The Floydian View:

The stock market: Cause and effect = supply and demand.
• Not all that has happened in the markets is at it appears, or better, may not be real.
• Our overextended upswing built on three reasons:
1. Enthusiasm about creating 500 billion of more debt, even though Americans are appalled at the debt he has created, or assumed from the GOP last time.
2. Good earnings from the conglomerates who have fired so many people and outsourced even their companies (Halliburton main office now in Dubai)
3. Need for good. The world cannot accept the fact that it has phucked itself in a pile of fake money, first created by the U.S.A.

• We are at a short-term cycle high and our new Dow projections limit downside to two key areas, both telling if the market will hold.


Charles Nenner Research projects flags and concerns to an upward swing, and not just market highs, if:

• The Dow does not close below 11,100.
• The S&P does not make a close below 1178, or the NASDAQ below 220
Nenner sees closes below these levels as a time to take profits, but NOT a time to go short, just to sell profits.



All of our moves on Gold, Silver and Precious Metals have hit:

-We sold GLF for profits at 1110 thru 1140 and rebought at 12.10. We’ll hold until we see hesitancy around 1344, and would lock any Jan or December Gold calls, or hold on the position.

Silver could easily hit $30.00 before a slight correction.




The new best investment ETF we’ve seen, and recommended, is Glitter or (GLTR) that invests in Gold, Silver, Platinum and Palladium proportionately.

We would sell out Pan American Silver (PAAS) and SLV on dips, and reinvest in GLTR or Canadian Exchange Fund (CEF), both still undervalued.

We are long term bullish on all the precious metals, and long term BEARS on the EURO and USD.



Famed commodities trader Jim Rogers said: “I don’t know if Bernanke really understands economics”.

The GOP will work to take credit for:

-The highest market we’ve seen since the Lehman crisis.
-Improved GDP
-TARP and all bail outs a success from the creation of a massive depression
-The freezing of all bipartisan adult behavior over the past two years to create only a “one term President”.
-Sarah Palin could actually be President in 2012, you betha! And no one will blink an eye.


For the short term crude may have hit its’ high. We know we’re up substantially in Exxon Mobil, Chevron and Conoco Phillips.

Some traders in Advanced Mentoring also played XOM as a January call, and returned 26% over night.

We are still long on XOM of all the oil companies for their dividend, breadth of type of energy discovery.


If you are holders in 30-year long- term treasuries, such as TLT, we think the top has been reached and we would sell. We are profitable with our Treasury Inflation Bonds TIPS, and hold Zweig Total Return (ZTR) for 50% treasury exposure. That’s enough of the fake money for now.


Friend, subscriber, and fellow trader Alan Austin was talking with me a week ago and we discussed many of the stocks and options that have been recommended this past week.

All are volatile and exciting plays, and we’re already in movement. With each we recommend due diligence review and analysis to be done by each of you, to understand the type of holdings we are now playing

• Emerging Markets:
PXR up 14%
FXI up 112%
• Stock Takeovers or Stocks Overextended
DLIA-ripe for a takeover, long on this stock
LULU-ripe for a crash, we are short on this in options and down 56%. We may move our option out a few months if upside continues
• Rare Earth Elements- a huge and volatile surgery
-REE as January 10 Call-down 7.77% accumulate
-SHZ-our most volatile play, up and down sometimes 50% in a day. We are aggressive in our holdings, and are up 7.26%
-NENE-Truly technology more than anything else, new CEO, and ripe: up 6.14
We are also long WMT as a stock and as an option, and long RIMM with a March call.
If either falters, buy additional inventory.


Lastly our foray into legal drugs in SNY is up 2.46%.

That marijuana tax bills would not pass in California is indicative of just how powerful the drug cartels are in influencing the lobbyists to control a bill that would have brought billions to California…. and trust me, old Nancy Reagan and her bullshit line “just say no to drugs” hasn’t worked one iota.

So a great lesson in false facts:
1. One would assume that Proposition 19 was defeated because the State of California (the people) did not believe that legalizing marijuana would be good for its people.
2. One would assume there were “things wrong with the bill”
3. One would assume this is what the voters WANTED.

The fact: The vote was swung by the drug cartels of Mexico and Latin America that dug deep to make sure no lobbyist, no key congressman would support this….as it would hurt their trade. It has nothing to do with what the people wanted. My God, more than half of the people in California smoke marijuana ☺


This is much like why did the GOP win? Because of disgust with Obama and what he has done? Because of fear of deficit?

And the winner is: FEAR OF LOSING POWER.

And how did they win: INSTILLING False Facts and FEAR

Supply and Demand=cause and effect
Cause and effect = supply and demand.

Remember: The stock market is a game of Zen chess. There are no real facts and you are playing in the sandlot against others, and some are bullies.


Be Well, Do Good, Show Compassion

What Every CEO Wants

• “While American democracy is imperfect, few outside the majority of this Court would have thought is flaws included a dearth of corporate money in politics.” Supreme Court Judge John Paul Stevens

• This is what every CEO wants for his company:
-to get as many favors, subsidies, and tax breaks out of Washington as possible, while at the same time stripping the government of the power to place any checks and balances on corporate behavior. It is corporate America, led by the rich that oppose all government, while making use of the infrastructures that we take for granted about government.

Let’s start the week with our newest recommendation

GLTR

ETFS PHYSICAL PRECIOUS METAL BASKET

This is a new ETF that went public Friday and closed at $75.70. It’s an interesting ETF basket that may replace many of the ways we’ve successfully traded Gold (GLD), Silver (SLV) and combinations, such as the Canadian Exchange Fund (CEF)

We noted last week that if silver closed below 23.00 it was a short term sell signal, and a move from long positions. We sold from 40% to 65% profits all of our SLV position.
We noted also that if Gold went below 1340 on a close that it was time to sell, and close our long position, for the short term. We did so and average profits on our 8th GLD trade this year averaged 37 to 44%.

We recommended keeping CEF, our Canada fund investing in gold and silver, and keeping this as the sole precious commodity trade open.

The above ETF is more unusual and we recommend buying regularly, on ups and downs, and holding for at least one year, in a core market position. GLTR, or Glitter for short, is a perfect averaging of all four precious metals, now exposing our traders to the upside we see coming in platinum and palladium, in addition to Gold and Silver

What the fund is:
“ETF Securities launched the ETFS Precious Metals Basket Shares (GLTR) today (10/22/2010), making it the first US-listed physically backed precious metal basket ETF to hold gold, silver, platinum, and palladium.
GLTR's objective is to provide one-stop shopping for investors seeking to hold all four metals with specific fixed weightings. The fund's prospectus contains no provision to alter or rebalance the holdings. Therefore, the number of ounces of each metal will remain fixed and the percentage allocations will be determined by future price swings of each holding.
On a per share basis, the fixed amount of bullion and current percentage allocations are 0.03 ounces of gold 52.8%, 1.1 ounces of silver 34.0%, 0.004 ounces of platinum 8.7%, and 0.006 ounces of palladium 4.5%. The firm provided no explanation regarding how the initial relative weightings were determined.
The fund has an expense ratio of 0.60% and additional information can be found in the press release, overview page, GLTR fact sheet , and the prospectus.
Investors comfortable with the bullion allocations of GLTR (“Glitter”) will likely find this fund a convenient way to gain exposure to all four metals”.


This last two weeks many of our open positions have begun showing steady and increasing profits:

XOM- Now firmly in the black and moving up. 25% returns plus dividends for longer-term traders, and 8% returns for those that entered this bullish energy stock months ago. We are also up with COP and CVX. All are still a hold.
We see oil topping near 84.00 and possibly correcting, but a larger upswing by end of year.
Of most importance we have picked these three stocks as stocks, not options, for their safety, and the strength of their dividends. They pay far more than a U.S. Treasury and are imminently safer.
Corporations like this run the world, not governments.


All of our long- term core stocks, such as Apple, FXI (new), PXR (new) and our Proctor and Gamble and Goldman Sachs 2013 LEAP calls are up substantially.



We will be watchful on FXI and have set a new stop loss at $44.00 for short-term traders. For longer term traders buy FXI and PXR on any drops, as we are long on the positions, just watchful of a downturn over the short term.

_______________________________________________________________________________________

Note: All of our Blue Chip holdings are updated nightly on www.stockcharts.com, including detailed recommendation summary. Study carefully.
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=1394380,1&cmd=show,IDAY[Y]&disp=e

Floyd's Shifty Fifty-Public Stocks


On an overall stock market level it is not time to add to or buy new positions. We want the market to settle, correct or set new upsides, and to see the reaction to the G-20 group masturbation summit.


This week the primaries take place and America will learn just how gullible they are within their voting, not even knowing that most of the Pee Party and GOP ads are funded by overseas shell corporations represented by the NEOCONS, and set to do nothing to really change any government moves EXCEPT take back anything that has been done that has adversely affected large corporations and the highly wealthy.
We have watched news bytes and lies brilliantly developed by Karl Rove (Roveian politics) and others intent on freezing the system.
Americans, wanting change, but not even knowing what change could work, and wanting it NOW (nothing can take time in America; we are an “instant mentality”, will likely not even notice that all the bills put through in the last two years under Obama, except a few, have been stalemated and stopped in Congress by the GOP, affecting a President to actually be impotent.

So let this settle and we’ll watch for sales and new entries.
Remember, when a stock hits good profits for you follow the Floydian 1/3’s rule: Sell 1/3 at Profit A, Sell 1/3 at a higher profit point B, and let the final 1/3 “run”, as profits have already been made.

As I was trained in the Wyckoff Method I believe the stock market is fully “run” by supply and demand, set in place by cause and effect.

Supply and demand is much simpler than we make it:

1. When there are an equal number of buyers vs. sellers price is equal, and not moving up and down.
2. When there are more buyers, prices will increase
3. When there are more sellers prices will decrease
4. It is possible for prices to move higher with the same number of buyers. There just need to be fewer sellers.
5. When prices decline it is not because there are more sellers; there are just fewer buyers.

Question Authority. Question All Facts. Ignore the Obvious, as it is not obvious. Know that a rock is not hard.
Understand that you only know what you know.
This is the Zen of trading.


