upside continuing to highs of 9864 before 2.30 p.m, holding the morning run up. Our Dow projections remain intact, just inversed.
We saw an historical key reversal day, and very hesitant futures, of a day not "bound for glory." We did a morning calculation on the S/R lines that we twittered out to all that showed the new R1 at 9823.64 which the market struggled to reach most of the trading day.
There is typically heavy selling the last day of the third quarter, and the Dow has been Down 8 of the last 11 years. Institutional Portfolio window dressing ends at this time, and many sales are made. It's why we saw yesterday and today and "key reversal days," even before we've hit the 10,000 struggle. Any consolidations, or renewals at upside, now have to have more justification and reasoning.
Some question what is really happening on Wall Street: http://www.ft.com/cms/s/0/c2f7e3d4-a9e9-11de-a3ce-00144feabdc0.html
Many of our traders ask about our "count," which are calculations we use on the High/Low/Open/Close of high volume options, and we teach how to actually calculate in our Level 3 and Advanced Mentoring service. It is based on what I call *The Floydian Bell Curve Theory:
The basic bell curve will show a top when a movement is three standard movements above the norm. Typically then stocks (or any commodity) will correct to the middle of the bell curve.
It is the watching of these standard movements, the support and resistance lines, around the bias that works with our simple "test" of this using OTM options of high volume and introducing H/O/L/C.
You can study this work completely in Level 3 service. Our count analysis and S/R calculations can also work with any stock or ETF, which we teach at www.bluechipoptions.com
A simple method of "card counting", with a bit more logic behind it.
And Democrat or Republican, just find a scandal. It will be easy. There are so many, and it is these 540 that lead us :( Many things are not being fixed. Just remember this as we blow up the bubble:)
Whew.
Monday, September 28, 2009
The Market is at a Turning Point
Today is Yom Kippur. It is also a key date for potential downturn, or when reversals normally occur.
Let's start with where we are "fucked." This video is making the rounds as "propaganda" the socialists are trying to put in our schools. Read the lyrics. Try to understand what the message really was, and how "good and open" to all faith, without mention of war or opinion. http://www.youtube.com/watch?v=5zrsl8o4ZPo&feature=youtube_gdata
This helps comment well on the the "state of our nation." Recent blogs you can find at http://www.bluechipoptions.com/ should help our OEX traders to see how I feel the "sad mood" of a nation divided will affect our overall return to a healthy nation.
Stocks fell some of last week for several key reasons:
1. The FEDS talked about inflation. It's an evil word to America.
2. The market was vastly oversold, and extended, and we hit new highs.
3. The USD finally bounced up, homebuilders began to weigh on the market, and even the financial sector overall leader, XLY, began to show signs of holding at resistance lines.
If September has historically been a bad month for stocks, October is often the harbinger of the "best six months" beginning, and it's likely we think for the Dow to hit its top Fibonnaci retracement at 10,700.
Our Dow projections have been in a range of 700 points for over 3 weeks, showing the strength of the market building, hesitating, and struggling at 10,000. As we'll point out in our Blue Chip Options service today also:
The USD gained short term strength late last week, while homebuilders (XHB) falling for five days, and beginning to show signs of resistance breaking down. It's showing in KB Homes (KBH) and Pulte Homes (PHM).
We suggest you pull charts on all three of these sectors and begin tracking, just as we should be tracking the financial sector, the winner of the year, and note the relative performance of XLY is showing signs of stalling.
I am most interested in XLY which I see more as what represents the most economically sensitive area, how we are spending. I remain worried about inflation, and the lack of normal correlation between a rising stock market and lowering of unemployment. This is not occurring this time through, and remains a flag. There are simply not enough new jobs, businesses are cutting back to make money with rising costs of doing business"
With all this said, the market last week and especially this week is at a turning point.
Let's start with where we are "fucked." This video is making the rounds as "propaganda" the socialists are trying to put in our schools. Read the lyrics. Try to understand what the message really was, and how "good and open" to all faith, without mention of war or opinion. http://www.youtube.com/watch?v=5zrsl8o4ZPo&feature=youtube_gdata
This helps comment well on the the "state of our nation." Recent blogs you can find at http://www.bluechipoptions.com/ should help our OEX traders to see how I feel the "sad mood" of a nation divided will affect our overall return to a healthy nation.
