Another Addition to the Photo Album

Check out this photo I got from Stephen aka "step_investments." I have circled him in the crowd, and also pointed out the weapon he was planning on using in case one of those bulls got too close for comfort (rolled up newspaper?). Stephen, it is comforting to know you have my back!

Recommendation: He called a breakout on VIP tomorrow, remember the source!

Long: VIP?

Short: Realty stocks if you missed the first opportunity (KIM)

Let's not forget Carmax KMX, also providing a 2nd entry today.


If $500 was your resistance on GOOG, then today was a clear breakout with tremendous volume.

Strat- where in Chicago are you? I grew up in Northbrook and have lived downtown and (right before I moved) Buffalo Grove. You near there?

Fellow Adicts,
Can anyone help me with how to set a profit target for a support bounce trade?


If you need a price target, use the stock. Average the moves it normally makes to come up with a short term price target.

Let it run until the trend breaks. once it bounces it should start a new trend, it will usually run with new highs and higher lows. The bounce point of action is your new support. There is no way to measure a target but once the stock breaks the new trend it will create higher highs and lower lows, usually it will consolidate as well for a new break. Take into account your time value in your option etc.

Did I help?

oops didn't see Jeff's response, he makes better sense of course.

Hello everyone.

Fellow PFCB traders, I'm still in after the close today. Man, this one is just likes to push me to the limit. My line was the previous high of 39.33 and it closes at 39.49, just 16 cents higher. I don't know, this is so close to call but the thing just looks weak to me. Any thoughts? I really like their Kung Pao Chicken (especially at Pei Wei) but I'm boycotting them for now.

I exited STX today. It had already reached my target of a lower low and has just been moving sideways outside of my short term trendline.

Took at stock trade on GVA today. Other than that, not many trades for me. Nothing looking terribly compelling for entries according to my rules, but lots of things I own doing nicely like SLB, GRP, RL, CCJ...

CHK made a great move. They are based here in OKC (they have an absolutely beautiful campus) and I want to own them, but couldn't get in because I couldn't make the R/R work.

Hey Tres M:
That is a nice dolphin you are holding (picture). In which grocery store did you buy it?

Just kidding, where do you fish out off

Great photo Stephen! This is the "Running of the Bulls" in Spain, is it not? I see you getting caught up in a real "bull market"!! I guess its still a good idea to run with them instead of buck the trend!!

I bought PCP today. Michelle still loves AAPL and CROX.


I caught that north of Cabo, but try to make it to Costa Rica at least once a year on the Pacific side, amazing marlin and sail fishing!!

How about you?

Thanks Jeff and David,

That does help. Some times it just takes a little reminder. By the way if there are any of you out there like me who was afraid to write in because of not wanting to look bad, I took Jeff's advise and just started posting any way. I think this is a great way to learn. Not only does it really force you to look closely at what you are doing but it allows others to learn also.
There is really nothing to lose and everything to gain. Thanks to Jeff for being so supportive and encouraging.


Brett and Addicts,

I need help playing the downside. My bullish positions are working beautifully, but everytime (and I do mean every time in the past few weeks) I touch a put, it goes against me in a big way. Luckily I am using stops, and the stops have saved me from losing more money as once they went against me, they kept going.

Initially, I had too many bearish plays, so I now have a rule that says no more than 30% delta can be counter to the current trend. In addition, I decided to look for put's only in downtrending industry groups which are SemiConductors, Airlines, and Retail. I found BLG, and bought a put on it this morning. I set a stop based on ta 15.90 stock price, and I got triggered today for a 30% loss for the position(still within the 5% risk I allow on my account).

Any thoughts on playing the downside more effectively in a bull market?

Hi fellow traders,

Tim - PFCB - my crystal ball(charts)is still telling me that PFCB (in all time frames) has more probability of going downtrend. In addition, my crystal ball warns me that as long as the market is bullish, PFCB will make lower highs very slowly. Also it flashes a very vague number 30 with a very large black bear at the background. mm......what could that mean?

Bill T (your fortune teller)


I know this comment wasn't addressed to me, but I will chime in anyways...

Why do you feel you need to buy puts in a bull market? If you are not finding anything going down, take that money and buy things that are going up! The most effective way to play the bearish side of a bullish market is to FIND the bearish side of a bull market.

The market isn't bearish, but there might be bearish components to it. I have called out a few, but there are not very many, which makes this a complicated feat.

