Saturday, July 18, 2009

New and Updated Blue Chip Options


Our sister site www.oexoptions.com began 7 years ago, and has won prestigious top advisory service awards two years running from Stocks and Commodities Magazine.

www.bluechipoptions.com has, in the past, been a subscription based service we've offered our members. This site is in the process of changing, offering much more FREE information, and a daily blog, and we're in the middle of creating a "subscription offer". As we value our subscribers as clients, and friends, as Floyd writes personally with each and every subscriber, we thought you might enjoy our thinking as we create the "sales pitch" and "who we are and what you'll get" for our Premium Blue Chip Subscription membership, soon to be announced.

Here's our thinking so far:


Sales Pitch: You MUST spend money now to find a way to earn money differently than you do. Trading in the stock market in short term trades on stocks and options, done when truly educated in how to trade, can provide solid income. You must invest to succeed, and stock and option trading takes working capital and the patience to “take a course” in how to smartly trade.

You are investing in a business. Yourself. Your inventory is your money, and how you trade it. Some traders earn consistent 20% to 30% profits 83% of the time, and some traders lose their ass. It’s in “learning to trade”.

You are buying a franchise in yourself. You are What You Decide®

What You Get:

-Floyd’s current portfolio recommendations. What I own.

Core, speculative, and Index, ETF sector stocks

Blue Chip Options utilizes a 50 stock position portfolio. We study, hold, and trade only 50 stocks, typically the same ones for years. This is called a Wyckoff 50, and is a true secret in the market.

-Stock Option Trades-short term to LEAP options. Buy/sell and stop loss guidelines.

-Stock and Bond Recommendations-I often will swing trade the same stock, or will work for 1.00 a share profits, and use a buy/sell strategy to build gains, and minimize losses

These are my own trades.

We often sell positions in 1/3’s, insuring profits, and maximizing gains.

The password protected subscription area contains:

Training Videos

Calculation Models

Specialty articles by Floyd on various types of trading

-Advance notice of any options we recommend to the general public, and specific DIA (DIAMOND-ETF on the DOW) call or put options recommendations mailed to you

-Intraday Dow pivot/support and resistance calculations by text, or RSS feed

-Daily RSS feed or email with our unique 10 point bell curve analysis of overbought/oversold conditions

Who I Am:

Raised in Chicago by a stock trader Father who was trained and licensed as the only teach of the Richard D. Wyckoff Method. http://en.wikipedia.org/wiki/Richard_D._Wyckoff

I grew up in the stock market, and although became classically educated in psychology and business, and have owned other businesses, my core income was built by my trading.

I began www.oexoptions.com seven years ago because so many friends that I sent email tips daily, early “blogging”, recommended to me I “become a web business”.

What We Are:

With the help of Terry Brown (www.terryvision.com) and teaching my 27 year old schoolteacher daughter how to trade, we built a strong following with stock brokers, international clients, full time traders, and students truly wanting to learn how to trade for a living.

In 2008 and 2009 OEX Options won the prestigious READERS CHOICE Top 10 Advisory Service Award from prestigious Stocks and Commodities Magazine. We’re proud of this because our competition were these huge advisory services, and there we are, small OEX Options, that limits its subscription base, and builds long term relationships with its subscribers.

Blue Chip Options is also recommended by our current subscribers as “give us more” , not just the OEX, and we’ve been working at it.

www.bluechipoptions.com is a secret. We don’t advertise much, and are word of mouth. I make absolutely no guarantees that you will earn 100% a year”, or 200% returns trading only an hour a day”, or list all my successes in a “trade history” that is based on hypothetical perfect trades. Read the fine print on all this stuff, and these are just guys making a living selling you on “get rich”.

I do this for a different reason. For me to trade well personally I must follow specific disciplines, and my “executing them” and teaching them to others, and working with people on the emotions of their lives and trading is something I love to do. I both give, and receive. It’s quite cool.

There are thusly no guarantees with this service. If you’d like references of what some of our clients think, just write me at bluechipoptions.com and I’ll send them.

By the way, the key to our service is that we limit our subscriber base, and I personally answer every email 7 days a week, within 24 hours a day.

Be Well, and Do Good


Floyd


P.S. We'll let you know when our subscription area is ready!

Note: Traders that may have more specific questions are referred to our sister site and a great area on frequently asked questions: http://www.oexoptions.com/pages/faq.html

Wednesday, July 15, 2009

Shorting Coal-New Option Recommendation




I look at coal as just ready to collapse. No matter how we mask it this fossil fuel kills the earth and people, and is hugely profitable. But shifts are in process, and this sector may be time for a shorting, or a October to December call

QLEVP is a put on KOL October 2009 issue. It's trading at .50. Throwaway money, but it could skyrocket on any drop in coal, and it's coming.