Stocks fell some of last week for several key reasons:
1. The FEDS talked about inflation. It's an evil word to America.
2. The market was vastly oversold, and extended, and we hit new highs.
3. The USD finally bounced up, homebuilders began to weigh on the market, and even the financial sector overall leader, XLY, began to show signs of holding at resistance lines.
If September has historically been a bad month for stocks, October is often the harbinger of the "best six months" beginning, and it's likely we think for the Dow to hit its top Fibonnaci retracement at 10,700.
Our Dow projections have been in a range of 700 points for over 3 weeks, showing the strength of the market building, hesitating, and struggling at 10,000. As we'll point out in our Blue Chip Options service today also:
The USD gained short term strength late last week, while homebuilders (XHB) falling for five days, and beginning to show signs of resistance breaking down. It's showing in KB Homes (KBH) and Pulte Homes (PHM).
We suggest you pull charts on all three of these sectors and begin tracking, just as we should be tracking the financial sector, the winner of the year, and note the relative performance of XLY is showing signs of stalling.
I am most interested in XLY which I see more as what represents the most economically sensitive area, how we are spending. I remain worried about inflation, and the lack of normal correlation between a rising stock market and lowering of unemployment. This is not occurring this time through, and remains a flag. There are simply not enough new jobs, businesses are cutting back to make money with rising costs of doing business"
With all this said, the market last week and especially this week is at a turning point.
Friday, September 25, 2009
What's happening...
This is what appears to be happening:
· The Republicans have once again used the tried and true Karl Rove technique of providing false facts, and creating fear. And half the country believes it.
· The Republicans, who had no regard for deficits for the past 8 years, and historically actually create more deficits than Democrats, are now fearful the debt we have created, to undo the financial disaster that has filled every cranny of our society, and use this debt to their advantage, preaching our inability to pay it back, and the “socialism” of it.
· The lobbyists control the 540 in Washington that control our lives, and these idiot Senators and House members appear to be literally fucking around, playing games for their “constituents” and the whole concept of what free democratic government is suddenly has nothing to do with how our nation lives, and our people are easily influenced by advertising and media.
· So then we blame the media, which is instant and never completely factual, and filled with right and left wing idiots that spew more nonsense.
· Remember, most Americans only read to the 6th grade level. More than 37% of all Americans have not read a book in the last year. We are unschooled, and influenced by the influencers.
· My week of vacation allowed reflection on our barrage of input, and as usual, refreshed the mind from the stress or work worry, or fatigue, or whatever, that we create.
· But again this comes back to the way it is set up now most people are fucked, and it can get better. The country was seeing with vision just a few months ago, and beginning to think of all we needed to do (The Obama Agenda), all things that should have been done, and all that were imminent.
· Our financial crisis is far from over, but it has been slowed. The stock market has rebounded well, but suspect is that the most traded stock this summer has been AIG, all traded by speculators on wild swings, on a stock on a company that no one quite knows the value of. And how much do they owe us?
· So, as we have chances to create real change, and perhaps care for more of our own people with healthcare, to stop the robber barons by forcing competition. It’s a sad lack of regulations that have created industries like the financial and healthcare sectors that appear to be collusive and usury is accepted practice…but a change came over this country this summer, brought on by fear. Fear induced by false statements, and then again a speculative market that has showed tremendous gains, so much so that one wonders what bubbles we’re creating. The Treasury Note and Bond certainly are bubbles, as we again fuel our debt by buying from China, and having them buy our debt. Same with Japan. The simple statement “buy made in America” is both hard to do, and not even the right thing to think.
· All of this tells me we are “fucked.” We don’t know what is happening before our eyes, and we are letting it happen. Something in thusly, in my “way of thinking,” in the air.
· However I feel about the world, or how Americans eat at McDonalds by choice, there are influences to the world on how the G20 are thinking, and how the 540(House/Senate) are thinking, and the propaganda in our country is as ripe as it’s ever been. Something is up, and it will affect the market.
