ARG, looks pretty good to me, broke through some pretty strong support today, with enough volume. Earnings May 2.

Jodi
Canuck

Jodi,
ARG looks great if it holds its gains and picks up the volume a bit. I want the Flames to win... but they're having a tuff time with Detroit.

JK... you'll have to thank me for MLM. I bailed on it two days ago as it had broken my ascending support line (even though it was right on the horizontal supp around $132.) This triggered the inevitable "C&C are out" rally.

I have watched my (fairly hefty) profits shrivel up this afternoon. We're still up nicely, but we're at about half of what we had this morning. We'll keep our fingers crossed for a late day rally.

Brett, I love OO's product, but never would have thought of holding them over earnings. Same with RHI. Sometimes it pays, sometimes not.

Chris and Catherine

Any bear trades out there? Feel I need to diverify further on the down side for next week.

Held RHI over earnings and have been rewarded. Was prepared to lose entire postion if went wrong way.

NTAP continues to work downward also.

Rd

JCI had a killer earnings with increased guidance. It was down earlier in the day after gapping up - wish I had bought then...although I did want to wait a couple days for IV to settle back down. Look for a pullback, maybe.

Gary
Boston

Jeff, care to comment on ICE? The chart looks good but I just don't know enough about these exchanges and the dynamics right now with all of the buy out discussions and things.

Gary

Gary,

Hopped off the ICE train over a month ago. Nothing there to trade really (in my opinion).

Putskini: All looking to buck the current trend and diversify for insurance… DSL resistance bounce from $68-68.50. Target: $62ish.

Volume on up days is more than down days, definitely not ideal. The latest up volume was caused by earnings release. Although off last year’s numbers, still up.

Good risk/reward from a price movement standpoint since the resistance is solid.

What say you all?

John

Does BIDU meet its upside fate today since it has hit $100 a couple of times intraday and really WANTS to bounce off of resistance? Or is it me that WANTS it to bounce?

Gary,
We held ICE for a while back in the fall and did very well on it. Once it gets going, it tends to hold it's trend nicely. I'm watching it very closely as it's hung in at that support level of $125 to $130 for quite a while and is now moving off of it. If I see a continued move in that direction I'm jumping in with some long options. Maybe 3 months out... or more, as you can make an killing off this guy, and you lose virtually no time element before the month of expirey (expiry?)

Love JCI, by the way. But I'll wait to make sure this isn't an earnings induced fake-out (unlike some head-ache induced fakeouts I've heard about.)

I'm convinced NTAP is a confirmed put prospect. Bought in three or four days ago and it's doing exactly what I'd hoped. There's a chance that it'll hit some mild resistance right here at $34-$35 but I don't think it'll end up being support.

Boy there have been some big pull-backs today but HWCC looks really good to me. Think I might pick me some up right now. Although.... I sure would like to find some strong put prospects to shore up the dike, just in case.

Chris and Catherine

PS John,
Don't like the look of DSL as it's broken both it's diagonal support line and up above $67.50 which has been fairly strong support/resistance for a long, long time. To me, it looks more like earnings may have reversed the trend. I'd watch for it to fall below $67.00 on strong volume before I'd consider it.

C&C

Do June options come out on Monday?

I posted the following at the end of the last thread before I saw that a new thread had started so here it is again:

HI, I'm in need of some insight. I recently attended Mike Coval's AO class and he threw out the idea of selling an OTM call on the SPX at the close of trading the Thurs night before expiration. The idea is to collect a small premium for an overnight trade. Once the SPX settlement prices are released, Fri morning, the trade is complete. I did this successfully last month and collected .50. I repeated the trade this month and got clobbered. I recently learned that the settlement prices for indexes such as the SPX are an accumulation of the opening prices of the stocks contained in that index and NOT on the opening price of the index itself. (or something to that effect)

Here is the bottom line. The SPX closed yesterday at 1470.73. Before the market closed yesterday I sold the 1480 call and wisely (I think) covered with the 1485 for a .30 credit. The settlement price for the SPX came in at 1485.57 (nearly 15$ higher than the close yesterday). As far as I can tell so far the index itself hasn't even traded that high today. Does anyone know if this is a common occurance? I really felt like the trade I put on had a very high probability of success. There was almost 10 points between the current price action and the strike I sold. Needless to say, I'm a little discouraged. I knew going in that the r/r wasn't great but in my eyes the probability of the trade being successful WAS.

Any thoughts?

Cinda (sobbing in Santa Rosa) Just kidding ;)

FFIV
I believe this could be a good bearish play as it bounced up to it's diagonal support on a Buy rating and has struggled to hold that level since, on average volume. I see it continuing it's downward slide as the news of it's Buy rating fades into the sunset. Earnings is April 25th though so tread lightly... and carry that big ol' stick.

Chris and Catherine

C&C...

