For those trading on 10/29 note we had re-projected the Dow, and are doing so again, and gave the following instructions:
"There has been enough consolidation to justify a 586 run down, and it’s likely to see the market whipsaw to 10,150 area again, before another consolidation to 9850 to 9679 again."
We wrote the above yesterday, and saw the market hit 9964 by 1 pm. Our contrarian play on the November 500 call returned 33%-45% to traders, all able to buy just slightly above prior day close.
We read that the market would react to the downside, and we saw a market upturn of over 200 theoretical Dow points by 1.45 p.m.
The reason the market gave for this was that the U.S. economy expanded for th first time in more than a year amidst the stimulus. We are seeing, to a GDP follower, "recovery."
I gave a speech at a symposium last week to some stockbrokers in Washington DC about index option trading. I had the opportunity to meet with brokers from all over the world that "bet the market," and project and analyze.
They heard me for 30 minutes teach:
*False facts
*A rock is not hard
*Most financial statements are false
*The mood of the public is paramount to the mood of the market
The major question I had during this speech was around "how to project financials for future earnings." As you know, this is what half the talking head analysts do as they "chart" the future.
My answer was seriously listened to, and I'll repeat it:
"No company in 2009 can make long term financial business plan projections beyond one year. Too much in the world is changing. Looking at 'three year growth patterns' or what a company projects is much like fishing in a river that has poisoned and has few fish." I shut them up with their questions with this:
1. Years ago AOL owned the internet. It is now broke. Who would have seen that so many idiots could have mismanaged a business that had a 86% market share
2. Who would have guessed that Green Mountain Coffee would rise 190% while Starbucks, missing the change in the environment, dropped dramatically. Both had business plans that analysts had defined as "sound"; in fact, Green Mountain got a "watch" read from Goldman Sachs while Starbucks got a "strong buy." Interesting, the reversed happened.
The conspiracists will have a field day: was Sachs manipulating the market to short and hold calls on both instruments. You bet. And guess who won the biggest?
While in Washington I heard the babble brought on by the GOP on "Obamanation" and the false facts on "socialized medicine" or "how can we control the right of people to earn money". These were stockbrokers, of course, who benefit when United Healthcare et al rise 428% in profits in 10 years, and will not benefit when costs are controlled and contained by competition. We have no competition or free trade in ANY way in the health care industry, and those that believe that our costs will be driven up are using false facts to analyze WHAT NO ONE CAN EVEN BEGIN to conjecture about. We only know that typically when competition lowers price (aka Wal-Mart) that others are forced to find ways to be more competitive.
During the Bush reign we never saw the dead bodies coming in from Iraq. This was on purpose. It helped us hide from it.
During the Bush reign we heard about the thriving economy for years, but it thrived ONLY in the homebuilding industry, which created more than half of the jobs that gave us lowered unemployment.
Few thought out "what happens when the bubble breaks?"
I left our great capital saddened by the tears of the public caught in the newsbites that lead us to believe what is not even true, or even partway true.
I ended my speech with the kicker: "The market is up because of the stimulus, and the need for something 'good' to lead us first. And, if we do not control Wall Street again the same thing will occur, and this time it will be our fault. A President, even Bush , does not do this. Congress does. You do. You do by your thinking, your vote, and your standing up for real facts.
What person in their right mind thinks that this country could be turned around from 8 years of lies in a 10 month period? I smile at our innocence or our stupidity. I'm not sure which.
Nothing we could have done, by the way, when the bank fraud was finally 'admitted' would have been the perfect answer. We have 540 men and women (Congress) daily influenced by lobbyists, all whom represent special interests. This has been taking place since our Government was first formed, but is now in a state of pure corruption. It takes a village....you know the line. The doomsayers of 'socialism' make me smile, as Obama only represents the majority of the country, and unemployment rates are part of companies ready to return record profits (study the earnings) by simply having fewer people.
Do not for a minute think that free enterprise truly works. Wal Mart is a perfect example, having grown successfully, by filling huge buildings with goods from China, at low prices, and we buy them.
Thousands of businesses have closed because of this 'free enterprise.' It's not wrong, it's simply to show us that 'all is not as it appears.'"
________
Back to the market. Study our new Dow projections, as we have a two way possibility:
1. The market will continue another run to 10,167 before consolidating again to 9800
2. The market will slowly build to 10,256 and the last consolidation is over.
We'll give only a one way day trade today, sell before the weekend.
Saturday, October 31, 2009
Friday, October 30, 2009
Thought I Would Share
Thought I would share the following document with you as you progressed in my ongoing argument for downside. Yesterday the Dow hit a theoretical low of 9744, which exceeds our 586 point average move over a 21 day period. Sure enough, the market dropped and the November 490 Put , an "option I fell in love with" hit highs of 12.73 before the 3 p.m.. hour. Available as low as 9.50 for the day, and with many traders, we'll close out our position with this put with many traders reporting 5 to 15 actual day or two day trades on this signal over the past weeks.
I've stuck to my guns downside, as logic will always "just for a moment" prevail.
So, read this article I wrote a few days ago:
Much has been make about Dow 10,000 last week, but technicians may want to focus about 500 points higher instead. The chart below shows Volume-by-Price for the Dow Industrials. Notice that the longest bar is around 10500-11000. This represents a potential resistance zone in the coming weeks or months.
Oct. 27 (Bloomberg) -- Investors worldwide are borrowing dollars to buy assets including equities and commodities, fueling “huge” bubbles that may spark another financial crisis, said New York University professor Nouriel Roubini.
“We have the mother of all carry trades,” Roubini, who predicted the banking crisis that spurred more than $1.6 trillion of asset writedowns and credit losses at financial companies worldwide since 2007, said via satellite to a conference in Cape Town, South Africa. “Everybody’s playing the same game and this game is becoming dangerous.”
The dollar has dropped 12 percent in the past year against a basket of six major currencies as the Federal Reserve, led by Chairman Ben S. Bernanke, cut interest rates to near zero in an effort to lift the U.S. economy out of its worst recession since the 1930s. Roubini said the dollar will eventually “bottom out” as the Fed raises borrowing costs and withdraws stimulus measures including purchases of government debt. That may force investors to reverse carry trades and “rush to the exit,” he said.
“The risk is that we are planting the seeds of the next financial crisis,” said Roubini, chairman of New York-based research and advisory service Roubini Global Economics. “This asset bubble is totally inconsistent with a weaker recovery of economic and financial fundamentals.”
‘Wall of Liquidity’
The MSCI World Index of advanced-nation equities has surged 65 percent from this year’s low on March 9, while the MSCI Emerging Markets Index has jumped 96 percent. The Reuters/Jefferies CRB Index of 19 commodities has added 33 percent.