· That’s the beginning of my thinking of how to explain this to you, but get ready for October, where upward pull could surprise us.
· The Republicans have once again used the tried and true Karl Rove technique of providing false facts, and creating fear. And half the country believes it.
· The Republicans, who had no regard for deficits for the past 8 years, and historically actually create more deficits than Democrats, are now fearful the debt we have created, to undo the financial disaster that has filled every cranny of our society, and use this debt to their advantage, preaching our inability to pay it back, and the “socialism” of it.
· The lobbyists control the 540 in Washington that control our lives, and these idiot Senators and House members appear to be literally fucking around, playing games for their “constituents” and the whole concept of what free democratic government is suddenly has nothing to do with how our nation lives, and our people are easily influenced by advertising and media.
· So then we blame the media, which is instant and never completely factual, and filled with right and left wing idiots that spew more nonsense.
· Remember, most Americans only read to the 6th grade level. More than 37% of all Americans have not read a book in the last year. We are unschooled, and influenced by the influencers.
· My week of vacation allowed reflection on our barrage of input, and as usual, refreshed the mind from the stress or work worry, or fatigue, or whatever, that we create.
· But again this comes back to the way it is set up now most people are fucked, and it can get better. The country was seeing with vision just a few months ago, and beginning to think of all we needed to do (The Obama Agenda), all things that should have been done, and all that were imminent.
· Our financial crisis is far from over, but it has been slowed. The stock market has rebounded well, but suspect is that the most traded stock this summer has been AIG, all traded by speculators on wild swings, on a stock on a company that no one quite knows the value of. And how much do they owe us?
· So, as we have chances to create real change, and perhaps care for more of our own people with healthcare, to stop the robber barons by forcing competition. It’s a sad lack of regulations that have created industries like the financial and healthcare sectors that appear to be collusive and usury is accepted practice…but a change came over this country this summer, brought on by fear. Fear induced by false statements, and then again a speculative market that has showed tremendous gains, so much so that one wonders what bubbles we’re creating. The Treasury Note and Bond certainly are bubbles, as we again fuel our debt by buying from China, and having them buy our debt. Same with Japan. The simple statement “buy made in America” is both hard to do, and not even the right thing to think.
· All of this tells me we are “fucked.” We don’t know what is happening before our eyes, and we are letting it happen. Something in thusly, in my “way of thinking,” in the air.
· However I feel about the world, or how Americans eat at McDonalds by choice, there are influences to the world on how the G20 are thinking, and how the 540(House/Senate) are thinking, and the propaganda in our country is as ripe as it’s ever been. Something is up, and it will affect the market.
· That’s the beginning of my thinking of how to explain this to you, but get ready for October, where upward pull could surprise us.
Thursday, September 24, 2009
When the Economy Grows...
Yesterday we saw classic flat lining for most of the day as the market hesitated before the magic 000's, a number Fibonnaci taught us always causes resistance. The market top was at 9958 before 3:10 p.m., and then began dropping.
There is such resilience within this market that as the market tops, we suggest, and now alter our Dow projections, that sell off/consolidation could be lighter, to a higher low, before more upside. The market "appears" poised for more and more upside, and charts even make October look good.
For traders that took new positions to our puts, the Oct480P was profitable up to 1.40 a contract, and the Oct500P profitable up to 3.00 a contract. For traders that already had a first position, a second and larger buy should have been made at 9950 as we hit it yesterday. And, we hit the jackpot on the Oct500 Call again, buying below prior day close (5.80) and selling to as high as 8.20.
Near the end of the day the new buyer to puts, if holding longer term, began to handsomely profit as the market dropped 54 points.
The put traders made their money as the market fell apart near the end of day, the second time the PPT appears to have been on vacation!
We'll hold the puts, and issue a higher risk call day trade for those that can see a market tipping past 10,000.
Subscriber CA wrote:
You asked us to look for 9950 but I just bought at 3.80 and sold at 6.10 for one contract. I was wondering if your brain is an unique and predictable. I was puzzled myself why market was rejected on Fed rate and it came down. I thought market would be happy with the red rate decision. Please explain why the market became negative.