Be Well

Floyd

50 Lessons of Life

First, please study:

http://www.marketwatch.com/story/gold-and-silver-may-start-to-buckle-under-pressure-2010-10-15

http://noir.bloomberg.com/apps/news?pid=20601087&sid=ayMiHOOvieuo&pos=5

From the chartists:

-- TRANSPORTATION ISHARES TEST SPRING HIGH
-- RAILS HAVE BEEN THE MAIN DRIVER OWING TO STRONG COMMODITY DEMAND
-- UNION PACIFIC HITS NEW RECORD
-- MOVE INTO TIPS SHOWS MORE INFLATION CONCERN
-- NEW SUPPORT LEVEL FOR GLD AND GDX
-- DOW NEARS CHALLENGE OF SPRING HIGH


Below are the 50 lessons of life that Floyd uses in trading, and in life. We believe this, and the control of emotions, is what leads a trader to success. Many of our long term and most successful traders have fought me tooth and nail on some of these statements, only to later come back saying….”yes, it’s how I learned to make money”.

You must have a basic lack of respect for authority. This is key. Authority creates facts, mostly false, that we as Americans are superb at falling for. It’s learning how to think “outside of the box” that makes trading the art of Zen.
___________________________________________________________________________________________

Weaving Straw Baskets­Fifty Steps to Understanding
1. A rock is not hard.
2. We only know what we know.
3. We do not know what we do not know.
4. There is no real such thing as “I”, but I AM.
5. There are people that do not read at all, and many people that do not
read well.
6. The majority always leads, and always forgets history.
7. Everything is really okay.
8. Everyone wants to dance, many in different ways, many so they are
never seen, many so they wish they could be seen, and many that are
always seen.
9. Negotiation is the art of understanding FEAR and GREED.
10. The mood of the public is first trended by stock markets, which show
levels of optimism, and supply and demand in the market place.
11. Most things are manipulated by the few at the top of the capitalist
pyramid that control the outcome, no matter what is done.
12. We only have what we remember.
13. In our reality our mission is really to give, love, flow and make and have
memories.
14. Our perspectives can change in a minute. Values and goals can shift as
fluid water. What we thought becomes not what we think.
15. Money must be understood. It is a “construed value” commodity, only
worth the value that we put on it.
16. All of life works on supply and demand, and cause and effect.
17. You are what you decide
18. If you surround yourself with people “better than yourself” in real life,
and as models, you become then and synergy can be created.
19. Everything happens for a reason.
20. Neither political party is really right or wrong; it is cause and effect in
action, because the actions of the 540 in Congress are no longer led by laws, but by corporations. This will affect the world.
21. We are always: approaching a crisis, within a crisis, or recuperating from a crisis. There is “always something”.
22. Many of us live in a circle of pain, in which we repeat the same negatively dramatic action with a group of others, all interacting within a black comedy drama. And able to be resolved.
23. Most of us do not know really know ourselves. When I ask clients to “tell me about themselves” they tell me about their jobs, their possessions, and lastly their families. They never mention themselves.
24. Most that appears obvious is not. Most that does not appear obvious is.
25. We are all in therapy at every moment. Most of us just don’t admit it, or
use it.
26. We are here to learn lessons and will struggle through until we learn
them. They may be very simple lessons.
27. In all steps of the life experience, and the dramas, people tend to put
love in the background, or it becomes part of the events.
28. Love is life.
29. If you repeat an action many times, it becomes a habit. If you continue,
“using the habit” it must be something that you value, or the habit will
become instead a self-destructive tendency.
30. Unrealistic expectations occur from being dishonest with you. If you
expect success at something you must earn it, and few that are lucky
last.
31. The question What Do I Want is the most important question you will
ask yourself in your life. Your answer defines your happiness. The question is not to tell yourself what possessions and monetary dreams you wish to come true, but to answer, “What do I want”.
32. There are simple ways to release unwanted stress.
33. There are ways to learn to relax and feel better physically.
34. There are ways to be happy.
35. Life is typically unfair and a series of negative events that are
overshadowed in our memory by the positive events.
36. Few people enjoy their work, making most of their life TV, sleeping, or
doing something they do not like. These people lose their strength and
general well being as time progresses.
37. We are fearful of our bodies. Of sex. This is true more in the U.S. than
most nations, and is something to be studied. But in the meantime,
have more sex.
38. The old funeral question has merit “What would they say for my
epitaph, and who would come?” It goes well with a general personal and introspective look that we must do and only you can do, and that is to look inside and ask what you contribute, and if you are good.
39. Things are not as they appear. What we see is not what is, but only what we know so far.
40. Much of what is smart repeats itself, and is never done.
41. All the religions really say the same thing, and sadly it will be religion
that could divide the world.
42. There is no such thing as an absolute.
43. There is no real black and white.
44. We self sabotage often so that we do not “get something we want” as we
want to punish ourselves for things we have done we feel guilty for.
45. It takes discipline to perform. Discipline is our way inside ourselves, as
we become rather than think.
46. People cannot take in more than 5 tasks/thoughts at one time.
Learning to control input is key to knowing when you are at or “over
your threshold”. We all have a threshold in which input overcomes us.
47. More could be done in business, and in politics, if simple playground
rules “no cheating” were put in place before any “deal” and a. Cheaters had to pay by doing public service, but that is just a
dream. b. I want Tom Delay mowing that White House lawn.
48. Life is too short to do business with assholes.
49. Use your time. Have your goals around your values, but be armed to
stop believing even what you believe.
50. Be open to the world. Trust no facts. Question authority.


Floydian Thoughts:

*Gold has a support line at 1350. Watch your long position only if Gold drops to this level, or take partial profits.

*Silver we are also long with 50% plus increases, and watch our long position at closes below support lines at 22.00

*Our option on PAAS (Pan American Silver Corp) expired Friday with a total return of 150%. For those that held the position until expiry a lot of money was to made.

* Oil remains strong, and we would watch for support line closes below 82.20.
It’s likely oil will remain up until November.

Charles Nenner Research:

This great stock picker sees the following as changes in the market:

1. S&P close below 1182
2. Dow a close below 10,950 might lead the market to the Fib retracement at 10,746 or a bit lower.
3. The Nasdaq closing below 2044, and we see the Nasdaq as the first to go down, and rotate into the OEX and S&P 500.


Dow Projections

Here are our Dow projections for the next 14-day period:
10,416-Deepest Support Line, unlikely
10,550-10,676-Strong Support, likely lowest low
10, 746-10,787- Fibonacci retracement. This is a key support and resistance area where the market has pivoted from for several weeks.
We now see this as our potential deepest low
Pay attention to a hesitancy area at the Fib retracement above up to 10,846
10,900-10,950 Resistance testing line
10,127-New Resistance Line

11, 250-Resistance
Last week the Dow hit theoretical tops at 11, 190 several times
11,367-Strong Resistance



Most of last week the market hovered. We dropped on the theoretical Dow several times below 11,000, but would always end the day to the upswing.

The market is vastly overbought, and the discussions between the floor traders are if the UP will hold, or IF the down will go down further than people expect.

We know:

1. Our January 2013 Goldman Sachs call returned as much as 20% within a week. Some traders sold for profits, and will re-buy and others continue to hold.
2. Our January 2103 Proctor and Gamble call is already up 10%.


Many traders ask on LEAPS like these two core questions:

1. Why would you buy so far out?
2. If the position becomes profitable early should I sell early.
Here’s the answers:

We often buy one and two year out LEAPS on stocks we believe have a strong upside potential, and we buy to hold until expiry.
At the same time if we see strong 20 to 25% returns on the position within a two week period after buying we often sell out, and re-buy the same position anytime the market lowers, and continue to do so over and over again.

Last year, as an example, we traded a one-year LEAP on McDonalds 8 times profitably, and sold at expiry for a 61% return. Coupling all of our positive returns together we traded the position 9 times and made over 300%.

The key here is what we teach all the time: Learn the option. Fall in love with a specific option so that you can follow the stock (or the index) and know what public reaction will be on the option itself.


So, what’s to trade?

Nothing right now. If you hold good profits on many of our open positions, as you should, take partial profits if conservative, as the market has more opportunity for downside than upside, although we believe the upside momentum may continue with only a short correction.

Despite all the money the GOP is spending on lies and deception if you study what has been accomplished in two years, considering the state of our economy and what has been building for 15 years, we do not have a socialistic President, but instead one dealing with a corrupt Congress.

The Pee Party, funded by Karl Rove, is right in “wanting change” and “wanting to oust the corruption”. This is the same fodder that Obama wanted in “change” and it’s much more difficult than it appears.

Just imagine Christine O’Donnell in the Senate. Imagine the naïve and blind sitting in Congress with the corrupt and slimed. Nothing will change.
Instead, fight for change within the channels we have. Stop the GOP from holding every vote back, and have the facts when one talks about the massive debt.

America is awaiting the flow of Fed dollars, as is the world, and its’ why the dollar has so devalued (Bernanke’s plan) and more debt will be created.

We’re active in TIPS (Treasury Inflation Bonds) and have a strong, strong portfolio with good stocks, that all pay dividends. This way you gain even if the stock is short term losing, and you gain by higher dividends than the CD market will pay.

Watch our daily BCO alerts this week. We will be trading, but only when we see firm market bias, or a stock that is ignoring market protocol.






Be Well, Listen Intelligently; Question all Facts, and Show Compassion.


Floyd at OEX

Trade in a Zen Way

Let’s lead off with what an extraordinary week we had, both in OEX Option profits (7 trades successful, 22 to 57% profits), and what the market did, Thursday within 12 points of 11,000 on the theoretical Dow, and moving back to the 10,700 Fibonacci re‐tracement, holding, and returning back up. Higher highs. The bulls were active.
Panera hit a 52‐week high.
BMY hit an 8‐year high.
Gold hit an all time high.
Silver is close to breakout and strongly up, approaching its top.
The shift of the market is now moving from the large cap to the small cap in general shifts as the market makers shift to entirely different sectors.
We’ve been aggressive in giving you recommendations, and were profitable 54% on our Apple Call sold last week.
We will have a new recommendation this coming week on a long‐term leap. I promised this for today, but I want to study just a few more things.
Any correction, and my Dow Projection follow, will only be a “good sell” before more upside.

Theoretical Dow Projections:
Here were our Dow projections that ran over 21 consecutive days, one of the longest runs weʼve seen.
So first, hereʼs what we said and showing you the entire range. We've noted where we believe we'll have support or resistance, but we have been extraordinary in our projections in the past 30 days. Let's hope we can do that again.

9950-10050-The struggle point 10,118-10,250-Strong Support lines.
10,416-Resistance- and Support. On any move the market seems to hesitate here. We believe this may be our deepest bottom if this market corrects.
10,550-Resistance 10,676-Strong Resistance
Our basic rules of thumb on Dow projections: When the market drops it typically moves to a total of 584 points down, in periods of time. Any move up that holds over 100 points by day end typically ends a downside, and begins an upside to the same 584 area move up.