Roubini said he sees a bubble in emerging-market equities and that gains in some developing-nation currencies are becoming “excessive.” The rally in oil “is not justified by the fundamentals,” he said.
An asset “bust” may not occur for another year or two as a “wall of liquidity” pushes prices higher, Roubini said. In a carry trade, investors borrow in countries with low interest rates to invest in higher-yielding assets.
Roubini said the U.S. recession seems to be over, though the economic recovery in advanced nations will be “anemic.” He’s “more optimistic” on the outlook for emerging-nation growth.
The U.S. economy probably expanded at a 3.2 percent pace from July through September after shrinking the previous four quarters, according to the median estimate of 65 economists surveyed by Bloomberg News before the Commerce Department’s report on gross domestic product due Oct. 29.
Roubini on Stocks
The economy shrank 3.8 percent in the 12 months to June, the worst performance in seven decades.
Roubini’s July 2006 warning about the financial crisis protected investors from losses in the Standard & Poor’s 500 Index’s worst annual tumble in seven decades. The U.S. equity benchmark has surged 58 percent from a 12-year low in March even as Roubini said that month the advance was a “dead-cat bounce,” that it may “fizzle” in May and warned in July that the economy is “not out of the woods.”
___________
Here's some commentary between a subscriber and myself on my predictions about the sell off. My comments are in bold:
> Hey brother..
>
> I am amazed at how you called the downside this week.
>
> I am also kicking myself that I did not purchase the 490 put on Friday of last week for 4.50 and then again on Monday for 5.50...She was over 12.00 a few minutes ago...unbelieveable...
>
> I've got some questions for you...
>
> Since you were "certain" of downside this week and being that we were so overbought...can you share with us how you specifically traded the put signal because I know that you sometimes hold out for bottoms or tops of your DOW projections and sometimes you grab your profits and get out...
The market struggles at 000's. I bought and sold the 490 11 times in the past 5 days.
>
> I sense that this week you held out one position for large profits while you scalped other positions using another account...or maybe you purchased another strike price as well and held one longer than the other...did you do something like that?
Always the same strike
>
> Also, I noticed that when the DOW hit 9800 (magic number and good support)...the market bounced nice...giving a trader an opportunity to grab and easy .70 on the 495 call...would you or did you play something like this too?
Absolutely.
>
> I love it when you share with us how you specificaly played the market...it helps me develop strategies in the future...
>
> Anyway, nice job again on the signals this week...you were right on...
I've stuck to my guns downside, as logic will always "just for a moment" prevail.
So, read this article I wrote a few days ago:
Much has been make about Dow 10,000 last week, but technicians may want to focus about 500 points higher instead. The chart below shows Volume-by-Price for the Dow Industrials. Notice that the longest bar is around 10500-11000. This represents a potential resistance zone in the coming weeks or months.
Oct. 27 (Bloomberg) -- Investors worldwide are borrowing dollars to buy assets including equities and commodities, fueling “huge” bubbles that may spark another financial crisis, said New York University professor Nouriel Roubini.
“We have the mother of all carry trades,” Roubini, who predicted the banking crisis that spurred more than $1.6 trillion of asset writedowns and credit losses at financial companies worldwide since 2007, said via satellite to a conference in Cape Town, South Africa. “Everybody’s playing the same game and this game is becoming dangerous.”
The dollar has dropped 12 percent in the past year against a basket of six major currencies as the Federal Reserve, led by Chairman Ben S. Bernanke, cut interest rates to near zero in an effort to lift the U.S. economy out of its worst recession since the 1930s. Roubini said the dollar will eventually “bottom out” as the Fed raises borrowing costs and withdraws stimulus measures including purchases of government debt. That may force investors to reverse carry trades and “rush to the exit,” he said.
“The risk is that we are planting the seeds of the next financial crisis,” said Roubini, chairman of New York-based research and advisory service Roubini Global Economics. “This asset bubble is totally inconsistent with a weaker recovery of economic and financial fundamentals.”
‘Wall of Liquidity’
The MSCI World Index of advanced-nation equities has surged 65 percent from this year’s low on March 9, while the MSCI Emerging Markets Index has jumped 96 percent. The Reuters/Jefferies CRB Index of 19 commodities has added 33 percent.
Roubini said he sees a bubble in emerging-market equities and that gains in some developing-nation currencies are becoming “excessive.” The rally in oil “is not justified by the fundamentals,” he said.
An asset “bust” may not occur for another year or two as a “wall of liquidity” pushes prices higher, Roubini said. In a carry trade, investors borrow in countries with low interest rates to invest in higher-yielding assets.
Roubini said the U.S. recession seems to be over, though the economic recovery in advanced nations will be “anemic.” He’s “more optimistic” on the outlook for emerging-nation growth.
The U.S. economy probably expanded at a 3.2 percent pace from July through September after shrinking the previous four quarters, according to the median estimate of 65 economists surveyed by Bloomberg News before the Commerce Department’s report on gross domestic product due Oct. 29.
Roubini on Stocks
The economy shrank 3.8 percent in the 12 months to June, the worst performance in seven decades.
Roubini’s July 2006 warning about the financial crisis protected investors from losses in the Standard & Poor’s 500 Index’s worst annual tumble in seven decades. The U.S. equity benchmark has surged 58 percent from a 12-year low in March even as Roubini said that month the advance was a “dead-cat bounce,” that it may “fizzle” in May and warned in July that the economy is “not out of the woods.”
___________
Here's some commentary between a subscriber and myself on my predictions about the sell off. My comments are in bold:
> Hey brother..
>
> I am amazed at how you called the downside this week.
>
> I am also kicking myself that I did not purchase the 490 put on Friday of last week for 4.50 and then again on Monday for 5.50...She was over 12.00 a few minutes ago...unbelieveable...
>
> I've got some questions for you...
>
> Since you were "certain" of downside this week and being that we were so overbought...can you share with us how you specifically traded the put signal because I know that you sometimes hold out for bottoms or tops of your DOW projections and sometimes you grab your profits and get out...
The market struggles at 000's. I bought and sold the 490 11 times in the past 5 days.
>
> I sense that this week you held out one position for large profits while you scalped other positions using another account...or maybe you purchased another strike price as well and held one longer than the other...did you do something like that?
Always the same strike
>
> Also, I noticed that when the DOW hit 9800 (magic number and good support)...the market bounced nice...giving a trader an opportunity to grab and easy .70 on the 495 call...would you or did you play something like this too?
Absolutely.
>
> I love it when you share with us how you specificaly played the market...it helps me develop strategies in the future...
>
> Anyway, nice job again on the signals this week...you were right on...
Wednesday, October 28, 2009
Fruit Vendor Trading
We saw hesitancy. The theoretical Dow hit 9987, not crossing 10,000, while dropping to 9798. New buys were possible on our open November 490P, it hit highs of 10.30 for those already holding, and was available as low as 8.20 for a first buy.