You are an excellent teacher I have had ever seen. I am still learning your unique teaching everyday. Superb teacher. I admire it.
Thanks,
Floyd's answer: The magic 000's are part of it, and the FEDS mentioned the word inflation. We are simply at market tops that have been driven up very quickly.
On Monday I wrote Blue Chip Option, our sister service, subscribers and posted a blog that I think should be a key read in understanding how the economy is really doing.
So, direct from www.bluechipoptions.com:
Floydian Theory on Okun's Law-THIS IS AN IMPORTANT STOCK READ
The economist Arthur Okun first formulated the theory that says "when the economy grows, it produces jobs at a predictable rate, and if it shrinks, it sheds them at a similar regular pace.
Joshua Ramo has an excellent article in Time Magazine. Cut and paste to your browser and really study, as Mr. Ramo explains the unusual predicament we are in, in that the economy is growing, but unemployment is not shrinking.
http://www.time.com/time/business/article/0,8599,1921439,00.html
As you complete the article, and think out Okun's Rule of Thumb, we are perhaps truly in a shift within our nation, with more unemployed than ever before, and for a much longer time.
As a business consultant for many years I could visually watch the layers of management at firms that were unnecessary, and that many companies were simply not productive with their employees.
We all know this. With the Cash for Clunkers it was 4 for 5 American cars clunked in, and 4 for 5 new cars being bought Japanese.
Walmart is China, and doing well, so it appears we are not willing to stuff. Trade tariff discussions are already starting.
I believe Obama's stimulus package has held us steady so far, and that the market is now naturally producing its Fib retracement , some on good news, some on hope, but most of our rise has been
as pre-indicater of what the economy should become. The market precedes the general economy. The issue of healthcare will be resolved, in a way I think that will define really what kind of nation we are, one led by anger and fear tactics, or one that can be bi-partisan and represent all the people, without the lobbyists that lead our world.
Wall Street has been warned. Regulations are not yet in place, and many schemes are already being hatched. We have to watch for this, as many predict there are more "hidden numbers" that will become clear as the high unemployment hits the GDP, and hits our taxes, as there will then again be more subsidies. Stimulus some believe may need a second phase.
My point in Okun's "Law" is that his extraordinary "obvious" theorem "should be" right, but some tides are turning, or we are modifying the theory.
There is such resilience within this market that as the market tops, we suggest, and now alter our Dow projections, that sell off/consolidation could be lighter, to a higher low, before more upside. The market "appears" poised for more and more upside, and charts even make October look good.
For traders that took new positions to our puts, the Oct480P was profitable up to 1.40 a contract, and the Oct500P profitable up to 3.00 a contract. For traders that already had a first position, a second and larger buy should have been made at 9950 as we hit it yesterday. And, we hit the jackpot on the Oct500 Call again, buying below prior day close (5.80) and selling to as high as 8.20.
Near the end of the day the new buyer to puts, if holding longer term, began to handsomely profit as the market dropped 54 points.
The put traders made their money as the market fell apart near the end of day, the second time the PPT appears to have been on vacation!
We'll hold the puts, and issue a higher risk call day trade for those that can see a market tipping past 10,000.
Subscriber CA wrote:
You asked us to look for 9950 but I just bought at 3.80 and sold at 6.10 for one contract. I was wondering if your brain is an unique and predictable. I was puzzled myself why market was rejected on Fed rate and it came down. I thought market would be happy with the red rate decision. Please explain why the market became negative.
You are an excellent teacher I have had ever seen. I am still learning your unique teaching everyday. Superb teacher. I admire it.
Thanks,
Floyd's answer: The magic 000's are part of it, and the FEDS mentioned the word inflation. We are simply at market tops that have been driven up very quickly.
On Monday I wrote Blue Chip Option, our sister service, subscribers and posted a blog that I think should be a key read in understanding how the economy is really doing.
So, direct from www.bluechipoptions.com:
Floydian Theory on Okun's Law-THIS IS AN IMPORTANT STOCK READ
The economist Arthur Okun first formulated the theory that says "when the economy grows, it produces jobs at a predictable rate, and if it shrinks, it sheds them at a similar regular pace.