Last week we struggled in the ranges around the Fibonacci retracement.
10,746-10,787 Fibonacci Resistance and Retracement level

Now, letʼs start fresh. We hit every level in 21 days, even down to 10,050, and closed Friday at a theoretical Dow top of 10,9000.
Much of the week the market held at 10,746 area, and truly struggled before the 200 point run up on Friday.
Hereʼs how we see the Dow in the coming week. Weʼll start “to the top”.

11,250
This would be bad news because no trends should be extremes, or they lead to reverse in extremity.
10,950-11,127 Market potential first top
10,746- Likely struggle 10,676-Support line. The market may move here in downward spurts.
10,550-Support and Resistance Line 10,416-The market has hesitated here several times.

Alan Austin with Health Connexion was introduced to me by Johnny K, our subscriber with brain cancer still spiritually strong and fighting the odds. Johnny and I met and he recommended a supplement called Juice Plus, and that his friend Alan the trader sold it.
A relationship started, and I now buy Juice Plus from Alan (it’s a multi level program) with a hell of a product. And we’ve talked trading, as he is a professional trader, as Johnny had been when our Advanced Mentoring student got “incurable brain cancer” and is living to live.
I became a true believer in the product, and we became friends, finally starting to talk about the market:
“I prefer options on underlying stocks priced from 30 to 100 or more (FFIV, VMW, BIDU), but I will trade options on smaller stocks down to maybe 15 for special situations. Underlying stocks of $10 and below I will trade as stocks only.
I usually trade higher priced stocks' options about 4 weeks out, ITM a strike or 2, and I like to be closed within 5 days and up to 2 weeks. With just 2 weeks left to expiry, I will really look to be selling at any decent price. If I buy 6-8 weeks out, I am ATM or OTM by a strike, maybe 2. I don't buy more than 10 weeks out, except sometimes...
I will second buy to add to a position only on a lower price, averaging down, but I have to like the chart and feel that my entry timing was just a bit off. For options that have given me a nice profit, I will close out and step up a strike at a time for a new position, also stepping out a month when appropriate.
With the recent September rally in stocks, the buying made its way from large caps to mid to small to speculative, for the first time in quite awhile. I like to trade speculatives when this happens, so I did some scans a couple of weeks ago, and I had already been trading URRE, and then I found REE and MCP.
Well, REE and MCP are just a couple of hot momentum stocks in the rare earth elements space that came into favor quickly. I liked the charts and knew I would trade REE as a stock and MCP as options, which fall a little outside the norm above.
I have traded REE in 4 different accounts, several times each. Started buying it under 5 and rode it to 9.5, making multiple trades according to its movement. Have won on all trades so far.
I decided to trade MCP with the Dec Calls. These momentum stocks can dive quickly sometimes, and so I wanted time on my side, so I went further out than usual. I started with the Dec 22.50 calls, which were a little OTM. Traded a few times, all good, then stepped up to the Dec 25's as the stock progressed. Traded those several more times, all good, and selling as high as 6.50 yesterday. Today I saw the opportunity @ 2.65 and BTO a block... come on, it was 6.50
yesterday! We are talking December! Anyway, got the nice fast 4-hour pop so took the 58% and sold @ 4.20. I still have another block @ 4.30 avg cost in another account, so am still comfortable with those. especially after taking a
quick profit today.
A more typical trade for me is this one... I BTO some CRUS Dec 16 Calls on Sep 22, last Wed. I sold today, 5 sessions later, for +65%. I had my reasons for the buy last week. Then Cramer mentioned last night that he liked it, so there was a pop today on volume. After I sold, I still like it, so I BTO the Dec 17.50's. Those are +13.7% tonight...
I have not been trading many options recently because the market has been less steady than it was mid 2009, and that is also why I am going out into December when I do trade something. I just don't trust it to make a lot more progress without a correction, but it might... I just want some time buffer for this reason, and will take less leverage as a result.
Anyway, REE and MCP are just crazy stocks that yield fast results if you get on the right side of them. I am also trading URRE, and even SIFY, which has a lot of negative chatter, but the trade makes $$$$$$$$ just the same!!!! “

Alan got me excited, as trading breakout or momentum stocks Blue Chip Options has been doing for years, stopping two years ago as the market collapsed.
I suggest you each begin charting every stock listed above and following it closely.
Some may only be able to trade as stocks, and some may trade as options, but be cautious if the options are “thinly traded”.
You have enough ammunition to chart any signal and play it. Each of these are “live”
Trade in a Zen Way. See the trade not as war, but a move, and a study of yourself.
Be Well

Trade with Calm Floyd at Blue Chip Options

Dow Theorists do not yet see a buy signal. Many investors do. Here were our Dow projections that ran over 21 consecutive days, one of the longest runs we’ve seen.
So first, here’s what we said:
9950-10050-The struggle point 10,118-10,250-Strong Support lines.
10,416-Resistance- and Support. On any move the market seems to hesitate here
10,550-Resistance 10,676-Strong Resistance
Our basic rules of thumb on Dow projections: When the market drops it typically moves to a total of 584 points down, in periods of time. Any move up that holds over 100 points by day end typically ends a downside, and begins an upside to the same 584 area move up.
If, however, the market momentum is strong any reversal move can stop near a drop between 239 and 259 points
10,746-10,787-Fibonnaci Resistance and Retracement level
Now, letʼs start fresh. We hit every level in 21 days, even down to 10,050, and closed Friday at a theoretical Dow top of 10,9000
Much of the week the market held at 10,746 area, and truly struggled before the 200 point run up on Friday.
Hereʼs how we see the Dow in the coming week. Weʼll start “to the top” 10,950-11,127 Market potential top 10,746- Likely struggle 10,676-Support line. The market may move here in downward spurts
10,550-Support and Resistance Line 10,416-The market has hesitated here several times 10,250-Resistance. Lowest low we see
Forgive me, but the USA is close to imploding from stupidity. People are being elected in primaries based entirely on false facts and Roveian manipulation. Feel free to believe Obama the devil or a socialist, but make note of a few things:
1. The deficit was out of control when Obama took office.
2. “Deficits donʼt matter” was Bush/Cheney ideology, but now the
same spending seems “the end of the world” and lead in to
socialism.
3. Few Americans even understand economics at all, yet I hear every
day “he is spending all our money”. But no one will give up that socialist social security, which with Medicare takes up 2/3 of our deficit.
4. Republicans have been great at mud slinging, stopping bills from passing, but have yet to provide even ONE detailed suggestion on what THEY would do, and who their leader is. Could it truly be Sarah or Christine: ARE we out of our minds?
It is this that will destroy our country:
http://www.washingtonpost.com/wp‐ dyn/content/article/2010/09/23/AR2010092306836.html
or perhaps even better said by Pulitzer Prize winning economist Paul Krugman:
http://www.nytimes.com/2010/09/24/opinion/24krugman.html?_r=1&hp
__________________________________________________________________________________________
*In July TD Ameritrade reported that 22% of all options traded hit an all time on weekly items, and that all brokerages have been reporting much more interest in weekly options.
*The market is showing low volume for three reasons:
*People are scared shitless, and investing in bonds *There are 1/3 less hedge funds than a year ago *Stocks suck at earnings. What we earn we soon give up, except in options. In other words whatever we make in a month is reversed quickly so we lose the gains.
There are 30 weekly options available besides indexes options, which we only trade monthly’s on, and they include popular stocks like Apple, GE, and Micro Idiots (also known as Control/Alt/Delete, or MSFT)
Ex: You own shares of Google (GOOG), which are trading around 490.00. For about $11.00 you could buy a put option, which allows you to sell the stock if the price falls to below $480 at any point in the next month. BUT, for $2 you buy a put that allows you to sell the stock if the price falls below $480 in the next week.
If the stock goes up your option will expire worthless and you would be out the premium. However, if the stock falls below the premium price the investor could make a big profit.
You can buy a weekly call option with a strike price 1% above the price of the underlying stock for about half their value. A 2% move up could double your money, if in the right direction.
With the weeklies there is more risk, but everything is cheaper. One last example: If you own Amazon calls, AMZN trading at 140.00, and SELL Amazon puts you would be obligated to hit your exposure if the stock drops 17%; you would have to buy the stock at the same drop if the stock fell only 6%
We see weekly options on stocks like Apple, or GE as “falling in love” with an option, as we do with www.oexoptions.com, where one follows the bid/ask and 1 to 5 minute PNF charts on a daily basis.
We believe the FEDS are handling inflation/deflation well, and knowing where to spend. We further believe that less than 12 men in the world truly understood what the banks had done to us (not that we gave them all this greed money‐the Bush stimulus just before leaving office, all for his cronies) to Obama/Geitner first stimulus.
At the time all this occurred more money was being bet on cash derivatives than there was money in the world. This was already in place when that “liberal” came in office. This also confuses me, as it was conservatives that did it.
Stock Updates:
PAAS and SLV are up over 20% CEF, our bullion fund is up 17%. All three of these holdings, with silver in the mix, are long‐term hedges.
GLD is approaching all time highs, has broken through resistance, and is either due for a great fall, or the FEAR will take over.
Every holding we have in core funds pays a dividend. McDonalds, promoting obesity to the world, which we own, increased dividends by 11%.
NFG turned from a 10% loss to a 2% gain as winter oil/gas heating picks up.
Exxon Mobil remains our largest core holding in energy, followed by Chevron and Conoco Phillips. Oil will surprise us with the upside at some point.
Zweig Total Return Fund (ZTR) remains a safe way to invest in Treasuries (there is room for more upside, and high AAA bonds.
At least 20 to 25% of your assets should be in Gold, Silver, and short‐term bonds. Cash, worthless that we have made it, is still our best safe tool for any step.
We have sold all options held , including Apple this week, for a profit.
Stock Options have returned, after fees, 40% on average from January 1st, with 27 wins, and two losses.
Successful traders:

Follow rules
Study our work on the website and ask questions
Believe all facts to be false until proven otherwise.
Question Authority. It is the key to your survival.