Anything could now move the market, but oil earnings come out this week for the giants, and they will be bleak. We'll hold only a position to the put for the time being.
Many of our new traders read our OEX Manual, and study our Support/Resistance lines and write me often about "following the exact rules." I do not believe that anything in the world is absolute, that a rock is not hard (we only know what we know) and that even a trading system cannot be "absolute," but must have flexibility and intuition built in. The market breathes, and itself only follows rules "to a point."
What certain "types of personalities" do is key. At Level 3 and Advanced Mentoring we offer a Myers Brigg psychological test that I score, and it helps identify "traits" in your personality that you can watch for.
For some obvious examples:
*An "introverted" "engineer" "type" will want absolutes, and black and white.
*An "extroverted and "emotional" "type" will thrive more on risk, often too much risk, and break rules
*The "type of person" that "knows" what "should be" will have difficulty "fighting with themselves" over what is, not what should be.
*The personality type that "suffers" will potentially subconsciously sabotage their own successes, based on their own self fulfilling prophecy that they have "bad luck".
*Those types that "name" things (Obama is a socialist), or "freedom is being taken away" will struggle with false facts, the leading cause of failure in trading.
Many "believe" what they read or more sadly "listen to" on radio and TV and without any investigation or analysis of what the "definition" is will struggle with "black and white."
Smart traders know that a "rock is not hard," and know that facts are often not facts, but "half done" pieces of information.
As you trade, it is key you question facts, not get caught in "defining" what is occurring (as we as a public never have ALL the facts), and have a basic question about EVERYTHING.
For example, when town hall meetings became "screaming fits" was this the American people speaking out, or was it American people being misled with false information, thusly resulting in more bi-partisanship?
Did this truly represent the country, or did it disrupt our country?
How did this affect the stock market? (Suggestion: something must get better, and the market leads the economy, so we will buy stocks and not be "left out.")
Trader MR wrote me last weekend to share his successes in "fruit vendor trading" on the OEX:
>> I found some excellent material on the human mind that were infinitely enlightening when compared to the trading experience. I'll be summarizing sometime this week as a follow up to the "what trading means to me" (WTMTM)commentary.
>>
>> My laptop contracted a virus last week; I've been less prolific in my communication, and this doesn't count as my "official" WTMTM reply email :)
>>
>> A general comment though, it was a great week to trade wasn't it? 5/5 on OEX trades all returning 10% per trade. My trading portfolio is up about 4% in a week when the DOW was flat to declining, still holding an open GLD call (that I opened on my own advice).
>>
>> I started to actually follow the rules this month - with the exception of the first trade of October. I am 11/15 for the month and I saw that when I actually follow the rules: trade at S/R, make 2nd buys wisely, don't overbuy and break the rules due to fear of losing a large % of the portfolio --- it all works together.
>>
>> I am looking forward to sharing the data I found. I believe it can be truly helpful in daily trading.
>>
>> Fruit Vendor MR
Anything could now move the market, but oil earnings come out this week for the giants, and they will be bleak. We'll hold only a position to the put for the time being.
Many of our new traders read our OEX Manual, and study our Support/Resistance lines and write me often about "following the exact rules." I do not believe that anything in the world is absolute, that a rock is not hard (we only know what we know) and that even a trading system cannot be "absolute," but must have flexibility and intuition built in. The market breathes, and itself only follows rules "to a point."
What certain "types of personalities" do is key. At Level 3 and Advanced Mentoring we offer a Myers Brigg psychological test that I score, and it helps identify "traits" in your personality that you can watch for.
For some obvious examples:
*An "introverted" "engineer" "type" will want absolutes, and black and white.
*An "extroverted and "emotional" "type" will thrive more on risk, often too much risk, and break rules
*The "type of person" that "knows" what "should be" will have difficulty "fighting with themselves" over what is, not what should be.
*The personality type that "suffers" will potentially subconsciously sabotage their own successes, based on their own self fulfilling prophecy that they have "bad luck".
*Those types that "name" things (Obama is a socialist), or "freedom is being taken away" will struggle with false facts, the leading cause of failure in trading.
Many "believe" what they read or more sadly "listen to" on radio and TV and without any investigation or analysis of what the "definition" is will struggle with "black and white."
Smart traders know that a "rock is not hard," and know that facts are often not facts, but "half done" pieces of information.
As you trade, it is key you question facts, not get caught in "defining" what is occurring (as we as a public never have ALL the facts), and have a basic question about EVERYTHING.
For example, when town hall meetings became "screaming fits" was this the American people speaking out, or was it American people being misled with false information, thusly resulting in more bi-partisanship?
Did this truly represent the country, or did it disrupt our country?
How did this affect the stock market? (Suggestion: something must get better, and the market leads the economy, so we will buy stocks and not be "left out.")
Trader MR wrote me last weekend to share his successes in "fruit vendor trading" on the OEX:
>> I found some excellent material on the human mind that were infinitely enlightening when compared to the trading experience. I'll be summarizing sometime this week as a follow up to the "what trading means to me" (WTMTM)commentary.
>>
>> My laptop contracted a virus last week; I've been less prolific in my communication, and this doesn't count as my "official" WTMTM reply email :)
>>
>> A general comment though, it was a great week to trade wasn't it? 5/5 on OEX trades all returning 10% per trade. My trading portfolio is up about 4% in a week when the DOW was flat to declining, still holding an open GLD call (that I opened on my own advice).
>>
>> I started to actually follow the rules this month - with the exception of the first trade of October. I am 11/15 for the month and I saw that when I actually follow the rules: trade at S/R, make 2nd buys wisely, don't overbuy and break the rules due to fear of losing a large % of the portfolio --- it all works together.
>>
>> I am looking forward to sharing the data I found. I believe it can be truly helpful in daily trading.
>>
>> Fruit Vendor MR
Tuesday, October 27, 2009
It Will Be Interesting
Of course, the market opened with an exhaustive gap up to 10,100 theoretical Dow by 10 a.m., and then began hesitating. This was the perfect day for trading,as we saw light futures, no bias, and traders were able to buy the Nov 490P at best buy of 5.20, to highs of 10.00 by early afternoon. This was an easy trade. At the same time, traders had no time to enter on the call, as it rose in a fast gap up, and held.
Yesterday was the perfect OEX profit, with every rule intact! Returns of 40% plus were easy.
It might be harder today. There are struggles at 9800, but the market wants to go much lower. Earnings should look good for many reporting, and housing starts may appear falsely "up."
It will be interesting to see if the consolidation will hold.
Many market makers believe the market is now not only oversold, but overpriced, and that equities will suffer, despite what have been good earnings so far. Part of this is that Wall Street and companies set easy earning expectations because of the financial debacle, but earning analysts are now "pricing performance, not just cutbacks" into their future earnings projections.