Joshua Ramo has an excellent article in Time Magazine. Cut and paste to your browser and really study, as Mr. Ramo explains the unusual predicament we are in, in that the economy is growing, but unemployment is not shrinking.
http://www.time.com/time/business/article/0,8599,1921439,00.html
As you complete the article, and think out Okun's Rule of Thumb, we are perhaps truly in a shift within our nation, with more unemployed than ever before, and for a much longer time.
As a business consultant for many years I could visually watch the layers of management at firms that were unnecessary, and that many companies were simply not productive with their employees.
We all know this. With the Cash for Clunkers it was 4 for 5 American cars clunked in, and 4 for 5 new cars being bought Japanese.
Walmart is China, and doing well, so it appears we are not willing to stuff. Trade tariff discussions are already starting.
I believe Obama's stimulus package has held us steady so far, and that the market is now naturally producing its Fib retracement , some on good news, some on hope, but most of our rise has been
as pre-indicater of what the economy should become. The market precedes the general economy. The issue of healthcare will be resolved, in a way I think that will define really what kind of nation we are, one led by anger and fear tactics, or one that can be bi-partisan and represent all the people, without the lobbyists that lead our world.
Wall Street has been warned. Regulations are not yet in place, and many schemes are already being hatched. We have to watch for this, as many predict there are more "hidden numbers" that will become clear as the high unemployment hits the GDP, and hits our taxes, as there will then again be more subsidies. Stimulus some believe may need a second phase.
My point in Okun's "Law" is that his extraordinary "obvious" theorem "should be" right, but some tides are turning, or we are modifying the theory.
Wednesday, September 23, 2009
Never Look Back
The week after September triple witching the Dow was down five in a row 2002-2006, with heavy losses in 2002 through 2005. Despite our error on calling a call a put in our new signal, traders caught on and were able to trade the Oct 500 Call for $1.00 to $1.50 per contract profits.
We hold a first hedge position to one of two puts, and will advise selling and stop loss below a bit differently on our hedge position, so take note.
Most floor traders believe the market is poised to run to 9950, or just above 10,050 but it's not yet showing in the results in the market. For example, the PPT did not come to the rescue today, the first of FED meetings comments, and the market only increased slightly. Our manual calculation for the bell curve analysis, "the count" is 2.
Some comments from subscribers:
"Hi Floyd,
We have the 510 oct call and are sitting on a small
profit.
Would you hang on to it a bit longer or sell and go in to some puts?
We don't have enough money to buy both ways at the moment" JC
Floyd-> Always be willing to take your profits off the table, and never look back.
"Today I made my biggest play so far. I've been buying tiny amounts - 2 and 3 contracts. I took a week or two off to watch the market and trade less while waiting for waiting for a good opportunity to make a bigger play. Today the timing was right and I bought 8 contracts of the call at 10:07 am for the day low of 5.90. I sold 7 minutes and 5 seconds later for 6.40. A quick 10% and an extra 400 dollars.
"I have to admit I was excited. My logic in buying at that time: the world markets have a positive bias today, I bought at the pivot point on a quick retracement from dow resistance at 9880, so I expected a bounce up from there. I got it: MR"
"I am doing better on reading the same signal, falling in love as you say. The 500C has returned profits day after day, as I watch the support and resistance lines.
I'm averaging $1.00 per contract, trading 10 contracts, and following the rules better. MBD"
"It was never my thinking that made the big money for me. It was always my sitting. Got that. My sitting tight" -Jesse Livermore, How to Trade Stocks, famed early 20th century trader
We hold a first hedge position to one of two puts, and will advise selling and stop loss below a bit differently on our hedge position, so take note.
Most floor traders believe the market is poised to run to 9950, or just above 10,050 but it's not yet showing in the results in the market. For example, the PPT did not come to the rescue today, the first of FED meetings comments, and the market only increased slightly. Our manual calculation for the bell curve analysis, "the count" is 2.
Some comments from subscribers:
"Hi Floyd,
We have the 510 oct call and are sitting on a small
profit.