I teach that it is acceptible to buy puts in a bull market is a form of diversification, but many others will teach against it. It is counter trend! Think of all the money you could be making playing the upside. What difference will it make so long as you manage your risk and you are making money?

I said it earlier, but I will reiterate, the only way to play bearish in a bull market is to find something that is going down. If you cant do that, you wont make any money doing this.

Sorry to butt in,


Brett -

I'm in Downers Grove currently. Over the years have lived in Tinley Park and Chicago (North side & Water tower & Halsted area.)

Still love to get into the City whenever possible...

Took a position in VIP today, looking for $105 before the end of the week (as stated previously in this blog) once the bulls come rushing in.


Jeff, (and Eric)

Thanks for your PUT comment ... I've been reading where several here are buying PUTS .. and I understand the diversification issues - big time. However, if 'the trend is your friend' and there are so many wonderful uptrends right now, I have NO puts at the moment. I have had some and have made minimal returns (airlines/real estate sectors)or had small losses.

This is a wonderful spot for a lot of money on the uptrends folks. Sure seems like we should be diving in on those. I too can't find many PUTS in this market.

Just my $.02 ....

Haven't been posting as much .. but reading daily ... You guys are phenomenal .. and all of those posts on Saturday and Sunday ... Man ... we do have addicts on here!

THANKS for all of your help ... addict community... We're blessed to have this thing to 'walk with!'

Personally I am putless right now...

And yes, Tonya, all girls welcome. Bring your own weapon, LOL....

I guess after running with the bulls trading is pretty mild. Jeff, thanks for the put comments as I have been trying to have "balance" with some puts in my account and they just have pulled all the profits out of the account for the last several weeks. I came to the same conclusion today and now we are putless like Bob R.

I make this comment assuming that you know the risk involved in taking all bullish trades, right?

If the market pulls back, and you are all in on the bullish side, you'll feel it across a bigger percentage of your account. Like I said in the post eariler, if you decide to do this manage your risk. Know that the market will pull bakc, and know what you will do in defense.

_______________________ AAAHHHAAA!!!________________

Ladd, if you're listening Catherine wants to hug you. I, on the other hand, will settle for a firm handshake. Your comment on PCP got me thinking. I had a look at my $100 June call I had on it (after I'd sold it, of course) and saw that you're exactly right!! That puppy was so far in the money that there's a total of $0.20 time value left in an $18 option (that cost me $5.00 a month ago.) What an idiot I am!!! I had never noticed that as the option gets deeper and deeper in the money, the time value becomes smaller and smaller.


I am now all-knowing. Catherine will have to retire the bag of hammers (after this one last time) and find a new speed bump for her driving.

Eric, I tend to keep 3 or 4 Puts in play after getting third degree burns on 02/27. Have a look at LCC as it confirmed it's downward trend today. I've made quite a bit of money of this one and it looks like it's good for another bounce. Also KMX seems to have a good look to it but my spidey senses are tingling on it. Don't know why, but I just don't like the setup. I will analyse it, digest it, and barf something unuseable up later.

Missed all the action today as I was airborne. My 401k is on fire this past week while my otions are doing just fine. Nothing worth selling (except the PCP calls with NO TIME VALUE!!!(moron))

Trying to catch up on all the chat. I'm in the air tomorrow. Now excuse me, I must go watch the Senators beat up on the wimpy Ducks. This may involve a Corona or two (not being privy to Yeunling's finest out here in Alberta.)

I have to say something in defense of the Put trades in a bull market. I have had several bearish positions for the past few weeks and they have all been profitable, though some more than others.

While put plays may be counter-trend in a bullish market, within the context of the individual issues, they are in line with the trend. In other words, downtrending stocks at their resistance (usually with awful fundamentals).

That said, I think the key to trading puts in a bullish market is to not stay too long at the fair. Get in right, ride the big part of the move and get out. Let your winners run works on bullish stocks in a bullish market but a rising tide lifts all boats, even sinking ones.

Ahhhh Doji Girl... you speak truths, and show wisdom beyond your years. As I have said many times (OK... a couple of times) we work with a market of stocks. There are plenty of stoks that have been in a horrible slide while this market is on a tear. LCC and UAUA are two perfct examples. I wish I'd notice UAUA on Thursday. A perfect bounce. Same with LCC. You CAN find some great puts in this market and I am always going to make sure I have some contrarian irons in the fire, no matter which way the markets going. But as Doji-san says... research them well, get in, make money and get out, because the market can overcome a stock's desire to fall (much like a hailstone... if left on it's own, it'll fall like a rock, but give it a strong enough updraft (ie thnderstorm) and it'll soar like an eagle.) The trick is to find a hailstone the size of Gibralter.