The bottom line: this will make it harder for companies living on their growth by "restructuring" to sustain that growth, and that earnings expectations will be much higher.
Long term trader Bill D is actively studying and analyzing with us, and I have been attaching many of his charts recently. Here's how this Advanced Mentoring student is thinking and working:
"This all started because I wanted to keep track of the count from day to day on a number of strikes. Your bell curve analysis is based on the $2-3 option. Well since that changes from day to day and you need data from 3 days prior I figured I'd keep it in a spreadsheet and update daily. Takes all of 3 minutes I think. I use "Thinkorswim" nice platform.
Well just for shiggles I decided to throw it on a chart to see what it looked like. Followed it a couple days and decided to share.
My first thought is, the 475 put stuck out like a sore thumb the day before the big afternoon selloff. Could this be a leading indicator by identifying a strike that is becoming active?
Why/how does your count system work, because of demand. Logic will show, well the math will show that based on the bell curve count parameters demand "should" create an increase in price and the count method should indentify the most demand for an issue because it happens over a number of days. The proprietary systems identify most actives on a daily basis. I think the count system takes that a step further by using the 3 previous days close its not a one and done thing it is a potential trend.
By tracking all strikes on both sides the $2 option is always on the chart.
So first off, we can identify a specific strike in a string that is increasing in daily closing price.
Next is the bias. The day after option expiration both chains were flat although the calls were running on the 6 line and the puts were running on the 3 line, which indicated to me that there wasn't a clear bias either way but something might be up. It also might have been because of option expiration. Don't know that one yet.
The next two days were where the movement was and when the 475 Put started to show its bias and a possible change in the short term trend. The markets ended down for the week and the put string was running a higher count than the call string.
The one thing I've noticed when copying the data is the put prices are usually more uniform than the call prices.
I think it is just another way to identify the most active issue in the string. The caveot is the bias. We'll see how this works, need more time."
Yesterday was the perfect OEX profit, with every rule intact! Returns of 40% plus were easy.
It might be harder today. There are struggles at 9800, but the market wants to go much lower. Earnings should look good for many reporting, and housing starts may appear falsely "up."
It will be interesting to see if the consolidation will hold.
Many market makers believe the market is now not only oversold, but overpriced, and that equities will suffer, despite what have been good earnings so far. Part of this is that Wall Street and companies set easy earning expectations because of the financial debacle, but earning analysts are now "pricing performance, not just cutbacks" into their future earnings projections.
The bottom line: this will make it harder for companies living on their growth by "restructuring" to sustain that growth, and that earnings expectations will be much higher.
Long term trader Bill D is actively studying and analyzing with us, and I have been attaching many of his charts recently. Here's how this Advanced Mentoring student is thinking and working:
"This all started because I wanted to keep track of the count from day to day on a number of strikes. Your bell curve analysis is based on the $2-3 option. Well since that changes from day to day and you need data from 3 days prior I figured I'd keep it in a spreadsheet and update daily. Takes all of 3 minutes I think. I use "Thinkorswim" nice platform.
Well just for shiggles I decided to throw it on a chart to see what it looked like. Followed it a couple days and decided to share.
My first thought is, the 475 put stuck out like a sore thumb the day before the big afternoon selloff. Could this be a leading indicator by identifying a strike that is becoming active?
Why/how does your count system work, because of demand. Logic will show, well the math will show that based on the bell curve count parameters demand "should" create an increase in price and the count method should indentify the most demand for an issue because it happens over a number of days. The proprietary systems identify most actives on a daily basis. I think the count system takes that a step further by using the 3 previous days close its not a one and done thing it is a potential trend.
By tracking all strikes on both sides the $2 option is always on the chart.
So first off, we can identify a specific strike in a string that is increasing in daily closing price.
Next is the bias. The day after option expiration both chains were flat although the calls were running on the 6 line and the puts were running on the 3 line, which indicated to me that there wasn't a clear bias either way but something might be up. It also might have been because of option expiration. Don't know that one yet.
The next two days were where the movement was and when the 475 Put started to show its bias and a possible change in the short term trend. The markets ended down for the week and the put string was running a higher count than the call string.
The one thing I've noticed when copying the data is the put prices are usually more uniform than the call prices.
I think it is just another way to identify the most active issue in the string. The caveot is the bias. We'll see how this works, need more time."
Monday, October 26, 2009
Purveyors of Hate
It's almost fun. We saw Friday again run to a 10,140 high, and a 9892 low, in the same whipsaw pattern we've seen for days, with the exception that the market CLOSED more dramatically down.
Our OTM 520 day trade call was profitable only to .40 per contract, yet traders on the November 490P were able to buy as low as 4.60 and sell to highs of 7.80. Numerous traders wrote us notes on what Friday was, but I'll give you the funniest to start your week:
Sometimes when I am stupid I make the most! I smelled the downside, and put a pre-order on the put in at 4.80. I had to leave for a few hours, and then my car broke down,but I had learned from Floyd to "never leave without a sell order in" so I (thinking I would be back in a couple hours) put a sell in at 7.60. I had planned to return to do a second larger buy, and had bought 15 contracts for my opening. So I returned home after the car disaster to see my order filled at 7.60. The math is incredible. I made $4500.00! I had been profitable on all calls this past week, being smart, and had a week with total profits of over 8200.00. WOW! MDL, New Orleans
Here's how I see the market:
1. We need a healthy consolidation to allow more upturn. Each upturn we have without effective consolidation (and there have been TOO many) is not a bull market, but a euphoric market, and historically always leads to larger falls.
2. Over 106 banks have closed. This is serious stuff.
3. Wall Street was FIRST bailed out by President Bush, and as the magnitude of the fraud became clear, then bailed out by Obama. The Bush/Paulson 585 billion was a game to pay off the boys that helped them. It slowed the crisis, but the next bail out was to save our nation from financial ruin. Sadly, no regulations have been put in (Congress leads this) and we're seeing new Wall Street games that the GOP boys claim is socialistic to "stop the earnings."
Sorry, but with earnings to Wall Street slime now exceeding prior massive earnings, we are in process of allowing greed to take over our nation, while we "fret" that Obama does not understand the high unemployment issue.
Sigh.
4. With healthy consolidation I believe the market will rebound again, and that 10,700 is a Fibonnacci retracement from our deepest bottom earlier this year, and MAY be a stopping point. In other words, with retracements so far following Fibbonanci to the T, we may have euphorically led ourselves to a top that could easily disintegrate, and lead to a deeper downturn. Much will depend upon whether the HATE in the nation can be calmed, as we have built a fervor over "obamanation", bullshit on socialism, etc., and of course, led to even more bi-partisanship in the country.
