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
Thursday, September 30, 2010
Thursday, September 23, 2010
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.
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.
Subscribe to:
Posts (Atom)