I have a few short positions (5) and 10 long.
My shorts are: BBOX, INFY, JEF, KMX, ZUMZ. Take a look and hammer me if you would like.

I went OTM, small position. risking the whole enchilada.


I am confused, in an e-mail to me, you indicate that diversification is important and that you buy puts in a proportion you feel comfortable with. That said, I understand (slightly) your point, about buying good puts.

Many of the puts I found that went against me are from the blog, and your lists. However, I only take the ones I feel are ready to go (like PFCB), on the other hand, I got stung with 5 bad puts in the past 2 weeks, so I added a rule that indicated they must be in a poor industry group also (to help with the downward pressure). Then I found BLG, and entered, and got stopped out the same day.

I am begining to agree with your point that in a strong bull market, I should be in ALL bull positions, and use tight stops to protect against the downside. I am fairly confident I can make more money (and not lose 1000's) by avoiding the countertrend plays. It seems to me I should make more than I lose in the long run.

Any clarification about "good puts" would be appreciated.

Thank you,

Jeff, I do get that (THANKS) and Doji-san (nice ring to that) you gave me an AAAHHHAAA, like Chris, as I went over every trade for the year this weekend and you are RIGHT. I did not get out fast enough on my PUTS. Feb 27 was not as bad as a third degree burn (believe me I know, that is another story) but still really painful. Hey, Pam just brought me her evaluation of LCC! Looks like tomorrow we may be back in the PUT action after all.
Chris I am learning with you as I have a JUN Call on CRS with $0.55 time value last I looked. I was going to sell this week but think I could probably get a rise more than $0.55 this week so the time could go to zero. Am I thinking right here?

hi all.....regarding puts...i only trade bullish put my r & r..(research and 'rithmatic)...and consistantly do well...tuck

Tres M
I fish out of South Fl. I did the Costa Rica fishing many years ago and it was great. Costa Rica is beautiful. I found better fishing out of Guatemala, although the country is very poor and dicey sometimes. My next trip will be Cabo, as I hear it is beautiful. South Florida offers great sailfish,kings,dolphin and tarpon. But I will be in Cocoa Beach, Florida this summer, there you can catch tuna but you have to go out 40 to 50 miles. Friday there will be a night shuttle launch and those are amazing if anyone is in the area send me an email, you can watch it from the beach and those are once in a lifetime events to see, that thing takes off it lights the whole sky.

Bob (and Pam)
Crs... I like it. Stick with it until it peaks. Looks to me like that could occur very close to expiry date. No question in my mind that you'll get lots more than $$0.55 out of it.

As far as LCC and UAUA go, I see that oil is up over $66 today. If it keeps going up, the airlines (aka: my employer) will take a beating. I'm betting oil keeps going up. LCC or UALA are buys right now.

Hey Bob (and Pam) welcome back. Nice to you have you back aboard.


You bet I think it is important. Thats why I practice it. But if YOU are losing money doing it, then why keep doing it? You said you are making money on the bull side, so why not keep making money on the bull side? Diversification is one thing, but sounds like it is at quite a cost for you. It's not worth losing money.

I also appreciate you pointing out that "many of the puts that went against me are from the blog." Take ownership for your trades or find your own ideas.



What gives with the slam?? I don't think that was called for. As I mentioned in my post, I do sort through the trades, and pick the ones I think are best. No one is blaming anyone, it's my money, and my decisions. I am NOT looking for a scapegoat, I am only asking for help. If you re-read my posts, you will see that my questions are sincere, and I am hoping others can benefit from this.

If that is not the intent of this forum than perhaps its time for me to move on.



I read the post several times before replying, and just re-read it a few times to see if I missed something. I still read something that said...

"Many of the puts I found that went against me are from the blog, and your lists."

That sounded personal. I realize you ultimately pull the trigger, but I don't leave much work to be done after I analyze each trade I discuss. It just sounded personal. If that wasn't the intent, great. Let's move on.

How about I start an individual post on this topic tomorrow?