5. Glenn Beck and Rush the idiot lead much of the nation. This will influence group intelligence. Pay attention to their rants, as some actually believe this stuff. Sorry, conservatives, but these men are not conservatives, but purveyors of hate.
Our OTM 520 day trade call was profitable only to .40 per contract, yet traders on the November 490P were able to buy as low as 4.60 and sell to highs of 7.80. Numerous traders wrote us notes on what Friday was, but I'll give you the funniest to start your week:
Sometimes when I am stupid I make the most! I smelled the downside, and put a pre-order on the put in at 4.80. I had to leave for a few hours, and then my car broke down,but I had learned from Floyd to "never leave without a sell order in" so I (thinking I would be back in a couple hours) put a sell in at 7.60. I had planned to return to do a second larger buy, and had bought 15 contracts for my opening. So I returned home after the car disaster to see my order filled at 7.60. The math is incredible. I made $4500.00! I had been profitable on all calls this past week, being smart, and had a week with total profits of over 8200.00. WOW! MDL, New Orleans
Here's how I see the market:
1. We need a healthy consolidation to allow more upturn. Each upturn we have without effective consolidation (and there have been TOO many) is not a bull market, but a euphoric market, and historically always leads to larger falls.
2. Over 106 banks have closed. This is serious stuff.
3. Wall Street was FIRST bailed out by President Bush, and as the magnitude of the fraud became clear, then bailed out by Obama. The Bush/Paulson 585 billion was a game to pay off the boys that helped them. It slowed the crisis, but the next bail out was to save our nation from financial ruin. Sadly, no regulations have been put in (Congress leads this) and we're seeing new Wall Street games that the GOP boys claim is socialistic to "stop the earnings."
Sorry, but with earnings to Wall Street slime now exceeding prior massive earnings, we are in process of allowing greed to take over our nation, while we "fret" that Obama does not understand the high unemployment issue.
Sigh.
4. With healthy consolidation I believe the market will rebound again, and that 10,700 is a Fibonnacci retracement from our deepest bottom earlier this year, and MAY be a stopping point. In other words, with retracements so far following Fibbonanci to the T, we may have euphorically led ourselves to a top that could easily disintegrate, and lead to a deeper downturn. Much will depend upon whether the HATE in the nation can be calmed, as we have built a fervor over "obamanation", bullshit on socialism, etc., and of course, led to even more bi-partisanship in the country.
5. Glenn Beck and Rush the idiot lead much of the nation. This will influence group intelligence. Pay attention to their rants, as some actually believe this stuff. Sorry, conservatives, but these men are not conservatives, but purveyors of hate.
Friday, October 23, 2009
We Lived Big
More on "what I get from trading":
1. Floyd:
> Before I get into "what I get out of trading" I need to provide you with the background of "why" I trade. I started my career on Wall Street 25 years ago. During that time I held various positions within an investment banking environment while obtaining a masters degree and law degree at night. When I completed my law degree, I had the opportunity to work in an emerging field know as Swaps. While derivatives such options had been around for a long time, Swaps were just becoming a "commoditized" product. Despite my vast knowledge of derivatives, I remained a "buy and hold" mutual fund investor, content to take the easy "random walk down Wall Street." However, life was progressing nicely and I was doing well professionally and financially.
> Then from out of nowhere my life began to quickly unravel. Shortly after my smart and beautiful daughter started high school her behavior, personality, and appearance made a disturbing change. Her mood and appearance became suddenly dark and withdrawn. Athletics fell by the wayside. Self confidence plummeted. She became withdrawn and prone to violent outbursts that injured herself and others and caused damage to home. Our life was on the edge every day and it was clear that our daughter was tormented in some way that even had professional therapists baffled. After two years of turmoil my wife and I were resigned to institutionalizing my daughter.
> Then we found a boarding school in Maine called the Hyde School. It is not a typical high school because if focuses on character, integrity,courage, leadership and concern for others. The motto of the school is "Every individual is gifted with a unique potential" and each student is challenged in many ways to discover their own unique potential. Parents are challenged in the same way as their children to discover their own unique potential through the school's parent education program. Critical self evaluation and reflection are key components of Hyde's program, but most important are the selfless staff and teachers at Hyde. They are truly dedicated to helping each child and their parents find their unique place in world.
> To make a long story short, the Hyde School has turned my entire family's life around. After three years at Hyde my daughter has re-emerged as the smart, caring and beautiful girl that I remember and always hoped she would be. She is in the process of applying to college as a special education major, hoping to make a difference in the lives of autistic and downs syndrome children.
> And I am trading. After the meltdown last September I saw my retirement savings reduced by 50%. With many years of experience in financial markets and derivatives it was time to take matters into my own hands. I liquidated all of my mutual fund investments and started trading. Awkwardly and without much of a plan at first; but then refining, studying and having the humility to look for and ask for help. That is how I found you and OEX options Floyd, and I am truly grateful for your teachings. However, it was Hyde that gave me the courage to trust in myself, my talents and my potential to take the first steps. I am still learning and I still make mistakes. I try to reflect and lean by those mistakes. Overall, however, I am profitable. When I trade I set a certain portion of my profits aside for the Hyde school. I want to be able to help the Hyde school reach the families and children who are desperate to turn their lives around, just as Hyde has helped me and my family. So my trading is in part a recognition of my unique potential and in part a tribute to getting my daughter back.
> Thank you for asking this question. It helps to remind me why I am trading when fear and greed muddy the waters.
2.. I trade to learn to control my emotions. It is a game of zen, where I beat the bid/ ask by manipulating the other people buying and selling. I do nothing but this, and feel relaxed when I am trading, like a great big poker game.
GER
3. And from trader Johnny, who we tributed:
I got home from the hospital yesterday and my surgery has been rescheduled for this coming Monday provided the infections have been eliminated.
The tribute to our friendship brought me to tears, and I would like to call you whenever it is a good time for you.
I hope Jenn is finding that inner strength to help her move through the emotions that have been stirred in her heart and mind as a result of the breakup between her and her boyfriend. I'm confident that with your loving guidance she will find that foundation of true inner knowing that this is a test for her, and that she can and will overcome the emotional upheaval and be a stronger individual afterwards.
Thank you for being my friend!
Johnny
______________________________
The market yesterday went from a low of 9874 theoretical Dow to a high of 10,145. Read our Dow projections carefully. Call traders bought the Oct 520Call as low, easily, as 2.25 and sold to highs of 3.60 by simply following resistance and support lines. We were profitable on calls again today.
We also believe the market is now "nuts" and reaction could follow.
__________________________________________
It is a sad fact that the outpouring of government money has not staunched the job hemorrhaging or loosened credit to the struggling small business owner or shut off the surge in foreclosures.