Spent my moment of silence with you in the same frame of mind as a had "one expire"...as they say, "A first for everything". Learned on that one...

CMG is getting a bit of attention today (hate when they are down on great up days like today), but forming good support at 65ish...looking for a good bull flag formation to play out...any other thoughts?

Travis

Chris,

Who said i held over earnings? I got in to OO on a slight pullback today at $24.50.

Also, here's a GREAT bearish idea:

IBM looks like a long flag/wedge pattern broken 2 days ago with a nice re-entry today. I love the risk reward here.

Thoughts?

Thanks C’s!

On a one year a line chart for DSL, both $67.50ish and $68.50ish are fairly equal for S/R bounces. Apparently, I was only seeing the one that I wanted to see. I will use caution.

John

John,

That higher volume on up days for DSL this week was because there are buyout rumors. Heard a few times from different people on CNBC that DSL is a nice target. I had been watching this one to get in on bounce off resistance, but it went the other way.

Lois

Brett,
I like IBM... Just about every combination of analysis tells me this one will keep moving down. Diagonal support, just bumped below it's moving average as it's sliding below support at $95. The options are very inexpensive, too. I'm going to pull the trigger on this one, but won't cut it much slack if it heads up, or sideways for too long.

Chris and Catherine

Thank you Lois!

I will stay away from anything with buyout rumors. I almost pulled the trigger on a put on SLM a week before the buyout...

Thank you!

Chris,

relax, buddy. i just had a burrito. we're fine.

I am just sitting down today to analyze the market. Wow! 13,000 is just a breath away. I have been away all morning and feel a little behind. The market has moved so much that I am now playing catch up. My 3 year son needed to go to the hospital this morning. He is fine now, but it is actually quite a story involving a slipper slide, shovel and an enoromous amount of blood. Could this be one of those days that I can't concentrate on the market? Anyway, I am staying away from taking any trades...I don't think my head is in it.
The communcation between you all is awesome, and I feel like I am really missing some good moves today.
Keep up the good work, and I promise to contribute next week...maybe even make some money
Amy...aka "Mommy"

Guys,

I see another one today. Another flag break inside a cup and handle. Only this time, the stock's target puts it at $93, a hair away from the century mark, and this has really been a great stock. Volume will likely only be average today, but I'm in nonetheless. Earnings are 3 weeks away, but plan to hold through them. The stock is (ding ding ding):

ANF.

Be gentle with it.

Brett, I agree with IBM. But there is a lot of support at 94. Me..I'd have to wait till it trades below todays low at 93.91.
The Dow is up...15 of 16 days. On a pullback I think IBM has the potential to be the first to go.

Do you ever look a the the COT report (commitment of traders).
Commercial Hedgers are net Long. They very rarely are net long. This usually indicates an uptrend lasting several months...for what it's worth

Jamie

Amy,
We have all been there. The chillens are way more important than the trading. Blood always gets our attention, doesn't it? It's awfully hard to keep up with this blog on a busy day, too. But you're right there's been some good stuff on here today. Thanks to everyone!!!

Brett: Thank the burrito gods!!! I will put my wellbeing in their capable hands. As for ANF... I hate them and all their descendants. Their stuff is overpriced and shoddily put together (Catherine's a seamstress as well as about 10 other things) and both my girls love it and want it so, so, so, so badly. A pox on them all!! Good luck with it, I'm going to give it a pass unless the volume picks up substantially. I think it's stuck in this mid 80s range (just like some of us Boomers) although it may just be wishful thinking on my part.

Have a great weekend everyone. A great finish to an OK week for us. I wish we were up more than we are, considering what the market's done these past few weeks. But it's way better than a poke in the eye with a sharp stick, I always say.

See you all next week.

Chris and Catherine

Chris,

Overpriced, made cheaply and your girls can't get enough of it. Sounds really bad for the business, doesn't it? I think it's a great trade. Have a great weekend everyone.

Somehow the market went up almost every day but i had my first losing week in the last 6. Strange.

Cinda, I have not taken Advanced Options with Investools, but from the knowledge I do have on Advanced Option strategies (which is very limited), the only conclusion I have come to is that there is no free lunch. It's all a game of risk/reward and its relationship to probability of success.

I don't know why the index closed where it did today, but I do know that the trade you took yesterday had a nearly 16:1 risk to reward ratio. And that equates to a 94% probability of success. So, it should work like a charm 15 out of 16 times and you'll get your premium. But the time it doesn't work (which seemed to be today), you'll lose 16 times more than you stood to gain.

Plus, you have no way to cut the loss since you are right on expiration and gamma is out the roof when you're at the money. You can't set a stop loss so it's all or nothing.

I don't claim to be an expert, but that's my take on the strategy. Like I said, I haven't taken the class and maybe there's more to it that I'm missing. Regardless, I'm very sorry to hear that happened.