Jeff et al,

Even in a strongly trending market like this one do you keep a certain portion of your total portfolio in cash? to protect against days like 2/27 especially if you don't have bearish trades going to diversify your portfolio? The reason I ask is that there seem to be so many great setups and it is tempting to take quite a few of them, but like you had pointed out we will have pullbacks and no one can really tell how deep those may be.
I am just looking for general guidelines. Thanks


Jeff, as we are getting back into PUTs tommorrow (that is the plan) this post topic would be great for me. I too have used some of the ideas here and sometimes like today we just come up with the same stuff. I found that most of my PUTs would have been successful if I had not stayed with them so long. I know you probably ALL do this but reviewing all my trades in great detail and seeing them with fresh (and I hope more educated) eyes was amazing. I nearly called my friend Chris for those hammers because I did really dumb stuff and most amazing thought I was following my rules until I did the backward look with no emotion. What a lesson I learned now I just have to keep the lesson. Thanks, Chris glad to be back...I nearly lost my mind as I could not remember my username and password!

Leading up to 2/27 I tended to have 60-70% invested and 30-40%cash. The market at that time seemed so strong I go more and more cash in, until I was pretty much 100% invested and virtually all were calls (Ok, ok, Catherine, put the hammers away. It was 100% Calls) 2/27 hit and I thought "Ok it'll bounce back." 2/28 hit and I thought "I'm outa here." 50% later I was thinking "Ok time to re-think this."

Now I'm running pretty close to 100% in options, but I've got around 20-30% in puts. I'm managing to find puts that are either making money or, breaking even. To me, this is just like keeping 20-30% in cash, with the advantage that if the milk turns sour, I've got that 20-30% that's going to make me a ton of money (well... maybe 1/2 ton.)

I have no idea if this is what most would do, but it's got me sleeping at night and I'm still making money on my bulls.

So far so good. As Jeff and Eric have been bantering back and forth (and basically saying the same thing, think)you have to pick what works for you. so far this is working for me. When things change I'll make a change, too.

Hope this helps.

Hey PS,
All you VIP folks out there, what are you seeing that I'm not? I see it as an Asc triangle, but there's absolutely nothing that's telling me it's breaking out. There's gotta be volume and this thing is set to string out for another week, I'm sure.

Someone prove me wrong, please. I'm not able to get to a computer tomorrow, and if I see VIP up a bunch on big volume I'll be thrilled for you and even more thrilled if you let me know what it was I wasn't seeing. I'm sure going to watch it, but until I see a move, I'm on the sidelines.

Doji Girl.....girls that know about weapons rock, esp if they shoot only at targets, right? I have not shot a weapon since I left home and moved to FL (11yrs), when we make it to Bob's everyone best stear clear (lol). The only weapon I carry now is pepper spray b/c there are too many "crazies" in this neck of the woods...

DavidS....I did not know about the shuttle, do you think i will be able to see it from here (daytona/port orange). The retinal specialist that i refer to is hosting a huge party Friday night and we will be on the water, so it could be a nice show.....thanks for the heads up.

hey, i just noticed that i don't have a pic anymore.....does anybody know how i can get it back ???i can't remember how i got it there in the first place...

C & C,
As far as PCP goes and deep in the money, I was trying to find the right exit on this a week or better ago. Asked the question here on the blog and got a great response from someone (I hate to say I forgot who it was...sorry, you are all awesome) and asked it on market cast and Jeff gave the answer as option's price had very little time value. Chris, this blog rocks. One can learn from each and every post on it.

BTW Cabo is an awesome place to fish! Full of Dorado, Blue fin, and all kinds of sail fish and marlin. While there, check out "Cabo Wabo" for sure, this is Sammy Hagar's bar. His birthday week is especially nice.

Oh, almost forgot, While in Cabo also check out "Slim's Elbow Room". this claims to be the world's smallest bar. I am 6'6" and 240. When I got there, there was 1 other guy there, I had to wait for him to finish his Pacifico and leave before I could enter (fit in)........awesome

This comment has been removed by the author.

Just got back from Cabo last week and still am trying to catch up.

The place is great! We stayed at the Fiesta Americana. My wife earned a trip through a company she is a sales consultant for, PartyLite. I am not much a fisherman… Our daily routine was as follows: get up around 10 AM (very pleasing and easy to do without kids), workout, hit the hot tub, eat lunch and drink cerveza, read Reminiscences of a Stock Operator on the beach, mosey over to the swim up bar for 1,000 pesos or so, off to Cabos for dinner and more cervezas, finally a night cap at a bonfire with live music and more cervezas. I was cut off from margaritas after day two. They were much easier in college, at least I think they were.