The outpouring of FED dollars is what I was most afraid of, that it was not enough. I know most of the nation is now fearful of deficit, and the money being spent. I find it surprising that the deficit created by Emperor Bush is never mentioned, still part of our deficit now,as we continue failing in our overseas Iraqi effort.
We have been forced to the worst reality of our lives. We lived big, got big, and now expect not to pay for it. Or, sillier yet, we believe the "private sector" and capitalism left alone will right the system.
I refer you to Goldman Sachs record profits as the answer. What private sector? I know the small businesses that are the mainstay of America and they are NOT doing well. Credit is tightened, business is down , and they do not have jobs to give.
Last week consulting I bankrupted a firm, and a new firm bought the employees. I led this. I hired jobs, and lowered salaries of staff by 23% average for their taking a new job, and ALL 7 employees offered the jobs took them.
I lowered wages because of the low margins of the business (competitive market created by FEAR) and the inability for the new business to establish a large enough credit line, despite 38 years in business.
We blame the government for the situation, yet in actuality, it is the businesses finding they can pay less, they can use people more, and they can "make do."
1. Floyd:
> Before I get into "what I get out of trading" I need to provide you with the background of "why" I trade. I started my career on Wall Street 25 years ago. During that time I held various positions within an investment banking environment while obtaining a masters degree and law degree at night. When I completed my law degree, I had the opportunity to work in an emerging field know as Swaps. While derivatives such options had been around for a long time, Swaps were just becoming a "commoditized" product. Despite my vast knowledge of derivatives, I remained a "buy and hold" mutual fund investor, content to take the easy "random walk down Wall Street." However, life was progressing nicely and I was doing well professionally and financially.
> Then from out of nowhere my life began to quickly unravel. Shortly after my smart and beautiful daughter started high school her behavior, personality, and appearance made a disturbing change. Her mood and appearance became suddenly dark and withdrawn. Athletics fell by the wayside. Self confidence plummeted. She became withdrawn and prone to violent outbursts that injured herself and others and caused damage to home. Our life was on the edge every day and it was clear that our daughter was tormented in some way that even had professional therapists baffled. After two years of turmoil my wife and I were resigned to institutionalizing my daughter.
> Then we found a boarding school in Maine called the Hyde School. It is not a typical high school because if focuses on character, integrity,courage, leadership and concern for others. The motto of the school is "Every individual is gifted with a unique potential" and each student is challenged in many ways to discover their own unique potential. Parents are challenged in the same way as their children to discover their own unique potential through the school's parent education program. Critical self evaluation and reflection are key components of Hyde's program, but most important are the selfless staff and teachers at Hyde. They are truly dedicated to helping each child and their parents find their unique place in world.
> To make a long story short, the Hyde School has turned my entire family's life around. After three years at Hyde my daughter has re-emerged as the smart, caring and beautiful girl that I remember and always hoped she would be. She is in the process of applying to college as a special education major, hoping to make a difference in the lives of autistic and downs syndrome children.
> And I am trading. After the meltdown last September I saw my retirement savings reduced by 50%. With many years of experience in financial markets and derivatives it was time to take matters into my own hands. I liquidated all of my mutual fund investments and started trading. Awkwardly and without much of a plan at first; but then refining, studying and having the humility to look for and ask for help. That is how I found you and OEX options Floyd, and I am truly grateful for your teachings. However, it was Hyde that gave me the courage to trust in myself, my talents and my potential to take the first steps. I am still learning and I still make mistakes. I try to reflect and lean by those mistakes. Overall, however, I am profitable. When I trade I set a certain portion of my profits aside for the Hyde school. I want to be able to help the Hyde school reach the families and children who are desperate to turn their lives around, just as Hyde has helped me and my family. So my trading is in part a recognition of my unique potential and in part a tribute to getting my daughter back.
> Thank you for asking this question. It helps to remind me why I am trading when fear and greed muddy the waters.
2.. I trade to learn to control my emotions. It is a game of zen, where I beat the bid/ ask by manipulating the other people buying and selling. I do nothing but this, and feel relaxed when I am trading, like a great big poker game.
GER
3. And from trader Johnny, who we tributed:
I got home from the hospital yesterday and my surgery has been rescheduled for this coming Monday provided the infections have been eliminated.
The tribute to our friendship brought me to tears, and I would like to call you whenever it is a good time for you.
I hope Jenn is finding that inner strength to help her move through the emotions that have been stirred in her heart and mind as a result of the breakup between her and her boyfriend. I'm confident that with your loving guidance she will find that foundation of true inner knowing that this is a test for her, and that she can and will overcome the emotional upheaval and be a stronger individual afterwards.
Thank you for being my friend!
Johnny
______________________________
The market yesterday went from a low of 9874 theoretical Dow to a high of 10,145. Read our Dow projections carefully. Call traders bought the Oct 520Call as low, easily, as 2.25 and sold to highs of 3.60 by simply following resistance and support lines. We were profitable on calls again today.
We also believe the market is now "nuts" and reaction could follow.
__________________________________________
It is a sad fact that the outpouring of government money has not staunched the job hemorrhaging or loosened credit to the struggling small business owner or shut off the surge in foreclosures.
The outpouring of FED dollars is what I was most afraid of, that it was not enough. I know most of the nation is now fearful of deficit, and the money being spent. I find it surprising that the deficit created by Emperor Bush is never mentioned, still part of our deficit now,as we continue failing in our overseas Iraqi effort.
We have been forced to the worst reality of our lives. We lived big, got big, and now expect not to pay for it. Or, sillier yet, we believe the "private sector" and capitalism left alone will right the system.
I refer you to Goldman Sachs record profits as the answer. What private sector? I know the small businesses that are the mainstay of America and they are NOT doing well. Credit is tightened, business is down , and they do not have jobs to give.
Last week consulting I bankrupted a firm, and a new firm bought the employees. I led this. I hired jobs, and lowered salaries of staff by 23% average for their taking a new job, and ALL 7 employees offered the jobs took them.
I lowered wages because of the low margins of the business (competitive market created by FEAR) and the inability for the new business to establish a large enough credit line, despite 38 years in business.
We blame the government for the situation, yet in actuality, it is the businesses finding they can pay less, they can use people more, and they can "make do."
Thursday, October 22, 2009
What Do You Get Out Of Trading?