We won't "track" this one for subscribers, just offer it as a "freebie"

545 People--Great Article by Charley Reese

The 545 People Responsible For All Of U.S. Woes

BY Charley Reese

Politicians are the only people in the world who create problems and then campaign against them.

Have you ever wondered why, if both the Democrats and the Republicans are against deficits, we have deficits? Have you ever wondered why, if all the politicians are against inflation and high taxes, we have inflation and high taxes?

You and I don't propose a federal budget. The president does. You and I don't have the Constitutional authority to vote on appropriations. The House of Representatives does. You and I don't write the tax code. Congress does. You and I don't set fiscal policy. Congress does. You and I don't control monetary policy. The Federal Reserve Bank does.

One hundred senators, 435 congressmen, one president and nine Supreme Court justices - 545 human beings out of the 235 million - are directly, legally, morally and individually responsible for the domestic problems that plague this country.

I excluded the members of the Federal Reserve Board because that problem was created by the Congress. In 1913, Congress delegated its Constitutional duty to provide a sound currency to a federally chartered but private central bank.

I excluded all but the special interests and lobbyists for a sound reason. They have no legal authority. They have no ability to coerce a senator, a congressman or a president to do one cotton-picking thing. I don't care if they offer a politician $1 million dollars in cash. The politician has the power to accept or reject it.

No matter what the lobbyist promises, it is the legislation's responsibility to determine how he votes.

A CONFIDENCE CONSPIRACY

Don't you see how the con game that is played on the people by the politicians? Those 545 human beings spend much of their energy convincing you that what they did is not their fault. They cooperate in this common con regardless of party.

What separates a politician from a normal human being is an excessive amount of gall. No normal human being would have the gall of Tip O'Neill, who stood up and criticized Ronald Reagan for creating deficits.

The president can only propose a budget. He cannot force the Congress to accept it. The Constitution, which is the supreme law of the land, gives sole responsibility to the House of Representatives for originating appropriations and taxes.

O'neill is the speaker of the House. He is the leader of the majority party. He and his fellow Democrats, not the president, can approve any budget they want. If the president vetos it, they can pass it over his veto.

REPLACE SCOUNDRELS

It seems inconceivable to me that a nation of 235 million cannot replace 545 people who stand convicted -- by present facts - of incompetence and irresponsibility.

I can't think of a single domestic problem, from an unfair tax code to defense overruns, that is not traceable directly to those 545 people.

When you fully grasp the plain truth that 545 people exercise power of the federal government, then it must follow that what exists is what they want to exist.

If the tax code is unfair, it's because they want it unfair. If the budget is in the red, it's because they want it in the red. If the Marines are in Lebanon, it's because they want them in Lebanon.

There are no insoluble government problems. Do not let these 545 people shift the blame to bureaucrats, whom they hire and whose jobs they can abolish; to lobbyists, whose gifts and advice they can reject; to regulators, to whom they give the power to regulate and from whom they can take it.

Above all, do not let them con you into the belief that there exist disembodied mystical forces like "the economy," "inflation" or "politics" that prevent them from doing what they take an oath to do.

Those 545 people and they alone are responsible. They and they alone have the power. They and they alone should be held accountable by the people who are their bosses - provided they have the gumption to manage their own employees.

This article was first published by the Orlando Sentinel Star newspaper

Tuesday, July 14, 2009

The Law of Cause and Effect


Support/Resistance and the Law of Cause and Effect Support and Resistance surrounds our daily lives, and is in all trading. Everywhere. It’s at the core of just about every trading strategy that is used today, yet surprisingly not used by many traders. How many traders can clearly identify the S/R lines of a stock, or an option, immediately? In other words, it’s the core of how the market works, but most traders don’t correctly utilize these key areas. At www.bluechipoptions.com we calculate the support, resistance, and pivot point of a stock, or an option SEVERAL times a day. This is how we know when to day trade. The correct way to analyze a market is exactly opposite of what most traders do. At www.bluechipoptions.com we work entirely from the above premises. When demand is greater than supply prices will go up. When supply catches up to demand it reverses, and prices will go down. Support does not always mean “down,” and you’ll see it best as you learn that support lines can become resistance, and resistance can eventually become support. S/R are really just resistance to any general market direction. We care about the HIGHS and LOWS of a day first, because they represent best the limits of buyers and sellers that day. At bothwww.bluechipoptions.com and www.oexoptions.com all of our work is based around various calculations we use on the prior days Open/High/Low/Close price (O/H/L/C).[1] The strength of the S/R line is simple…its how many times the market has hit that price, and is part of what we call “the count”. Ex: If you have a price that has been tested 6 times as Support and another price that has been tested 4 times, then the market will likely break through the Resistance (4) not as strong as the Support (6). All things being equal…the market will always choose the path of least resistance. And, things aren’t equal all the time (news, overbought conditions, time of month)…so it’s learning the S/R around the trend that can make a trader real money…in anything traded! Here’s a simply tip: Multiply the number of times the issue has hit a S/R line by 1.5. If the level isn’t 5 or above it’s not likely strong enough to effect the market and can be ignored. Only when there are two or more spikes through a S/R line do we begin to “count” the trend. Proof? Watch to see a closing price beyond the resistance level that “holds,” and there’s high likelihood the directional bias has now been re-established. It’s a great tip. Prior day close is the issue…did the market hold the S/R lines, or was the close clearly above S/R lines?…if it didn’t, it’s a false break out and reversal is likely. [1] Using Charles Dow’s original point and figure charting (www.stockcharts.com offers an excellent tutorial on point and figure charting, and superb charts) we identify supply and demand, and the corresponding support and resistance lines that surround supply and demand, around the pivot point we calculate on yesterday’s actual O/H/L/C.

