Floyd at www.oexoptions.com won the 2008, 2009, and 2010 Readers Choice Advisory Service Awards from Stocks and Commodities Magazine. At www.Bluechipoptions.com we offer weekly Dow projections, daily Twitter updates, free option and stock signals, our blogs, and numerous articles on trading the market.
Thursday, July 9, 2009
The Volex System Of Trading
Wednesday, July 8, 2009
Sarah Palin, Joe Biden, and The Perfect Answer
Sarah Palin, Joe Biden, and The Perfect Answer
By now we all know Sarah is either very very shrewd, or a complete flake.
Noting that she could have been President has always disarmed me, that there could be enough stupid people in America to vote for McCain with a 70% chance Palin could have been President within two years, following actuary laws.
Then, Biden is kind enough to tell us this over the 4th of the July, when unemployment hit 9.4% that “we underestimated the situation and there may be a need for more stimulus”.
Biden is the smarter idiot as he told the “perfect truth”.
What the Obama administration inherited is still unknown. The financial ruins of betting on ethanol, to funding a useless war, to letting the boys on Wall Street have unfettered power led to the Global greed. Hell, we hear now that even the Amish got greedy during this time period.
It hit the world, the global economy, and we began to see it all unravel. The financial house of cards fell.
Does Obama have it right? Will this stimulus work? Can we absorb the debt?
Here’s the real answer: there is no such thing as free enterprise. It sounds so good, but the games begin even with the lemonade stands.
And, things are much much worse than we could anticipate, and Floyd predicts that even more will come to the surface.
Creating a big government that buys our way out, and creates controls that stop our GREED (environment, Wall Street, autos, et al) is a necessary evil that will later cycle out, after having served its purpose, and smaller government will return.
This is a cycle. And Sarah, dear girl, is part of our current drama. As is Sanford. Stanford.
Madoff. Greenspan giving 100k speeches when he led the debacle.
Biden told the truth. We’ll need more stimulus, and we’ll uncover even more muck.
However, some scary survey just shared that 7 of 10 Republicans would vote for Palin in 2012. Any readers that would do so are invited to THREE free months of Floydian Therapy
http://www.oexoptions.com/pages/FloydianTherapy.html
The State of Gold
“Gold stocks have been taking it on the chin lately. And that's bad news for anyone who owns gold.
Gold stocks often move ahead of the metal. A rally in the stocks usually leads to a rally in gold, and a decline in gold stocks often foretells of weakness in gold. So the 20% drop in the Gold Bugs Index (^HUI on Yahoo Finance) over the past five weeks is a bad omen for the shiny yellow metal.
Gold is on the verge of breaking to the downside of a consolidating-triangle pattern. A move below $920 per ounce will likely set off a short-term correction down to support around $870.” You see, we know gold is in a bull market because the metal is trading above its 40-month exponential moving average (EMA), which defines a bull market for gold...”This from Jeff Clark, a well known trader with Agora Publishing.
From a Floydian perspective Gold (GLD) and lessly Silver (SSRI or SLV) are commodity plays in a world that has become commodity driven, and Gold is now thought of less as “the only real money”. This is wrong thinking. As China works us to a “world currency” and the G20 begin to consider it, as the dollar weakens again, and it will, Gold will become a currency.
In the meantime we may consider both a short term put on Gold (GLD) on the downside potential, and plan a long buy on GLD (which we already own a core position in. We’ve sold 2/3’s of our holdings thru 2/28/08 at 45% to 68% profits. Blue Chip subscribers that know all of our holdings saw us build 15% of our portfolio to GLD in the past 10 months, and begin to reduce it.
Here’s our suggestion for long term subscribers. Hold your remaining 1/3 of GLD, and buy puts short term on a downside. When Gold hits 870 to 820 we’ll consider adding to our position in GLD, if market conditions remain precarious.
Trading Inverse ETF Funds Profitably
ETF inverse funds have some great opportunity right now. A number of ETFs are now offering high risk "inverse" funds that can play bull or bear moves in the general market by investing in 2X or 3X bull or bear moves.