Some answers to my homework question:
1. What do you get out of trading?
first, thanks for asking this question...once you put things on paper you can't hide from them anymore...while it is embarrassing, i have to admit, i truly believed there was a "Holy Grail" trading system that would solve all my "problems". so much so that i have spent a small fortune and almost two decades looking for the "perfect" system that would satisfy my desire for success (at an endeavor that very few individuals have true success at) and overpower an obvious strong fear of failure...so what do i get out of trading?...a long and currently positive self-assessment and re-evaluation of my entire thought process, belief systems and limiting behaviors. my only wish (regret?) is the length of time and the "tuition" associated with the countless newsletters, seminars, home study courses (audio tapes, vhs tapes, cd's dvd's, webinars, etc.), software programs, data services, computers, brokers, personal conversations with several traders who wrote books, funny looks and head shaking from my wife, etc. has led me to finally realize that no amount of money can buy an "outside solution" to overcome an "inside problem"...my account balance truly does reflect my success at releasing these inner limiting programs...why did it take so long and cost so much in terms of time, money and frustration?...pick your saying..."when the student is ready, the teacher will appear"..."a problem can't be solved with the same thinking that created it"...or my current favorite..."Duh"
jmp
2. Great question Floyd...
My initial response to the question "What do I get out of trading?" was FRUSTRATED...ANGRY...IRRITABLE...GREEDY....FEARFUL....ARROGANT......PRIDEFUL.......SELFISH... DISTRACTED.....AND SHAME.
I become frustrated with myself for not taking profits when I should. I then allow the frustration to turn into self-hatred (anger). this perpetuates a constant state of irritability that lingers within my demeanor (it's really shame - the feeling that I'm bad or worthless because I continue to lose and not make money). I'm irritated that "I've done it again" and I'm irritated that I feel unable to make a change.
As I wallow in this state of mind, I then become greedy and try to win my money back. This causes me to break my rules, over-leverage and usually win because I'm fearful of taking another loss (in other words, I grab profits quickly). It is during this time that I THINK that I've kept the greed at bay (because I leave money on the table and take profits), the reality is that I'm lying to myself because I over-leveraged big time and got lucky that the trade went in my direction. The fact that I've now won perpetuates more self-deception because I think that I've now "got it" or "turned the corner" and are finally on the right track.
This causes me to become arrogant, place riskier trades where I eventually refuse to take stop losses (pride) because I KNOW THAT I'M RIGHT....or because I MUST be right or because I cannot afford to take a loss of this magnitude.
Of course, I eventually lose my entire investment, if not my entire account. This causes me to become totally self-absorbed and distracted as I throw myself a pity party, trying to figure out what happened, study more technical analysis gurus on the internet, read as many forecast predictions from as analysts and stare at the charts for hours to see how I can improve.
During all of this, because I hate myself, I'm acting like a freakin' jerk towards my wife and kids and I'm neglecting my responsibilities.
That is what trading has done for me so far.
When I tell people all of this, they always respond in the same manner, "It is obvious that trading is not for you. Why don't you just stop doing it?"
I don't know if it is pride or my competitive spirit but I feel as though if I walked away now, then I would be a quitter and that the market would have gotten the best of me. Also, if I quit now, it's as if I'm surrendering to my character defects of pride, arrogance, fear, greed, lack of self-control, shame etc...
I know that in order for me to make money in the markets, I MUST be a master of my own emotions and exercise self-discipline; character traits that all people should strive for. Unfortunately, I've been unable to do that since I began trading 20 months ago.
So on the positive side, what trading has done for me is brought about a greater self-awareness of who I truly am. I was blind to many of these character defects before I began to trade. And I determined to have them removed from my life and make money while doing it.
I just HOPE that starts today.
Let me ask you this Floyd. After you lost the last dollar of your 250K, did you KNOW that things were going to be different before you placed your next trade or did you HOPE that things were going to be different? In other words, there had to be a period of time after your 250K loss and before your 80% success rate where you reflected on your life and career as a trader. What transpired during that time, how much time elapsed between those two periods and what did you feel like during that transition?
I appreciate your time as you analyze my response to your homework assignment.
Take care.
Michael
3. Floyd, I really enjoy studying the market. Admittedly, with family, job/travel commitments, etc I cannot devote as much time to it as I would like, but I really enjoy it. Someday, I hope to make a living from these efforts, but it seems very nebulous at times. I hope to get there, sooner rather than later.
I also like to study complex options trading. I think money can be made if one is careful to understand the risks in any given position. The trick is in understanding adjustments, how they work, when to put on, etc.
It is my hope and expectation that this double-barreled approach will bear fruit one day. Since I have not really made profits with the OEX options approach, it does make it harder to visualize how things would be. But I have to believe that I can do it.
I got laid off 18 months ago. I got another job within three months. I was lucky. I do not want to rely on anyone else for my living. That goal and my pursuit of this goal is something else that I get out of trading.
Jon
4. Four years ago I got fired from a 200k a year job. I had worked for the company 15 years. They fired me on age. Prior to that I worked for a company for 20 years, my pension is bankrupted and they also let me go in a "cost cutting." Both times I was innocent and a good employee. My answer was to FUCK American corporations. I invested 30k in courses on trading, wasted all my money, and then found you. I trade full time for a living now, about 20 hours a week, and bring in about 220 k gross, after commission, or the past three years. I trade because I hate American corporations, and I find your teaching for extraordinary, but uniquely "right on target". To me , trading is my job.
BOB
_________________________
Many believe it's time to raise federal interest rates, and I see the issue. I see no need for short term rates to remain near zero as the economy clearly shows signs of improvement. Gold, oil and other commodities are skyrocketing (I think Gold will hit $2000 an oz, and advise Blue Chip Option subscribers (www.bluechipoptions.com) , the dollar is falling, and interest rates are near zero.)
My Floydian thoughts are simple. Raise the rates to 2% which are still very low, and send a signal to the world markets that the U.S. is serious about helping its falling USD, and stabilize concerns the world has.
With the country saving more, finally, we also need to encourage it. Right now we punish prudent cash investors and reward the more speculative investor, not a fair balance.
So Main Street still suffers, savers have little to gain, and Wall Street is having one of its best years ever. This says three things:
1. The Bush 585 billion bailout by Paulson paid off bank executives and calmed the storm for a few weeks.
2. The Obama infusion stimulated car sales, got the banks out of part of their derivative hell, and sadly without regulation yet in place (Congress) has allowed Wall Street to start the game all over again. It's half paid off.
Meanwhile the nation debates healthcare, armed with all false propaganda and facts, and never figures out that the insurance companies, RNC renegades, and pharmaceutical companies are not our friends, but our business and life enemies in many ways.
Face real facts, not false ones.
____________
The market repeated itself, with highs of 10,159 and lows of 9904. This allowed new put buyers excellent entry on the resistance lines, and profits for new trades to over $2.00 per contract. The 520 Call was also available for tight .5 profits, showing again a top and OTM options hesitant to move.
We'll be using the same signals around this whipsaw.