S & P 500

Many floor traders believe that the S&P 500 is very fairly valued in the 900's. The wayBLUECHIPOPTIONS.COM sees this is that it is a reason to sell fairly valued stocks we've made money on.

Raise your suspicions when there have been large moves up in the stock market, as we've seen this past 6 months, huge government expansion and increasing debt, and when we are now at fair value. Rising values too quickly create bubbles.

Sunday, July 12, 2009

Question All Facts

U.S Households have lost 1.4 trillion in wealth in the last two quarter of 2007, 10.9 trillion in 2008, and 1.4 trillion in the first quarter of 2009. This adds up to 14 trillion dollars.
There is less money being spent. A rising stock market shows illogic. Question all facts.

Using Put Volume Indicators to Trade

Bollinger’s Put Volume Indicator (PVI) has great value for option traders. Here the trader uses put option volume history, the entire CBOE (www.cboe.com) put volume for the day. The indicator is equal to the 10-day moving average of put volume. If the ratio rises, it indicates that puts and bearish bias are on an increase. EX: A reading of 2.00 tells us that the day’s put volume is two times greater than average. If the reading is, in turn, low, it means there is high bullishness, or complacent. Some traders also use put call ratios: CBOE Put Call Ratios - another way to study excessive fear and greed in the marketplace. Calls are typically higher volume on this exchange, but when the put to call ratio rises it means buying is on the rise. Readings of 1.25 or greater reflect oversold. When the indicator drops below .50, it shows bullish sentiment is still quite high, and overbought, and likely to shift bias.

"Buy and Hold" is a Lie

Understanding our Dow Projections for Daily Trading



"As of June 3rd, U.S. Stocks have underperformed long-term Treasury bonds for the past five, 10, 15, 20 and 25 years. We all have heard though "that there has never been a 30 year period since 1802 when stocks have underperformed bonds. This theory is unproved, and comes from Stocks for the Long Run, by economist Jeremy Siegel. As usual, this is an extrapolation of data that is "interpreted".

To Floyd thinking, stocks are not to be held forever, and are to be used as vehicles to "trade for profits", whether from index options, or actual stocks or stock options.

We suffered our fourth weekly decline in a row, the longest losing streak since the spring rally began in March, and lowest close since before April." WSJ

“Buy and hold” is over. The baby boomers, and the retired generations see this now in portfolios barely breathing.

But we do not advocate not trading stocks, or investing blindly in index funds (The Bogle Thinking) that have now proven the downfall can be as great.

It’s simple to me. When I make money in a stock, typically 20%, I sell 1/3 of my position. If the stock continues to rise, I sell another 1/3 at profits in 30 to 37% range, and I hold the final 1/3.

At www.bluechipoptions.com we also are proud believers in NEVER selling at the top.

Last year we saw GREED so rampant, and values that appeared unrealistic (no, not a clue about how bad it was going to be) and we recommended to subscribers to sell 1/3 of all holdings at 14,100, 1/3 at 11, 200, and to hold the rest.

At 6700 we recommended to subscribers buying up many of the same issues, vastly increasing their positions.

We hold three portfolios, available to subscribers only:

  1. Core Stocks
  2. Speculative Stocks -short holds, breakout or value stocks
  3. “Real Money Portfolio”-When we moved out of stocks last year we recommended 15% of your positions should be in Gold GLD or Canadian Exchange Fund (CEF) We’ve recently sold 2/3 of our position out on GLD at 45 to 68% profits, and continue to invest in lower cost CEF (which also covers Silver) and have made recent recommendations for short term puts on GLD, with re-buys when Gold hits 870.00 to 820.00


Recently we recommended “slimey old AIG” for a fast stock trade, and were in and out in 3 days for 22%.

We use the Dow as a perfect “media sentiment” of the market at large. Weekly we provide projections on the www.bluechipoptions.com website, and in our core service www.oexoptions.com we provide detailed daily updates that helps us trade index options.