Tim, thanks for your post. Sounds like you have a good grasp on this stuff. I've been with Investools not quite a year and a half and it seems like I should be progressing further and faster than I have. I take this education very seriously because this is how I'm going to make a living for the rest of my life. I spend hours on the toolbox, reading the articles, listening to trading rooms, attending live events all across the country, etc. About 5 months into the program I even cut my hours back at work by 10 per week so that I could use the additional time to learn how to trade. Academically, I feel like I know this stuff. I would be an A student for sure! So, how is it, when looking at the market last year and even so far this year, I have managed to LOSE money!? I just don't get it. I keep trying to view these losses as part of the cost of tuition, or as information that I paid to receive, but I'm having a hard time figuring out what lesson I'm supposed to be learning here.

Anyhow, thanks for letting me vent. Sorry for the negativity but I just had to get it off my chest. Could be worse, after all I am still in the game and I will get there, it's just not happening as quickly as I had planned. I guess it's hard to set realistic goals for myself when my only frame of reference is someone else's experience... know what I mean?

Ok, now I really am done rambling :)

Cinda (Santa Rosa, Ca)

I am surprised nobody is mentioning CAL, it got so much attention just a couple weeks ago. I bought some out of the money Puts 5 days before earnings, an all or nothing trade, looking like a lot! If its counter part, AMR, gets a little bounce, some PUTs/short it as close to 30 will surely pay off.

Need help from someone who has done this before:

I have never made money trading and always just turned in my year end broker report to my CPA. Also never traded options, only traded stock.
CPA(not a ticker symbol) thinks he needs a detailed statement of EVERY trade to turn into IRS(also not a ticker symbol).
EXAMPLE: If I traded Apple and made 10,000 for the whole year, I want to just give him the brokers P&L showing this. HE wants all 50 million trades with entry and exit prices that account for the end result.
ALSO-- I have someone telling me that there is a difference between reporting stock trades as oppose to options trades...???

Not looking for tax advice.... just wondering what others HAVE TO provide.

signed,
struggling with educating myself and my CPA.

SPX spreads

The spx options close with the set price on friday. This is I believe the open price that morning for the 500 stocks. It can easily move 10 or more points overnite. Most of the people I know doing spx spreads will close a position if the index is within 10 points on Thursday.

Preston

Cinda, I would guess that most everyone here is either currently experiencing or has experienced the same frustrations you are, so you are in good company. I have only been at this almost four months now, but there's one thing I learned quickly early on. That is that emotion, for me, is the determining factor between making money and losing money.

So I decided that even if I learned everything there was to learn about trading, the hardest thing for me to learn was going to be dealing with emotion, because emotion was making me get into and out of trades at the wrong time. I needed to train myself to deal with emotion.

So I backed down the amount I was willing to risk on any trade to a very small amount. I picked an amount that I felt comfortable losing but is just on the verge of where I am uncomfortable. This makes my positions very small, which in turn means I'm not making very much -- but I'm not losing much either. My plan is trade for a while with this minimal risk until I get used to seeing those small swings in my account, and then GRADUALLY increase the amount at risk in small increments.

This, plus I changed my goal for 2007. My goal is not to make money this year, but to learn to trade and to break even. I figure if I can do that, and gradually increase the amount at risk over time, I'll be set.

That's my approach. It's not exciting and it's not going to make me rich, at least this year. But I had to take the pressure off myself emotionally so I could learn to trade.

And, by the way, since I made the change, things are going much better.

Cinda,
Venting is good. That's one of the great aspects of this blog. Not only can you vent, but people respond. I agree with Tim. Emotion's a terrible thing when it comes to stocks. I've been trading stocks for a almost two years and the first year was up 80% on my IRS. I thought "Hey, this is easy." This past year I was up 1%. I chose to bail for about 7 months because I didn't like the market but still, since I've been spending so much time on options the stocks in my IRS have been getting lonely.

My option trading has been erratic at best. I think I'm getting the hang of things a bit more now... My entry points were killing me, I found as I would get excited about a stock just as it peaked, buy a call on it and watch it re-trace. Then, when I hit my stop... it bail on it and it would then turn around and head back up. Once again, emotion. Wait for the right entry point and you'll know within a day or two if you're going to have a successful trade. If not, you pull the plug and move on, with a very small loss. If it's a good one, you'll get a pretty good run-up before it retraces a bit.

Jeff has created a wonderful opertunity for us all to share ideas here, and I think you'll find the info very useful.

Chris and Catherine.

dbohnter,
I ran into the same thing. I only traded options in Nov and Dec last year and the detail report was 35 pages long! I tried to convince my CPA that the totals should do the trick, but she wanted the whole enchilada.

By the way, if you made 10,000 on AAPL last year I want to be your new best friend.