Be Well, and Trade with Calm Floyd at Blue Chip Options

Fear and Greed

Review our Dow projections carefully, which have now been in affect for almost 21 days, still operating within a 584-point range.
We believe there is a 60% chance the market could move to 10,650 to 10,746, the top Fib retracement, a 20% odds the market will hesitate no higher than 10,550, and a 20% chance the market could reverse to the 9950 to 10050 area, before another attempt at upside.
Our projections remain on track and hitting each step:
9800-Strongest Resistance, the market seems to bounce from here
9950-10050-The struggle point 10,118-10,250-Strong Support lines. 10,416-Resistance-possible highest top
10,550-Resistance
10,676-Strong Resistance
Our basic rules of thumb on Dow projections: When the market drops it typically moves to a total of 584 points down, in periods of time. Any move up that holds over 100 points by day end typically ends a downside, and begins an upside to the same 584 area move up.
10,746-10,787-Fibonnaci Resistance and Retracement level
________________________________________________________________
Therapy is where the patient identifies his traits and character logy and learns how to change, or deal with them.
Many psychologists and psychiatrists spend their time with patients while the patient lies to them, never tells them the “truth” or the whole story. The Dr. will not know what the real truth is until the patient is able or willing to expose themselves to the physician, or to themselves.’
This holds true with Stock Traders who all suffer their own emotions, issues and grief’s, and have their own torments in addition to suffering with the natural traders lament of when to buy and when to sell, and more importantly, how they as a trader deal with FEAR and GREED.
FEAR occurs both in “should I buy now” and “should I sell now”
GREED occurs both in “should I sell now” or hold on, or “should I wait a little longer to buy, to let the stock go down more, before I latch on and carry it up, thusly showing GREED.
System logic traders follow flexible (not rigid) rules to trading. Quantative logic traders trade by math algorithm’s that are mechanical and take the emotion out of trading.
OEX Options.com, our sister company, is a system logic methodology that uses “flexible” parameters around basic sets of “when and when not” and how and how not”. We trade indices like the OEX pitting our trading ability against the others that are selling or buying, hence the spread between bid and ask.
As an example we recently recommend trading PAAS (Pan American Silver) ONLY when it had moved UP to 24.70. On a PNF chart we were waiting for confirmation of upside before entry.
As the stock hit 24.70 we recommended PAAS OCT 16 2010 23.00 CALL which hit 53% returns within 5 days.
This, again by example, is an October call, giving us until October 15th to sell out for profit or loss.
Here’s a view of PAAS:
Note the stock is now nearing a double top at $27.00 and if it rises above $27.00 to 28.00 will have hit all time recent highs since May of 09.
Note the stock is now above the simple moving average and hitting the Bollinger Band top.
Watching Silver (SLV) which we also own, and being believers that Silver many have more long term upside than Gold for the short term, (GLD) which we also own, traders will have two choices:
1. Lock in profits now at 53% returns.
2. Sell partials (at least 1/3) of your position at the top we are at or near, and hold the final position for more upside, having already gained profits to cover their buys. This is called “letting an option run”
3. Hold it all. Wait for the stock to hit over 28.00, to new highs, and reap much larger returns.
Fear and Greed will play a huge role in what decision the trader makes. For the trader that bought just the stock, they know what could be a stop loss ($23.00) if trading “tight” or if risk oriented and wanting a deeper stop loss or a place to take a larger second buy of the stock, watching for a drop to $20.00, the most recent lowest low.
Who you are is defined here. How you emote, how you feel, where you have FEAR or GREED, all come into place.
Now, in turn, let’s look at GLD and CEF, both stocks we own, not options. GLD is simply gold and CEF is gold and silver bullion, on the Canadian market. And SLV is the indices like GLD that holds only Silver. We own all three:
We would begin watching Gold (GLD) for the highest top at 1290.00 per oz, and a stop loss near 1200.00
This fund has shown a double top break out, confirming the same as PAAS that silver is on an upswing. We’d look for tops at $22.00, and stop loss at 17.50 for tight traders
This stock shows lower volatility, and lower volume in trading. Because it combines Gold and Silver in real assets and is not traded by the minute as GLD and SLV often are we would see this only as a long term hold, using both the Gold and Silver highs and lows as recommended points to exit the position.
However, for those keeping 15% of their trading capital in real assets, CEF is the best long­term trade for steady accumulation.
Long­term 10­year treasuries have dropped 2.5% in two weeks, raising their yield. We’re out of TLT, as you know, and have re­invested in treasury inflation bonds, TIPS, which we will hold while the world economists argue whether we are approaching deflation or inflation.
We’d like to cover 4 more holdings this week, all part of Floyd’s perma bull thinking on oil. Most systemologists see energy stocks on the downturn, which they are, and Crude Oil not hitting and holding above 78.00.
Short term this is true. Long term we think not, and have invested in three stocks that all pay dividends, that all have lots of cash, and all also invest and reconnoiter around liquid and natural gas also.
COP­Conoco Phillips. Buffet owns it, and so do we. Buy and hold.
XOM­Exxon Mobil ­ This is our largest holding. ExxonMobil has more money than most countries combined and is undervalued in the market. Continue to buy.
Chevron­CVX­This is another stellar, volatile energy stock we feel undervalued in the market.
Traders should own the stocks, and be accumulating them all on dips, all with a trailing stop loss of 20 to 25%.
If option trading these positions we only recommend long term calls that are at least 6 to 9 months out, and being ready as a trader to hold and accumulate on volatility.
If we can learn compassion we can build peace. If we can learn not to fight “dirty” (the GOP not allowing any bill to pass) we foster dissent. Dissent builds resentment and anger, and irrational behavior.
When we are smart enough to not even read the news bytes on a Sarah Palin we have begun to understand that reading false facts and manipulation only confuses the issue, for the lady with the “good looking legs and the new boob job”, and begun to understand self promoting vs. content.
Have a good week trading.

Self Promoting versus Content

Review our Dow projections carefully, which have now been in affect for almost 21 days, still operating within a 584-point range.
We believe there is a 60% chance the market could move to 10,650 to 10,746, the top Fib retracement, a 20% odds the market will hesitate no higher than 10,550, and a 20% chance the market could reverse to the 9950 to 10050 area, before another attempt at upside.

Our projections remain on track and hitting each step:
9800-Strongest Resistance, the market seems to bounce from here
9950-10050-The struggle point
10,118-10,250-Strong Support lines.
10,416-Resistance-possible highest top

10,550-Resistance

10,676-Strong Resistance
Our basic rules of thumb on Dow projections: When the market drops it typically moves to a total of 584 points down, in periods of time. Any move up that holds over 100 points by day end typically ends a downside, and begins an upside to the same 584 area move up.
10,746-10,787-Fibonnaci Resistance and Retracement level

________________________________________________________________

Therapy is where the patient identifies his traits and characterology and learns how to change, or deal with them.


Many psychologists and psychiatrists spend their time with patients while the patient lies to them, never tells them the “truth” or the whole story. The Dr. will not know what the real truth is until the patient is able or willing to expose themselves to the physician, or to themselves.’

This holds true with Stock Traders who all suffer their own emotions, issues and grief’s, and have their own torments in addition to suffering with the natural traders lament of when to buy and when to sell, and more importantly, how they as a trader deal with FEAR and GREED.

FEAR occurs both in “should I buy now” and “should I sell now”

GREED occurs both in “should I sell now” or hold on, or “should I wait a little longer to buy, to let the stock go down more, before I latch on and carry it up, thusly showing GREED.

System logic traders follow flexible (not rigid) rules to trading.
Quantative logic traders trade by math algorithm’s that are mechanical and take the emotion out of trading.

OEX Options.com, our sister company, is a system logic methodology that uses “flexible” parameters around basic sets of “when and when not” and how and how not”.
We trade indices like the OEX pitting our trading ability against the others that are selling or buying, hence the spread between bid and ask.

As an example we recently recommend trading PAAS (Pan American Silver) ONLY when it had moved UP to 24.70. On a PNF chart we were waiting for confirmation of upside before entry.

As the stock hit 24.70 we recommended PAAS OCT 16 2010 23.00 CALL
which hit 53% returns within 5 days.

This, again by example, is an October call, giving us until October 15th to sell out for profit or loss.

Here’s a view of PAAS:


Note the stock is now nearing a double top at $27.00 and if it rises above $27.00 to 28.00 will have hit all time recent highs since May of 09.

Note the stock is now above the simple moving average and hitting the Bollinger Band top.

Watching Silver (SLV) which we also own, and being believers that Silver many have more long term upside than Gold for the short term, (GLD) which we also own, traders will have two choices:

1. Lock in profits now at 53% returns.
2. Sell partials (at least 1/3) of your position at the top we are at or near, and hold the final position for more upside, having already gained profits to cover their buys. This is called “letting an option run”
3. Hold it all. Wait for the stock to hit over 28.00, to new highs, and reap much larger returns.

Fear and Greed will play a huge role in what decision the trader makes.
For the trader that bought just the stock, they know what could be a stop loss ($23.00) if trading “tight” or if risk oriented and wanting a deeper stop loss or a place to take a larger second buy of the stock, watching for a drop to $20.00, the most recent lowest low.

Who you are is defined here. How you emote, how you feel, where you have FEAR or GREED, all come into place.





Now, in turn, let’s look at GLD and CEF, both stocks we own, not options.
GLD is simply gold and CEF is gold and silver bullion, on the Canadian market.
And SLV is the indices like GLD that holds only Silver. We own all three:



We would begin watching Gold (GLD) for the highest top at 1290.00 per oz, and a stop loss near 1200.00



This fund has shown a double top break out, confirming the same as PAAS that silver is on an upswing. We’d look for tops at $22.00, and stop loss at 17.50 for tight traders



This stock shows lower volatility, and lower volume in trading. Because it combines Gold and Silver in real assets and is not traded by the minute as GLD and SLV often are we would see this only as a long term hold, using both the Gold and Silver highs and lows as recommended points to exit the position.

However, for those keeping 15% of their trading capital in real assets, CEF is the best long-term trade for steady accumulation.


Long-term 10-year treasuries have dropped 2.5% in two weeks, raising their yield. We’re out of TLT, as you know, and have re-invested in treasury inflation bonds, TIPS, which we will hold while the world economists argue whether we are approaching deflation or inflation.


We’d like to cover 4 more holdings this week, all part of Floyd’s perma bull thinking on oil. Most systemologists see energy stocks on the downturn, which they are, and Crude Oil not hitting and holding above 78.00.

Short term this is true. Long term we think not, and have invested in three stocks that all pay dividends, that all have lots of cash, and all also invest and reconnoiter around liquid and natural gas also.

COP-Conoco Phillips. Buffet owns it, and so do we. Buy and hold.
XOM-Exxon Mobil - This is our largest holding. ExxonMobil has more money than most countries combined and is undervalued in the market. Continue to buy.

Chevron-CVX-This is another stellar, volatile energy stock we feel undervalued in the market.

Traders should own the stocks, and be accumulating them all on dips, all with a trailing stop loss of 20 to 25%.

If option trading these positions we only recommend long term calls that are at least 6 to 9 months out, and being ready as a trader to hold and accumulate on volatility.