Would you hang on to it a bit longer or sell and go in to some puts?
We don't have enough money to buy both ways at the moment" JC
Floyd-> Always be willing to take your profits off the table, and never look back.
"Today I made my biggest play so far. I've been buying tiny amounts - 2 and 3 contracts. I took a week or two off to watch the market and trade less while waiting for waiting for a good opportunity to make a bigger play. Today the timing was right and I bought 8 contracts of the call at 10:07 am for the day low of 5.90. I sold 7 minutes and 5 seconds later for 6.40. A quick 10% and an extra 400 dollars.
"I have to admit I was excited. My logic in buying at that time: the world markets have a positive bias today, I bought at the pivot point on a quick retracement from dow resistance at 9880, so I expected a bounce up from there. I got it: MR"
"I am doing better on reading the same signal, falling in love as you say. The 500C has returned profits day after day, as I watch the support and resistance lines.
I'm averaging $1.00 per contract, trading 10 contracts, and following the rules better. MBD"
"It was never my thinking that made the big money for me. It was always my sitting. Got that. My sitting tight" -Jesse Livermore, How to Trade Stocks, famed early 20th century trader
Tuesday, September 22, 2009
Option Trading is like Jazz Music
The market opened with a drop that came within the first 30 minutes to 9685. It helped carry Europe down to a lower close, and the market spent the rest of the day trying to "hold up."
Day traders on the October 500C were able to lock fast 20% profits on the buy down. I saw more strength initially in the downward movement, and continue to see it, and several subscribers wisely wrote me "should I get in on the downside" to trade the call. It is important here each trader follow their own intuition and risk/ratio warning, as calls did have potential and the market may indeed not be ready for downside yet.
Our Dow projections are clear in how we see what the market could do, and profits could be good on whipsaw.
The following article we think perfectly explains the thinking of inflation, and the rising or holding unemployment that is not patterning with a rising economy. This is an important read.
http://online.wsj.com/article/SB125348951896526259.html?mod=djemITP
And lastly, on my first day back from vacation Advanced Mentoring client MR, who I was emailing with concerning his work, I'd like to quote how he sees option trading, as this is how traders learn what true trading is:
"It’s neat. It’s mathematical, yet artistic. It’s kinda like Jazz music. It flows, randomly and seemingly uncontrollable at times – but it has structure that may not be readily apparent at first glance. Many don’t appreciate it for what it is, and don’t take the time to really get to know it so that they can appreciate it – even fewer take the time to learn how to play it. I’ve lost a little money doing it so far – but I am starting to be more honest with myself about expectations, limitations, and abilities. More often I can think and feel when it is a good time to trade, and when it’s a good time to watch, document, and learn. It will come with time."
Day traders on the October 500C were able to lock fast 20% profits on the buy down. I saw more strength initially in the downward movement, and continue to see it, and several subscribers wisely wrote me "should I get in on the downside" to trade the call. It is important here each trader follow their own intuition and risk/ratio warning, as calls did have potential and the market may indeed not be ready for downside yet.
Our Dow projections are clear in how we see what the market could do, and profits could be good on whipsaw.
The following article we think perfectly explains the thinking of inflation, and the rising or holding unemployment that is not patterning with a rising economy. This is an important read.
http://online.wsj.com/article/SB125348951896526259.html?mod=djemITP
And lastly, on my first day back from vacation Advanced Mentoring client MR, who I was emailing with concerning his work, I'd like to quote how he sees option trading, as this is how traders learn what true trading is:
"It’s neat. It’s mathematical, yet artistic. It’s kinda like Jazz music. It flows, randomly and seemingly uncontrollable at times – but it has structure that may not be readily apparent at first glance. Many don’t appreciate it for what it is, and don’t take the time to really get to know it so that they can appreciate it – even fewer take the time to learn how to play it. I’ve lost a little money doing it so far – but I am starting to be more honest with myself about expectations, limitations, and abilities. More often I can think and feel when it is a good time to trade, and when it’s a good time to watch, document, and learn. It will come with time."
Subscribe to:
Comments (Atom)