This is a form of hedge fund trading, and can be utilized for long term investing, as a hedge (ex: hold a bear fund while investing to the upside), OR for a good swing trader can offer some tremendous opportunity for 5% to 10% returns, when traded like a swing trade.
Let's use two of my favorite trades. BGU and BGZ. Dirextion DailyLarge Cap Bear and Bull 3X funds, medium volume, priced well in the $30.00 range (leaving out the baby boy traders), and quite easy to play to 5 and 10% returns quickly.
Here's simple logic. Use our longer term Dow projections and at the bottom projection to the Dow buy a position to BGU, the 3x Bull Large Cap. Sell it for up to 10% profits as the Dow moves to our top projections. Near the top, begin the buy on the inverse, BGZ, and repeat the sale at the bottom.
How often will this not work out? On estimates 25% of the time and when this occurs the trader is creating a “natural hedge” to bi-lateral positions, as the market begins establishing a bias, diminish the holding in one of the hedges.
The trader wins two ways:
- Swing trading puts or calls managed in group, on large caps.
- Gaining large cap exposure, short and long, for a portfolio.
Tuesday, July 7, 2009
Amazing It's Not Worse
A small child can figure out that with unemployment at 9.5% and the true unemployment at over 20%, and a savings rate that has risen to 6.9%, that there is less money being spent.
This is deflation. Bubbles Greenspan is a free entreprise boy, that trained under Ayn Rand.
Study up. Here's how our economic crisis began, long ago.
http://www.nonfamous.com/wp/2008/10/23/alan-greenspan-is-an-idiot/
http://www.huffingtonpost.com/2008/10/24/greenspan-shrugged-how-di_n_137465.html
http://www.nytimes.com/2007/09/15/business/15atlas.html
http://www.commondreams.org/views/041800-106.htm
And as we know now, Clinton took advantage of the bubble economics to "look good" and "balance the budget". In came Emperor George and Shooter Cheney, and the neocons took over, influenced by Goldman Sachs, as they allowed oil to become a speculators game, stopped even watching Wall Street (their buddies getting rich, right up to Paulson's bail out to his friends before exit), and oh yeah, Iraq. Getting rid of the evil ones.
It's almost amazing it's not worse, isn't it?
Making Money with Inverse Funds
Watching the Market Breathe
Traders typically never really trade the trend, and are trading contrarian, and it’s why most lose.
We are making money on the respirations of the market, no matter what the overall direction.
Fibonnaci as Support and Resistance
UTILIZE FIBONACCI RETRACEMENTS
We use a variation of Fibonacci (1170-1250), the famed 13th Century mathematician, and his retracement logic to further identify Support and Resistance lines.
38/50/62%.
As the market moves up the first steady moves to correct will move to 38% below the index high. At times the market will continue the downside, first to the 50%, and sometimes to 62%, before reversing again and beginning the upward trend again.
This theory is used by many chartists with stocks and option trading, and can have some validity for analyzing short term moves on an index.
Start with the high and low prices of the index.
Track each of these % as Retracements levels.
S/R form around these Retracements, especially the 50% level, and there is more
likelihood of reaction at these levels.
The 50% retracement is now so obvious to all markets that it’s more difficult to see if this is really the market moving, or traders in unison creating the trend.
Knowing the obvious, and where the S/R lines will fall, is based on how well the trader tracks moving averages, highs and lows, and all the tools to begin to see “edges” and “trends”.
Monday, July 6, 2009
AIG
Watch How the Market Breathes
- Watch how the market breathes. At www.bluechipoptions.com we believe in Richard D. Wyckoff’s Composite Man. This means the market is comprised of our “group emotions”, and typically the market moves precede the changing psychology of the mob.
Sector Funds
Linear Weighted Moving Averages/Use of TNX
Watch the TICK
Using Average True Range
Sarah Palin
Sunday, July 5, 2009
Oil Dropping
At the same time we won't begin to play microcap oil companies on the great "hope" of sell off to a major, or "hitting it". We will continue to watch our crude oil play DXO as a double long ETN play.
Study up on this new sector development, specifically on DXO at : http://www.powersharesetns.com/portal/site/etns/crudeoil