If we can learn compassion we can build peace. If we can learn not to fight “dirty” (the GOP not allowing any bill to pass) we foster dissent. Dissent builds resentment and anger, and irrational behavior.

When we are smart enough to not even read the news bytes on a Sarah Palin we have begun to understand that reading false facts and manipulation only confuses the issue, for the lady with the “good looking legs and the new boob job”, and begun to understand self promoting vs. content.


Have a good week trading.

Historical Validation

Perhaps, just perhaps, the fact that “if you look back over the year, you will see the historical validation of the first trading day of the month having an “upward bias. We saw rallies on the first trading day of the month in January thru June. In July the market did not rally until the third day. And in September we saw an up day one and day a down, despite a hugely oversold market”

We saw this as a severe test, as did many chartists of the cash indices reacting in an oversold market.

Initially we saw a stronger summer, and a fall that led to more downturn. We may have actually seen a bottom instead this summer, followed by highs and ending last week UP, an unusual occurrence

To lead our discussion, an understanding of FACT vs. DESIRED FACT:

http://abcnews.go.com/Entertainment/wireStory?id=11542570

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WE believe Treasury Inflation Protected bonds (TIPS) remain a good investment, linked to the consumer price index, and yields are currently less than with a 10 year Treasury.

However, Treasuries, which pay no interest worth beans, are in a bubble.
For example a ten-year tip means annual inflation needs to rise only above 1.6% for TIPS to generate a better return.

With all the talk on” deflation” TIPS continue to sell, and we recommend them as a cash position alternative.

It is also interesting to note that short sellers were not aggressive this summer, despite the market weakness.

________________________________________________________________

We use high/low/open/close as a fundamental of our option and day trading, and it’s an important part of both candlestick charting where, for example, there are many types of single candles, each telling a different aspect of he battle just waged.

Point and figure will show where the stock is on a 1-minute increment, and enough minutes at looking at a minute and one begins to see cycles.

At the same time the trader using Pn F charting on a daily sheet is only seeing the close of the prior day, and if there has been no defined large movement, not even seeing the nuances of a move. This eliminates the noise. If trading to identify a trend, use point and figure charting. And remember:

1. Use 1 minute, 5 minute, 1 day and 1 week settings to get even more “feel” for the move of the market, without noise, and make changes on your charts from standard 3:1 ratios to 2. /. 50 just to see how the same chart can look differently from views of it.
__________________________________________________________________
I am copying over an article that well explains one view of excessive borrowing; much of what the GOP uses part of now, despite having left us with the last three Republican Presidents leaving massive deficits. Within the article, however, are the basic premises of “something to do”. Please remember as the Pee Party and the GOP have only told us what is wrong, but in no way have offered any suggestions on what else to do, except renew the tax exemption for the rich, and tell us we are raising too much debt.
Perhaps now that we have” won the war” in Iraq some of our massive spending there, all for naught, will reduce our deficit.

More likely we will use it to “win” the war in Afghanistan.

For the greatest country in the world we have never won a war without allies.

Here’s the study:

The New Republic: The One Way Out Of The Recession
by William A. Galston
The New Republic - August 26, 2010
William A. Galston holds the Ezra Zilkha Chair in the Brookings Institution's Governance Studies Program, where he serves as a Senior Fellow. He is also College Park Professor at the University of Maryland. He is the author of eight books in the fields of political theory, public policy, and American politics.
Average Americans are noticing what wise economists have been arguing for quite some time: Bubble-driven economic downturns differ qualitatively from standard business-cycle recessions. Not only do they go deeper; GDP takes longer to rebound, and job creation proceeds more slowly.
The mechanism is straightforward. As the value of assets used as collateral collapses, so does borrowing. This depresses consumption, and the real economy dips, making it much harder for businesses and households to service the debts incurred during boom times. Household consumption remains sluggish until debt is reduced to a level that can comfortably be serviced out of current income, a process that cannot proceed without an increase in the household savings rate. The larger the debt overhang, the longer it will take to work off the excess.
As recent as the late 1990s, total household debt stood under $5 trillion, roughly 90 percent of disposable income. After a decade-long borrowing binge, debt peaked in late 2007 at about $12.5 trillion—a stunning 133 percent of disposable income. According to the latest report from the Federal Reserve Bank of New York, the total had declined to $11.7 trillion by the first quarter of 2010, a reduction of $812 billion (6.5 percent) from the peak. During the same period, not surprisingly, the household savings rate rose from 2 percent to more than 6 percent.
While these are sizeable changes, there is good reason to believe that the process of household debt reduction is still in an early stage. Writing for the Center for American Progress, Christian Weller points out that total debt now stands at 121.7 percent of disposable income, still higher than at any point before the second quarter of 2005. In an analysis published in May of 2009, the Federal Reserve Bank of San Francisco suggested that the household debt/disposable income ratio might well have to fall much farther, to around 100 percent, a process that could take much of the decade, even if the household savings rate were to rise to 10 percent.
This extended deleveraging would have a substantial effect on the economy. The FRBSF estimates that it would reduce annual consumption growth by three-fourths of a percentage point from the stable-savings baseline, which would "act as a near-term drag on overall economic activity, slowing the pace of recovery from recession."
This is exactly what we’re now seeing. In a superb piece, The Washington Post’s Neil Irwin gets outside the Beltway and beyond its stale arguments to probe the real reasons companies aren’t hiring. His conclusion is worthy of extended quotation:

Many Democrats say the economy needs more stimuli. Business lobbyists and their Republican allies say it needs less regulation and lower taxes.
But here in the heartland of America, senior executives say neither side’s assessment fits.
They blame their profound caution on their view that U.S. consumers are destined to disappoint for many years. As a result, they say, the economy is unlikely to see the kind of unbroken prosperity of the quarter-century that preceded the financial crisis. . .
They see Americans for years ahead paying down debts incurred during the now-ended credit boom and adjusting spending to match their often-reduced income.
"It’s a different era," says Daryl Dulaney, chief executive of Siemens Industry, which has 30,000 U.S. employees who make lighting systems for buildings and a wide range of other products. "Our hiring and investment decisions have to be prudent and reflect that."

A different era ... How long will it take our policy makers and political parties to absorb the implications of that stark, undeniable phrase? When they do, they will realize that we have only two strategic options: Either we accept years of sluggish growth and high unemployment, or we shift to a new model that mobilizes the record level of private capital now sitting on the sidelines for public investments that will boost economic activity and employment in the short term, and economic productivity and growth in the long term, while generating rates of return sufficient to interest investors.
This is why we need a national infrastructure bank as the linchpin of a public investment strategy driven by economic analysis rather than congressional politics. Rather than bridges to nowhere, we need a bridge to the future. It’s time for hide-bound appropriators to get out of the way. [Copyright 2010 The New Republic]


This follows well the Floydian premise that “everything has changed”. Unemployment will stay high because companies make more money with fewer employees.
It will stay high because we are spending less money, the Global top 50 companies hold VAST amounts of cash from their restructuring, and many of the jobs lost are simply not going to be replaced.


We are perma bulls. Again, we believe each of the following stocks, energy related, that we own, are hugely going to benefit:

1. Exxon Mobil (XOM)-undervalued-BUY
2. Chevron (CVX)-strong on natural gas-BUY
3. Conoco Phillips (COP)-a Buffett holding on the forefront of new discoveries
4. NFG-National Fuel Gas-serving oil to the NE
5. ITC-a major infrastructural move to the changing of the grid.
Each of these are accumulate, and each are “close your eyes and hold” stocks.

________________________________________________________________
We will become bullish if and when the Dow tops 10,609 and holds. There is the same necessary trend line in the S&P500, where we must watch to see if 1040 is breached. If 10,609 is not reached we simply have a rally, and if S&P500 hits 1040 we have headed back to downside oblivion.

The NASDAQ we see as having the greatest potential for breakout. Tech stocks have taken a massive beating, and as we watch, we see lots of news that can trigger upswing:

1. Oracle, (ORCL), which we own just bought Sun, and has only upside, but is down.
2. HP, who are idiots for letting the CEO go, just paid huge premiums for a company that has never made a dime.
3. Google is now being sued by the state of Tx on their search engines
4. Intel continues to make brilliant moves
5. Apple is a good buying price, and held up well during the downturn.
This document is being written on an ipad, a completely ingenious piece of equipment that sells despite downturn


St. Louis Fed Reserve Bank of St. Louis President James Bullard has said “instead of pledging to keep rates near zero percent, that we should resume purchase of Treasury securities if prices begin to fall. He sees us as closer to the Japanese deflationary period, and that by doing so inflation will go away”.

As usual, this is another guy that never had a real job. Human psychology enters the picture and blows their quantitative analysis. WE see inflation as the greater issue, and its’ why we are out of Treasuries and into TIPS.


“Everyone you talk to thinks the dollar is going to collapse because of all the federal spending. Dumb. If the dollar were going to collapse, the bond market would be dropping and yields would be rising.”

It will take some time to unravel the world’s (not Obama’s) debt bubble. Most of this world debt is denominated in dollars. As the debt collapses there is no way to amortize the write off of the debt, and as credit card holders fail we see even more of the issue. Some banks are accepting 30 cents on the dollar for bad credit card debt. Trust me, credit card debt with the banks will be the next crash.

We are still strong believers in community banks reviving as the public finally realizes they have been raped multiple times by the big banks, and our investment in QABA-

Study this: http://www.etfexpert.com/etf_expert/2009/06/etf-expert-first-trust.html

Buy QABA and keep buying it.


Gold and Silver are on a run again. We bought in again at the right time, taking good profits, and entering again on the upswing. Gold could reach 1289.00. Watch for any close below 1225 as a bottom and a time to watch. We would sell at 1289 area, or at least reduce exposure.

With Silver we are very bullish. SLV is a good buy, even up 14% from our buy, and PAAS (Pan American Silver) we bought in on the upswing at 24.70, both call option and stock. We will continue to hold Silver, which we think has more strength short term than gold, and is more undervalued.


Deflation may well occur, and if so, it’s a good thing. Those with CASH will win.
It will end the debt bubble, and likely follow with a period of hyperinflation, making our situation seem even direr.


We consider this an excellent time to be investing in equities, as the majority pull out, and while we watch for a potential upside to the Fib retracement at 10,776.

And lastly, learn the lessons of life and trading:

1. Question all authority
2. Question all facts. Most are false
3. Have a basic “lack of respect” so you can see through the bullshit piled on you by the journalists and politicians
4. Question yourself or any “anti Obamer” as what should be done that is not being done, or better yet, what their plan is. I am always most amazed as we badmouth all that we do, but have no solutions.
5. Take nothing seriously.