Brett, I agree on ANF. They should be the darling of the retail industry. I lost some money on them back in the fall, at a time when I thought Xmas sales would be driving the stock higher. They disappoint on all fronts. I guess this is one of the times I need to remove emotion from the equation.


Chris and Catherine

dbohntr,

Unfortunately the IRS has no sense of humor. Your broker sends the IRS a list with the gross (not the net) proceeds of every trade you made. If you don not match every one of them with a transaction showing the net of each trade, they will tax you for the gross amount.

Cinda,

You are correct. The SPX (and most of the other cash settled indexes) is settled based on the open price of each equity in the index.

If you look at the past, you will find other times that the SPX has a lot of movement between Thursday and Friday settlement. I always get out of SPX spreads before close on Thursday unless there is at least 20 points of movement left.

On a slightly different note, it is too hard to get good fills on the SPX. I have decided to stop trading it for spreads. RUT and NDX are much better.

Why don't you email Mike Coval (http://online.investools.com/support/contactInstructor.iedu) and ask him for more details on his SPX close idea. When he responds, please post it here. I would be interested in his answer.

WCG - Ascending Triangle. Maybe looks good for a breakout prior to earnings. Might be worth a quick trade.

Chuck from Orlando

Cinda,

To echo others on the blog, the SPX has settled 15 points or greater two times since 1998; however, the SPX is difficult to trade as a result of its open outcry system, meaning hard fills and floor manipulation.

If you would like, email me at gtcan@cox.net to get some some more info on the SPX, I have been trading it for just under two years

Good luck with your future trades!

Glenn

dbohntr,

You can probably download your trades into excel from your broker. This will be all the trades. The 1099 only reports stock trades to the IRS. The number the IRS is looking to match is the gross sales proceeds.

Take the spread sheet of stock trades only. This will have all your buys and sales. Total the sales and this should match the 1099. Total the buys and subtract the difference for your P&L. Label the sheet Appendix A.

The CPA can then on your return use Purchase date= "various", sale date="various". In security description put "see Appendix A". Then use the gross sales and buys from the spreadsheet for the P&L. Finally, attach the spreadsheet that is labeled Appendix A to your return.
THe IRS accepts this... I've done it for years that way.
One more thing, do the same thing for options trades separately. The option trades are not reported to the IRS by your broker...it is up to you to provide that info. Hope this helps.
Jamie

CRS asc triangle breakout. It is before earnings but this group has not disappointed the street
VLO confirming it's support bounce.
RTI breaking out to new highs.

Long: CRS,OSG,VLO,NUE,RTI,PCP,ICE
Short: maybe commons sense at this point

Jamie

Add BUCY to my list of longs. I had an asc triangle breakout. then a consolidation (flag 4/17-4/19 candles). Then another break higher. Flag break coincided with CAT positive earnings so I took the Trade.

I knew there might be an issue this morning with Skynnard..."ooh that smell" blairing in my ipod. Everything I see is saying long....."cant ya smell that smell"
Jamie

Addicts,

just sold my POT calls for a 262% profit in a couple of weeks. Now I'm on the hunt.

Here's what i like today so far:

AMR - bearish.
NUE - bullish.

You guys are great, I can't wait to post some great trade thoughts when they come along. Thanks
KAK

Congrats, Brett. That's awesome.

I have a success story too though the numbers aren't nearly as impressive. Today I sold my calls on PCAR for a 35% gain in about three weeks. The success about this trade is that this has been a lesson for me about learning to trade without hard stops and with more patience.

In the way I used to trade there were many points along the way here when I would have sold this for a loss because of emotion, but this time, I decided to hold. It never made a lower low. I knew I wanted to be out by earnings so I decided to hold until today. Friday and today it came back up to create a respectable, though not phenomenal, gain.

The discussions on this blog and trading with smaller positions have helped me turn the corner here. Though it's just one trade, I feel like the lesson learned here will make a big difference in my trading moving forward.

The only regret now is it looks like PCAR might continue to climb higher throughout the day. I decided to take the gains when it hit the previous high. Oh, well, have to work on that next time.

thanks everyone,
tim

Tim,

Once you make the decision to sell, don't worry about what the stock does. It's rare to pick the exact top.

check out NFG for a quick runup before earnings. Look at this one make flag after flag.

Anybody like the breakout on GVA. Very close to earnings... This is just one Jeff highlighted last week
Jamie

Wow, i didn't even notice this until today, but some of you (like me) have been in BTU for a couple weeks.

check out the intermediate-term triple bottom it just confirmed today!!!

Jeff, will you confirm this?

Speaking of coal,check out ACI. Looks ripe for some picking.

Sarah

homebuilder stocks are looking like a good bearish resistance bounce today. XHB is the index. LEN, KBH. Anyone have any others?

Deck is looking good hopefully it comes down before the end of the day for a good entry. The ascending triangle calls for a 10 point move.