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
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*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