Be Well and Do Good. Take Prudent Risk.


Floyd at Blue Chip Options

Follow the rules of Trading

It’s important we think of Dow projections to understand the condition of the market.

Here’s how I project the Dow over the next 7 to 10 day period:

Dow Projections:
9800-Strongest Resistance, the market seems to bounce from here
9950-10050-The struggle point
10,118-10,250-Strong Support lines.
Twice last week we hit theoretical Dow tops at 10,250, and 10,200 last Friday

10,416-Resistance-possible highest top
10,550-Resistance
10,676-Strong Resistance
Our basic rules of thumb on Dow projections: When the market drops it typically moves to a total of 584 points down, in periods of time. Any move up that holds over 100 points by day end typically ends a downside, and begins an upside to the same 584 area move up.
10,746-10,787-Fibonnaci Resistance and Retracement level

I use an exponential factor in H/L/O/C (High, Low, Open, Close and when studying or playing stocks or options focus on these factors first. I like the theoretical Dow, which shows the “true” tops and bottoms.

Want to understand our use of the theoretical Dow?
Study:
http://www.investopedia.com/terms/t/theoreticaldowjonesindex.asp




*Warren Buffet likes it, and I am a perm bull on energy of all types, I see much good in their $20 billion restructuring, and $10 billion to retire debt and buy back their own stock.
This is a blue chipper, with a dividend. Add it to our underperforming oil and energy core portfolio right now. We own XOM, and continue to buy and Chevron (CVX)
Conoco Phillips is an integrated oil major player. And a great symbol: COP
Buy it following the charts. Always buy up. We’d buy this at $55.50 and use a stop loss of $49.00 unless holding for the long term. If planning to hold for five years or more, just buy it.







The growing debate on whether GLD or SLV as an ETF is even real money is true.
Each of these funds “holds” actual bullion but issues their returns in Paper, or ETF stock, which to the true cautionary investor becomes suspicious as we realize there is no real “paper value”

ZKBGF

http://moneycentral.msn.com/companyreport?Symbol=ZKBGF
http://en.wikipedia.org/wiki/Gold_exchange-traded_fund

http://www.marketoracle.co.uk/Article9030.html

These three links will show you this Swiss fund, also available as a Silver ETF.
What the true Gold and Silver strategist is looking for is a fund that redeems in actual bullion.

We’re beginning research here.

In the meantime we find the Canadian Exchange Fund (CEF) remains an attractive and conservative way to hold gold and silver bullion.


Last week Pan American Silver (PAAS) hit our buy signal at 24.70 and we took entry in both long-term core positions, and as a call. Showing just trend lines, watch to see if 24.70 holds and begins upside. We’ll keep a tight eye on this for stop loss, or for a breakout stock.







I know you’ve been worried. Pages of Blue Chip without Floyd’s usual inflammatory and provocative liberalism. It’s because I’m tired. 23% of Americans believe Obama is a Muslim.
This is not just our stupidity, but pure Roveian (Karl Rove Theory of intimidation by false facts) politics, and our nation now blames Obama for what has been 40 years in the making.

And here I see how religious wars begin over stupidity. Religion breeds hate, it so appears.

Hmm, what I’ve always believed. Conservative with no vision are just like jihadists with a singular vision

http://www.huffingtonpost.com/markos-moulitsas-z/post_743_b_693281.html


Control your greed. Watch your fear. Follow the rules of trading and question the rules of life.

Be Well and Do Good


Floyd at OEX

Trade With Focus

The market all of last week showed bearish cycles, and most of 2010’s gains were wiped out beautifully with the downside. This will sure have the mutual funds that were buying so heavily near 10,600 wondering what they did.

Trading is always light in August, but we see another high that could develop sometime before the end of August, as the “end of the summer rally”.

As we write this week we intend to develop even more on our Dow Projections:

9950-10050-Likely Deepest Bottom

10,118-10,250-Strong Support lines. Thursday of last week we hit the 10,250 range, and by Friday’s futures last week there was already “confusion” in the market.

10,550-Resistance

10,676-Strong Resistance

Our basic rules of thumb on Dow projections: When the market drops it typically moves to a total of 584 points down, in periods of time. Any move up that holds over 100 points by day end typically ends a downside, and begins an upside to the same 584 area move up.

10,746-10,787-Fibonnaci Resistance and Retracement level.


Charles Nenner Research, who we believe have a firm handle on the market in general, have bottom tests of S&P 1197 and Nasdaq at 1800.

This same company seems Gold struggling at 1230, and is a Silver buyer on a close above 19.00.

We at Blue Chip Options remain a buyer of Pan American Silver (PAAS) at 24.60 or up. We do not want to buy this silver position until we see it show stronger upside on a PNF Chart. It’s very close, and we are more bullish overall on Silver than Gold as a hedge against inflation or deflation at this time.




Here is our opinion on the ongoing debate as to whether we are in inflation, or coming deflation.
During the two years we suffered true recession, before the Great Recession, the Bush Administration and numerous analysts (at that time not yet caught, jailed, or out of a job) argued that we were not having a recession.

This was a true sign, in our minds, of stupidity. We were in a clear recession, giving us every sign that things could be worsening, but were constantly placated by Bubbles Greenspan and Big Ben Bernanke that all was okay.

Of course, things weren’t. The entire amount of the money in the world times four were being bet on credit derivatives. Translated: money was being bet that didn’t even exist, even on paper.

That is much the argument now between deflation and inflation, and we think completely irrelevant.


The Euro is a big part of the overall financial picture, with FEAR brooding on decline. We see the Euro perhaps hitting lows of 129.60.


Oil surprises us constantly, with crude hitting Point and Figure sells at 78.60.
Charles Nenner Research studies oil carefully and is watching for a low to 75.50 to confirm that we have hit our high, and that oil could lower to 70.00.

One hurricane of real strength will change these charts in minutes.


In an alert this last week a trader had written, “I am panicked to invest in stocks, Floyd. Nothing I choose on my own holds up, and the constant whipsaw makes me ill, I make money only to lose it. What would you do in the Blue Chip Option fund if you wanted to not look at the market on stock holdings, and then just play options?”

This is a very sound question.

We answered as if we would invest:

Buy three Vanguard low cost funds:

Total Stock Market
Total Bond Market
Total Global Market

Reinvest dividends, and continue to buy on any dips. Never even follow the holdings.

Couple this with a core position in Canadian Exchange Fund (CEF) that holds Gold and Silver bullion, and CASH (short term Treasuries)

Traders that want the lowest risk long-term investment strategy will do well with this simplified “Gone Fishin” Portfolio.

Then, trade options, and keep these other holdings long term.


Many traders have also written recently about our use of 2X of 3X Bull and Bear ETF’s or their corresponding options. It’s simple what they offer. They bet multipliers of options on UP moves, which cause stocks like FAS etc etc, all the Proshares ultra shorts and ultra longs to hugely fluctuate.

It’s a great way to get rich right now, and an equally great way to lose your complete ass.
We find the various 2X and 3X funds are often not as they first appear and with whipsaw as strong as it has been, and the advent of the electronic high-speed traders whipping and confusing all momentum, we’re simply steering clear of them.


We have been profitable on all options that were held open over the past 10 days, except for our October 290 Call on Apple (AAPL), which is down 50%.
We continue to hold this position. Some of you have taken larger second buys, and others still hold for more downside. We will not stop loss this. Apple, when you view it carefully, under several views, appears ripe for a calming, and more upside. We think Apple will consider stock split or a dividend of some sort, as they hoard more cash than the U.S. has.
However, Jobs is an autocrat, and a brilliant one, in how he values and markets his company, and it’s up 2500% in ten years. Perhaps, for those that only buy “dividend paying stocks” the value of the dividend is in the massive increases in stock value, and great products.
(Attached document also on charts if these do not show)


For those of you trying to sell near what we think will be the top for some time, begin selling at 10,690. We could likely see a high sometime this week.
It would be a natural for a early rally, and a shift on expiry day, with a larger downturn.

Nonetheless, we do not see good things for the market into the fall. Certain stocks are safe, but even they will fall. Unless something happens that aspires Republicans and Democrats to see to agree on anything, we will deadlock our President, and nothing will be done.

We will most certainly then require another stimulus, what Geitner and Volker thought at first, and what the President knew he could not sell to the American people.

Question authority. Question facts. Watch emotions. Trade with Focus.


The political situation in the country is a large part of the lack of renewal, and the whipsaw.

Simply put, the 50 top multinational companies are all paying good dividends, have assets all over the world, and are just hoarding cash. All of them are really doing well. Few pay attention to these hoards of cash, and instead follow the short-term trend of the stock, missing the true nuance.

This same nuance takes place in the fact that the top 50 are really doing well.

Here's What We See

Here's what we see, using the Dow and the S&P:

1. Downside is clear if and when the S&P closed below 1086, the Nasdaq below 1850, and the Dow at 10,147

2. We see the deepest downside 10,127-10,250 unless massive world news triggers events, but even then believe the market will hold near 10,000

3. We see first tops at 10,746, and the possibility of the market summer rallying to potentially even above 11,000. If this occurs we will begin selling most we own in Blue Chip Options.

4. It is more likely for a larger correction if the market euphorically rises again to the 11,000 area.


Silver remains a long-term play, but watch carefully if it closes below 18.20
And note again, if Pan American Silver closes above 24.60 it’s a buy, and not before.
We want to see a solid return to upside for PAAS.

Short term we may see a top in silver, just as we are seeing gold hold at 1200.
Both are temporary but Gold may have more downside, while silver shows more upside.

Our best investment is AU (Anglo Ashanti), which, if one holds a large block of stock (20k or more) can return up to 1600.00 every few weeks as the stock vacillates 10% up and 10% down. I personally have sold 400 shares in/out and profited 4 times on this in the past 6 weeks as the Gold market was topping.

We will hold this one, and be in and out of Silver, and have our eyes on PAAS.

Remember, at Blue Chip Floyd will almost always “sell us out of position 10 to 15% from the market top”. We’d rather leave the and higher risk to others.


I see the market in a trade range and a time to take profits on upside, sell options on “fair profits”, and watch the mood carefully. Doomsayers see the great correction, in which FAX and FAS (study these ETF’s) will become good methods of high-risk returns, but they remain high-risk methods to shorting the market.