1. What do you get out of trading?
first, thanks for asking this question...once you put things on paper you can't hide from them anymore...while it is embarrassing, i have to admit, i truly believed there was a "Holy Grail" trading system that would solve all my "problems". so much so that i have spent a small fortune and almost two decades looking for the "perfect" system that would satisfy my desire for success (at an endeavor that very few individuals have true success at) and overpower an obvious strong fear of failure...so what do i get out of trading?...a long and currently positive self-assessment and re-evaluation of my entire thought process, belief systems and limiting behaviors. my only wish (regret?) is the length of time and the "tuition" associated with the countless newsletters, seminars, home study courses (audio tapes, vhs tapes, cd's dvd's, webinars, etc.), software programs, data services, computers, brokers, personal conversations with several traders who wrote books, funny looks and head shaking from my wife, etc. has led me to finally realize that no amount of money can buy an "outside solution" to overcome an "inside problem"...my account balance truly does reflect my success at releasing these inner limiting programs...why did it take so long and cost so much in terms of time, money and frustration?...pick your saying..."when the student is ready, the teacher will appear"..."a problem can't be solved with the same thinking that created it"...or my current favorite..."Duh"
jmp
2. Great question Floyd...
My initial response to the question "What do I get out of trading?" was FRUSTRATED...ANGRY...IRRITABLE...GREEDY....FEARFUL....ARROGANT......PRIDEFUL.......SELFISH... DISTRACTED.....AND SHAME.
I become frustrated with myself for not taking profits when I should. I then allow the frustration to turn into self-hatred (anger). this perpetuates a constant state of irritability that lingers within my demeanor (it's really shame - the feeling that I'm bad or worthless because I continue to lose and not make money). I'm irritated that "I've done it again" and I'm irritated that I feel unable to make a change.
As I wallow in this state of mind, I then become greedy and try to win my money back. This causes me to break my rules, over-leverage and usually win because I'm fearful of taking another loss (in other words, I grab profits quickly). It is during this time that I THINK that I've kept the greed at bay (because I leave money on the table and take profits), the reality is that I'm lying to myself because I over-leveraged big time and got lucky that the trade went in my direction. The fact that I've now won perpetuates more self-deception because I think that I've now "got it" or "turned the corner" and are finally on the right track.
This causes me to become arrogant, place riskier trades where I eventually refuse to take stop losses (pride) because I KNOW THAT I'M RIGHT....or because I MUST be right or because I cannot afford to take a loss of this magnitude.
Of course, I eventually lose my entire investment, if not my entire account. This causes me to become totally self-absorbed and distracted as I throw myself a pity party, trying to figure out what happened, study more technical analysis gurus on the internet, read as many forecast predictions from as analysts and stare at the charts for hours to see how I can improve.
During all of this, because I hate myself, I'm acting like a freakin' jerk towards my wife and kids and I'm neglecting my responsibilities.
That is what trading has done for me so far.
When I tell people all of this, they always respond in the same manner, "It is obvious that trading is not for you. Why don't you just stop doing it?"
I don't know if it is pride or my competitive spirit but I feel as though if I walked away now, then I would be a quitter and that the market would have gotten the best of me. Also, if I quit now, it's as if I'm surrendering to my character defects of pride, arrogance, fear, greed, lack of self-control, shame etc...
I know that in order for me to make money in the markets, I MUST be a master of my own emotions and exercise self-discipline; character traits that all people should strive for. Unfortunately, I've been unable to do that since I began trading 20 months ago.
So on the positive side, what trading has done for me is brought about a greater self-awareness of who I truly am. I was blind to many of these character defects before I began to trade. And I determined to have them removed from my life and make money while doing it.
I just HOPE that starts today.
Let me ask you this Floyd. After you lost the last dollar of your 250K, did you KNOW that things were going to be different before you placed your next trade or did you HOPE that things were going to be different? In other words, there had to be a period of time after your 250K loss and before your 80% success rate where you reflected on your life and career as a trader. What transpired during that time, how much time elapsed between those two periods and what did you feel like during that transition?
I appreciate your time as you analyze my response to your homework assignment.
Take care.
Michael
3. Floyd, I really enjoy studying the market. Admittedly, with family, job/travel commitments, etc I cannot devote as much time to it as I would like, but I really enjoy it. Someday, I hope to make a living from these efforts, but it seems very nebulous at times. I hope to get there, sooner rather than later.
I also like to study complex options trading. I think money can be made if one is careful to understand the risks in any given position. The trick is in understanding adjustments, how they work, when to put on, etc.
It is my hope and expectation that this double-barreled approach will bear fruit one day. Since I have not really made profits with the OEX options approach, it does make it harder to visualize how things would be. But I have to believe that I can do it.
I got laid off 18 months ago. I got another job within three months. I was lucky. I do not want to rely on anyone else for my living. That goal and my pursuit of this goal is something else that I get out of trading.
Jon
4. Four years ago I got fired from a 200k a year job. I had worked for the company 15 years. They fired me on age. Prior to that I worked for a company for 20 years, my pension is bankrupted and they also let me go in a "cost cutting." Both times I was innocent and a good employee. My answer was to FUCK American corporations. I invested 30k in courses on trading, wasted all my money, and then found you. I trade full time for a living now, about 20 hours a week, and bring in about 220 k gross, after commission, or the past three years. I trade because I hate American corporations, and I find your teaching for extraordinary, but uniquely "right on target". To me , trading is my job.
BOB
_________________________
Many believe it's time to raise federal interest rates, and I see the issue. I see no need for short term rates to remain near zero as the economy clearly shows signs of improvement. Gold, oil and other commodities are skyrocketing (I think Gold will hit $2000 an oz, and advise Blue Chip Option subscribers (www.bluechipoptions.com) , the dollar is falling, and interest rates are near zero.)
My Floydian thoughts are simple. Raise the rates to 2% which are still very low, and send a signal to the world markets that the U.S. is serious about helping its falling USD, and stabilize concerns the world has.
With the country saving more, finally, we also need to encourage it. Right now we punish prudent cash investors and reward the more speculative investor, not a fair balance.
So Main Street still suffers, savers have little to gain, and Wall Street is having one of its best years ever. This says three things:
1. The Bush 585 billion bailout by Paulson paid off bank executives and calmed the storm for a few weeks.
2. The Obama infusion stimulated car sales, got the banks out of part of their derivative hell, and sadly without regulation yet in place (Congress) has allowed Wall Street to start the game all over again. It's half paid off.
Meanwhile the nation debates healthcare, armed with all false propaganda and facts, and never figures out that the insurance companies, RNC renegades, and pharmaceutical companies are not our friends, but our business and life enemies in many ways.
Face real facts, not false ones.
____________
The market repeated itself, with highs of 10,159 and lows of 9904. This allowed new put buyers excellent entry on the resistance lines, and profits for new trades to over $2.00 per contract. The 520 Call was also available for tight .5 profits, showing again a top and OTM options hesitant to move.
We'll be using the same signals around this whipsaw.
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