Option Report:

(Email anytime if you need the signals themselves as we do not keep up with options on our website)

*Google-hit 37% returns first week
*Mosaic-hit 37 to 41% in 14 days
(Both could still be held in partials, but 1/3 of the profits should have been taken)
*Amazon-down 21%. Hold
*Apple-two buys have been made on this option or it was stop lossed. If two buys have been made, we’re down 18%. We’ll hold for now and watch carefully.


Oil remains confused to us. If it holds below $79.00 at any time it may have topped, but we still consider our oil stocks huge value buys, and have seen ExxonMobil, our largest holding, come “up “ to only 5% down.


I see spending in the economy, and the top 50 global companies just rolling in the dough, and companies learning that downsizing merely removed the bloat, and we are now responsible for creating NEW jobs.

In my own small firms that I own I have found in cutting staff, as I’ve had, that people suddenly work harder. And, that I probably had been employing too many.


We hear that Americans want to work. Are willing to work. I believe this is true.
And I also believe that the majority of our labor force are overweight, and do not have a high work ethic.


I recently gave a seminar to 18 small business owners (500,000 a year to 5 million) and I saw work ethic in each owner, and their comments that as they downsized they have learned more about did not get done.

This is not Obama’s lack of jobs. This is America’s last of forethought.
As our importing increased, as did our exporting, more jobs moved overseas not because of laws, or “dollar raiding to enter”. Normal free enterprise occurred and the cycle of life continued. Our economy is now the U.S. and U.S. made may be harder to achieve. We must create immediate jobs, sure, but bigger picture…

The jobs during Bushy time were primarily and so ironic, in the oil, banking and real estate construction boom (blame going right back to Bubbles Greenspan)


I believe we must have a deficit, and we must pay for our mistakes. I also believe that Keynesian economics will hold true here where the world debt of paper becomes valueless, and the commodity that is valued (gold, to beads) will have allowed us to “pay off” our mistakes.

Millions of lives have been affected by the change of cause and effect, supply and demand, and the “paper value” collapsed.
At one time Geitner and Paulson saw the screens and could figure that more money was being bet on derivates than there was in the world.

I’m watching on two new stock options, and just waiting out in the market and I’ll report in.

Be Well and Do Good

No Free Lunch

I received the following email “advertisement” this past week after Bernanke spoke:
“Fed Chairman Ben Bernanke Drops the HAMMER!
*** "This is the worst labor market since the Great Depression." ***

*** "The market remains weak, with the overhang of vacant or foreclosed houses ... ***
 
*** "...uncertainty about the outlook for growth and unemployment as greater than normal....." ***
 My Friends, This Market is Fragile and can CRASH ANY DAY
NOW. 

This is a DIRECT WARNING from the FED CHAIRMAN.

 It can not be more clear! I warned about this LAST WEEK! 

 I'll Tell you "What To Do
Right Now to PROFIT BIG. Options that can skyrocket 300% 400% even 700%
800% or more.
This time around Cash In on the Turbulence, Cash in on the Crash with a small cash outlay.”

As I read the above jibber jabber I thought this might be what the Pee Party reads and believes and I simply am awestruck that a company would attempt to advertise so deceitfully, ready to let people lose thousands of dollars “dreaming of the 800% return.
Instead, Iʼm jumping up and down on our play with Mosaic Calls that are up 49% from purchase in a 5 day period. MOS SEP 18 2010 45.00 CALL we just recommended, and itʼs up 33% as of Friday, and hit 49% highs the day prior. We consider returns like this EXTRAORDINARY, meaning truly out of the ordinary, and not to normally be expected in most trading.
Reality. There Is no such thing as a free lunch. As Malcolm Gladwell teaches us one becomes an expert at something with 100,000 hours of work at it.
We did this a few months ago with our TLT call that hit 60% returns, albeit a long call that we had bought, and most traders sold out. Some may still hold, and the option is in the red. There come the nerves of steel, as there are another 6 months in this option.
And we hope to do it now while we think the market will rise short term, and we will begin liquidating some more of our holdings, locking profits, as the longer term view of the market is that it will end.
The debt the world has built up over the last 30 to 40 years is essentially “being liquidated”; the house of cards coming down.
Keynesian economists will steer us that the ongoing debt will essentially recycle and by itself creates no danger, as long as growth continues.
Others see it as the debt of the world eventually collapsing, not overnight, but over a tell telling time of high unemployment, homes being rented more than bought, and people working into their late 70ʼs. All of that time the dollar will be collapsing, but actually the dollar will be increasing.
The value of companies, the way we trade to create market share, this many think will end in just a few short years, and that there will be no stock market as we know it, no trading as we have it, and values having been changed. A perfect example of a “rock is not hard”.
As we trade options, we trade for fast profits. As we have traded stocks weʼve often bought on dips, but will not be doing so now, but instead selling for profits at various market tops, ALWAYS leaving money on the table for someone else to make. Rockefeller made his money by selling just before the top, and my Dad taught me well to always have a regret that I could have gotten more, because with the gains I got I could watch as the market or stock went “just a bit higher”, leading to GREED.
It confuses all of us. For example, Floyd here got us out of the Gold and Silver market when gold hit 1170-1180 ranges, and we missed the trade range increases to 1280. But as Gold has fallen we bought back in, and Iʼm not sure I should have recommended Gold. From a contrarian perspective I see tops no higher than 1270, and soon leading to lower lows For the short term. Gold may NOT be the frenzy.
Silver, however, should be, and to most is not even noticed. We own SLV and CEF which holds silver billion.
Here are recommendations to our portfolio:

Decrease or do not buy more of GLD.
Increase your position in SLV, the counter index for Silver to Gold. In Blue Chips we own Silver, in three ways: a.through Canadian Exchange Fund, (CEF), that holds both gold and silver bullion b. through SLV or SSRI, both excellent Elfʼs c. through shares of the Pan American Silver Fund (PAAS)
This play is a stock, and making trading news:
“Shares of Pan American Silver Corp. edged up $0.33 (+1.44%) to $23.25. The stock closed at $22.92 in the previous trading session and opened today at $23.18. The price of the stock ranged between a low of $23.04 and $23.67 respectively. The trading volume of 702,941 is below the 90 day average volume of 1,193,300 shares. PAAS is trading below the 50 day moving average. The stock's 52 week low is $18.11 and 52 week high is $28.41.”

Letʼs watch PAAS. As it shows upward trend near $25.00 this is an excellent buy as a stock or a long term call option.

Now to clear your mind of the sadness of our world, the news bites of false facts, here are some REAL ones to help us understand our transition as a human race.

*BP contributed 77,051 to Barack Obama through 2004­-2009.
*The average American paid 17% of their personal income in taxes last year, the lowest since 1971.
*There were 116,782 immigrants deported during Emperor Bush’s first year in office; Obama the communist has only deported 387,790 immigrants.
*Five finance firms hold 97% of the cash derivatives on the market.
*49 states have laws making certain physical appearances legal to have companies not hire the individual. It is said that Pee Party members are scrambling to find this in the Constitution.
*17% of all Catholics believe in the “evil eye”
*There are 23 nuclear reactors being built in China
*IN 2009 52% of U.S. personal income came from wages, and 17% came from horrifying socialistic government programs. Since 1929 these figures have never been so low and high. So, I’m asking all Pee Party folks holding their Constitution in hand, pray to their God (Christian only, I think, allowed in Pee Party, as in constitution, and voluntarily offer to give up their federal programs to “do the right thing”. Simply denounce your public library, public schools, social security, Medicare, and all else that we have wrought.

Be Well and Do Good
Trade for the right reasons
Floyd

Floyd, the Trader

In our ongoing portfolio commentary, beginning with last Monday’s alert, we’ll first finish up on the holdings, charts and spreadsheets all updated on the website.

Principal Financial Group (PFG)
We think one of the best run of the insurance giants, a quiet giant.
Buy. 25% trailing stop loss.

MTN Group Ltd (MTNOY)
For fun feel free to do your own due diligence on this newly recommended international telecommunications trade.
Buy, using a 25% trailing stop loss

Oracle (ORCL)

This is a long-term speculative trade; we think is the best positioned in the tech field,
as the sector shifts . Long term we believe we have the right stock.
Buy. 25% trailing stop loss

Johnson and Johnson (JNJ)

As soon as we bought in all the news was announced on bad product, packaging, and the brand name of all time became tarnished. We saw the initial recommendation decline 11%, and as we had said “buy, buy, buy”, we bought again at lows and will continue to. A strong dividend and brand name that will overcome this quickly, and bounce back.
Long term speculative hold, using a 25% trailing stop loss.

Panera Bread (PNRA)

When we sold slimy YUM Brands recently for 60% plus profits, and knowing we already held the slime of slime, McDonalds, Panera Bread charts as a break out stock, and is a superbly run restaurant chain.
Buy as a speculative position, using a 25% trailing stop loss

National Fuel Group (NFG)

This is also a new long-term speculative purchase. It’s another method of distribution of core commodities, and worth your review.
Buy. Accumulate. 25% trailing stop loss, in a speculative portfolio.

Monsanto (MON)

The next sector growth play we think is in “soft commodities”, which in the agricultural world means chemicals, pesticides, potash, and shit.

Monsanto has hit a real bottom, with its patent rights gone on its moneymaker pesticide this year, but sells many things, and performs many services.
We bought MON and have continued to recommend within decline, and are now about 3% off .
Accumulate. 25% trailing stop loss


Our recent recommendation on a call on Mosaic MOS SEP 18 2010 45.00 CALL
were spot on. Investors required the second larger buy on this position but hit 34% profits over a week ago.
As we recommend options, remember-SELL at your risk level. For some a 34% return is superb, and for others, they will hold closer to expiry and follow the charts.


The only other sector not covered in our portfolio takes a unique conversation.

We have owned, and do own TIP, the government inflation bond, and we have played TLT calls regularly reaping 35% returns in days with no losses.

Both TLT and TIP remain sound investments long term, to just hold and buy, and short term, to trade on the momentum as these currencies shift with and against the EURO and GLD and SLV


We remain active in review of AIG and TOY. We would like to buy QABA below $20.00My comments will be in bold black, and are to lead you to more questions and answers.



The first step in trading is the identification of personality type, your core “character logy”.


The next step is to let your subconscious just open a bit to your conscious, by taking honesty in, and not “I want or “make up” stories to yourself about whom you are.





From Charles Nenner Research, the Netherlands stock prophet that used to analyze for Goldman . He spoke on CNBC last Wednesday.
*************************************************************************************************

“The Blue cycle line that signaled the prior highs and lows is topping again
This is the reason that we exited long positions when the S&P reached 1200
The very long Red cycle that bottomed in 1990 is now turning down
It bottoms only around the year 2025
This is the reason that we expect a continuation of the overall bear market for many years, with several up moves along the way”



We must recognize that Nenner uses algorithms and cycles to foresee the market and is probably best predicting what we already know. We’re phucked.


Here's what the stock chartists tell us about the massive drop:


-- STOCKS MOVE SHARPLY LOWER TO AFFIRM RESISTANCE ZONES
-- BREADTH INDICATORS REMAIN BEARISH OVERALL
-- RISING EURO WEIGHS ON GOLD

-- GOLD BREAKS WEDGE SUPPORT

-- VOLATILITY INDICES TEST IMPORTANT SUPPORT ZONES

-- ELLIOTT WAVE COUNT SHOWS THE S&P 500 IN WAVE 4

 AN ALTERNATIVE ABC CORRECTION AND SUMMER RALLY


At Blue Chip Options we are not considering 25 year periods, but do recognize and believe there will be far fewer “stocks” to invest in that “win”, and that the market will take years to sort itself out of what it did, and what those behind it continue to do.


At Blue Chip Options I've been recommending watching Gold and Silver for months, and we sold our position at 1170. We've just re-entered with Gold and Silver and will watch this. We may have entered too early and that we have more downside to surprise us.

We believe we will have an alternative ABC correction and a summer rally. Our bullishness is short term, but truly there. We see more upside before downside short-term, and more downside than upside long term (6 months).

Friday was indeed a feeding frenzy of downside, lightened by Apple hitting the stages at 1 pm. and telling the world that only 165,000 have complained out of 3 million sold, that all smart phones do this, and that we have created frenzy.

People want Apple to fail, because Apple is successful. People always want to find fault with success.
I own this product and watched with amazement at what a feeding frenzy it has become, when almost every Smartphone has the same problem, and suddenly this is “news”. Lobbyists played Apple, or the human psyche did…..upset that a company could seemingly do “no wrong”.
We’re bullish on Apple and own AAPL OCT 16 2010 290.00 CALL.

We are also bullish on the right Blue Chips, which are bargain priced.

Accumulate IBM, ORACLE, MON, MOS, and any blue chip that is bargain priced.

We will close our weekly commentary with two new recommendations.

1. -BP101016C36
BP OCT 16 2010 36.00 CALL
Buy at up to market. Best buy at 4.85 or less.
Hold and accumulate on any large market dips.
Use a stop loss of $31.00 and sell to 49.00

This is only for high-risk traders

2. Buy Google. (GOOG) Complete our vision. We own ORCL, AAPL, AMZN (both in calls) and think that Google has not lost a bit of its focus, just a bit of attention has softened its profile.
Barron’s this week surprised me with this being their primary recommendation. They are in good company with old Floyd, who recommends it as a core holding using a 25% trailing stop loss.
Buy at market and accumulate.

We will watch for a call on GOOG in the near future.

Here’s partly why. Viral marketing is our future, and GOOG will lead in the producer of the product, AAPL in the display, and ORCL in being ORCL

Here’s the first genius viral marketing:



http://blog.entrepreneur.com/2010/07/lessons-from-the-old-spice-man.ph



Do no harm. Question authority. Question all facts. Do not trust people that want to force their beliefs on you. Be Well.

Floyd, the Trader

The most important piece of the jigsaw of a rising economy is not bullshit like "buy less from China", or "the government caused this and now we're becoming socialists".

Idiots think this. (Sorry if you are one). But, it’s time to get REAL, as we watch stock market take away any profits, give them back, and resolutions being “stuck and lobbied”

A large part of the jigsaw is that consumers owe $14 trillion. This is all Obama's fault, like everything else. He and those Democrats (not a single Republican) are not focusing on JOBS that will allow people to spend.

Here's the facts:

1. There is $14 TRILLION in household debt, and $10.5 TRILLION of that mortgage related, thanks to Bubbles Greenspan.

2. Americans have now decided being upside down that is okay to PHUCK your bank. We predict more and more will just walk away from their mortgages as their homes lose more value.
Reduced spending may occur with this, as will rising delinquencies on credit cards and mortgage accounts.

3. A Floydian Fact of real merit: There is an astonishing decline in bank deposits, clear evidence we as a public are starting to burn through the cash.

4. Stephanie Pomboy, Market Maven, says there is almost a zero chance of our ratio of debt returning to 65%, what it was before Bubbles Greenspan came to head the FEDS, and we all believed him GOD, because the money was free. She analyzes that to decline our debt by 6.3 trillion, or increase income by 9 trillion would bring us to this 65% reasonable and healthy rate, would take up to 10 years to occur, and has a ZERO chance of occurring because 40% of our households now spend every dollar they make just to keep their heads above water.


Last week we updated our portfolio on the website and made a number of recommendations for sales of positions. We are continuing to do so, and to do our mid-year “MRI” of our holdings. It’s been an exceptional year and a half for Blue Chip Options.

We’ll begin in the Monday commentary with our analysis of our holdings, and continue through the week, so that all of our holdings are covered by weekend.

Please Make Note: People invest for different reasons, and at different times in their lives. Planners call this allocation. Traders call it sector changing. Money magazines explain to the average Joe investor that it is good to have holdings in a variety of positions, and of course, never to have all your money in your company stock, as they are likely going to phuck you.

We pick both stocks that we buy and hold (and buy more on downturns) that ALL pay dividends. These are our CORE positions.

Our SPECULATIVE positions we may hold days to months, and with some over a year. We consider these potential break out positions, or trade them as options.

We will utilize our discussions about holdings in the order they list in our portfolio on the website.

Also make note that on our website we have a direct link to our up to date point and figure charting for all positions, and also positions we “watch”.


Chevron (CVX)
We bought this well and continue to hold. Nice dividend and the oil industry will rebound. Chevron has much risk inherent in lawsuits, and is aggressive in their exploratory methodology.
Hold, and use a 25% trailing stop loss

EXXON Mobil (XOM)
This is our largest single CORE position right now. We believe XOM is undervalued to the market, is being aggressively shorted, and will surprise everyone. It’s simply CHEAP under $60.00, we’re already up 17%, it pays a dividend, and Floyd believes it’s a potential $90.00 stock.

If trading options, trade ATM or ITM long -range calls. If buying the stock, use our traditional 25% trailing stop loss.

Health Management Services (HMSY)

We also read this speculative trade right, up over 44%. As healthcare changes (you know, we become communists) we will first have to figure out how we have created a “clusterphuck” of paperwork in the medical industry that RAISES cost. HMSY is an organizer company, managing and improving systems.
It’s well run, and has more upside.
We’d take 1/3 profit at 55% area. 25% trailing stop loss. Hold the position; do not buy at this time.

ITC Holdings (ITC)
Is an incredible concept -http://www.itctransco.com/
We bought and are up only 20%, because the stock is not yet known, and their concept of modernization of grid just beginning to be understood. It’s speculative, but a great move.

McDonalds (MCD)
1. Horrible food, builds obesity
2. Ugly buildings
3. Hideous customer service
4. Terrible dangerous little toys for children
5. The best system of “average” in the world. The food tastes like the same crap anywhere in the world, except for the French fries which they put drugs in
6. Execution business A+ BAR NONE.
We’re up 30%, it pays a dividend, and we’ll buy McD on any downturns. It’s a great “bad company”

Analy Capital Management REIT (NLY)

At one time last year we had a 120% return on this position and many took their first 1/3 of profits. The position is now up over 85%
Keep a 25% trailing stop loss, and HOLD

YUM Brands, Inc (YUM)
Pizza Hut, KFC, Taco Bell, etc.
And here’s McDonalds again, with a few changes:

1. Horrible food, builds obesity
2. Ugly buildings
3. Hideous customer service
4. Terrible dangerous little toys for children
5. The best system of “average” in the world. The food tastes like the same crap anywhere in the world, and it appears Asians are fried Chicken addicts
6. Execution business A+ BAR NONE.
We list this having just sold it for between 47 and 68% profits, plus dividends, but will be entering it again soon.

Wal-Mart (WMT)

Sadly this is another stock I love to hate. It’s a large box at the end of
a town that destroys local businesses, imports everything from China, and sells volume.
This company is the great logistics distribution company in the world. It has more money than we can imagine and executes.
A steady dividend, we hold this in our CORE account as a steady investment , using our standard 25% trailing stop loss.
Entry with WMT is fine anytime, and continue to buy.

Berkshire Hathaway B Shares (BRKB)

We know the story. The greatest investor in the world. We’ve shown returns of 50% in the old days, but did not add to the position during the downturn.
Many of our traders are sitting on hefty profits, having held the position with us over 5 years.
For the first time in BRKB charting history I am noticing a struggle at selling, and a more noticeable potential resistance area.
BRKB may be ripe for a drop. If you are profit oriented short term within your CORE account, we suggest selling 1/3 to 2/3 of your holdings if your returns are greater than 30%, as most of our traders are.

Templeton Emerging Market Fund (EMF)

We have owned this fund forever, and will hold it as long as Mark Mobius, the famed international trader, runs it. As a student of Sir John Templeton Mobius has allowed us returns as high as 200%, and currently over 150%.
We use a strict 25% trailing stop loss on EMF as emerging markets are volatile and unsteady. When many trading services recommend a variety of stocks and “plays” on China we sit back by the pool and let Mr. Mobius do our work.
Always a good buy on any dip. We list in our spreadsheet no trailing stop, for those that are risk oriented and simply accumulate on volatility.

Bristol Myers (BMY)

Blue Chip owns two pharmaceuticals and we’re in for the long term.
Hold, and use a 25% trailing stop.
BMY is sound, and has break out potential

NetFlix (NFLX)

Daughter Jenn who is learning the business and writes much of our final work recommended this on a simple “Dad, they have it together. None of the other ones do”. She’s been right. It’s up 60% and we’ve made money several times on calls.
We just recommended to sell a 1/3 of this position to lock in some profits.


JM Smuckers (SJM)

A kick ass “family company” that makes great profits and advertises perfectly.
We recommend this position be held if already accumulated, or purchased if not owned. Accumulate as a CORE position that has a dividend.
SJM actually looks like it has a healthy upside potential.


Caterpillar (CAT)
CAT is like a drama in the volatility that occurred during our ownership.
We’ve continued to add on dips and stand now with a 93% average gain.
Accumulate this position on any dips to a Point and Figure support line.
If you have great profits, take 1/3.
This is a long term CORE position charged for the” building of economies”



Each day this week we’ll outline in detail the rest of our portfolio.
Again, go online and see our charts on these holdings.


Be Well and Do Good

Floyd at Blue Chip Options