Today, I was talking to a guy at work about the bearish play dilemma some are speaking of on the blog and how we both experience being up pretty healthy only to have virtually all of them come back and head out of our trend lines. In most cases, like C squared mentioned, we are getting very small profits, breaking even or taking very small losses. That is unless of course MGM resides to “talk” about selling their sole to the devil (some nerve) or EEP decides to dilute their stock without the permission of the people on the short side. I do however understand the reason for this type of insurance or diversification because I was saved on 2/27. I have yet to do a thorough analysis of the total cost of my insurance policy but will as soon as I catch up from vacation. My friend and I discussed exiting bearish trend trades in the bull market on retracements and buying again on the bounce from resistance to lock in profits rather than riding the trend through lower lows and lower highs. Yeah, you pay more in brokerage and could possibly miss a bigger leg down in the event of a drop-off before resistance, but that is the decision we all have to make for ourselves (this is very similar to what Doji Girl was talking about if not exactly). As for bearish price patterns, I have yet to have one hit my target. In time they always seem to work their way back above the breakout. AVB did it in grand fashion as you all well know. I am thinking about exiting price pattern bear plays that seem to use the same support level twice to lock in profits. Or just exit half the position and let the rest seek the greater goal of the target. I know that it is not sticking with the trend of the stock or pattern of the stock, but, these are insurance policies and small or medium sized gains are better than small profits, no profits, and small losses any day of the week.

Have a good week everyone.


Let me offer my opinion regarding your exchange with Jeff.

It sounds to me like you're frustrated right now because you're taking a lot of losses trading puts and you don't want to do it anymore.

I have some advice for you from my own experience. Before I begin, let me offer this suggestion: NEVER criticize someone for sharing a trade idea with you. Anyone who spends their time sharing their own hard work and research with you is providing you an opportunity. It's up to you to evaluate the trade parameters or do your own searches. That is totally uncalled for to slam Jeff. He doesn't get paid for this blog and he certainly isn't offering trade ideas for people to lose money. When you enter a trade, know there's a chance it won't work out and plan for that possibility. The guy has demolished the market and I know first hand (and many others here will speak to this point) that he's shared MANY of those winners with us.

As for the put saga, who isn't losing money on puts? I've had perfect setups go awry (AVB, AMR, etc). I've also had some nice winners. It's only natural that in a ridiculous up move like this market's having that a lot of your put plays will stall or fail. The upside to this is that your bullish trades should more than make up for it.

I've had strings in the last few months where i've lost over 12 trades IN A ROW. That's right. MORE THAN ONCE. many of those were put plays. Was I frustrated? Sure. But guess what? I still destroyed the market. And would I have done better JUST playing calls? Absolutely. But have you ever blown up your account? I have. Twice. And i'd rather take a bunch of small losses on failed put plays than have a couple huge down days wipe out what I've worked so hard to get.

This market should sharpen your skills finding bearish setups. If you want to go all bullish, then so be it. But even tight stops may not save you from a 500 point down day on the Dow. I can promise you that if you're not diversified you're going to be gone from here, whether you want to be or not. Perhaps you should explore using SPY to hedge all your bullish plays?

But if you decide to stay here, please feel free to participate in a constructive way. Don't jump on someone for trying to help. Jeff's had some MONSTER setups over the last year, and he's doing everyone a huge favor by running this community.


Tuche! I re-read my posts as well and can see how they may be misconstrued. For the record, I only use your (and the other Blogger's) recommendations as a starting point. As I mentioned, I then look for resistance, of support breaks, down trending industry group, and at least moderate to poor stock strength (F/E score less than 3). I then analyze my own entry, and exit strategies, R&R, etc.

I did not mean anything personal, only trying to add a rule (or two) to my system that will help with counter trends. A post on this would be very helpful.

I am wondering if I need to wait a little longer to pick up a counter trend trade (I normally would buy at the first close lower than the low of the high day), but that I have had too many reversals. Also, I am wondering if I need to give the option more room to move against me. I normally would go 1% above the local high as a hard stop, but with BLG I went 3% above, and still got stopped out.

Although I am seriously considering bagging the whole countertrend thing all together. Your point about using capital to make more money is a good one. I am certain I can make more short term, it is just the freak pull back that put's my stomach in a knot.

Did you just call Jeff a Tushy?


No one was slamming anyone, and especially not me. I have a lot of respect for him, and as you can tell from my two prior posts, had NO IDEA he felt as he did. I have been a student of his for over a year, listening to MasterTalk religiously, e-mailing with him, and even had lunch with him during my 3-day. My posts are nothing personal.

You are stating the same thing I am trying to say . . . I feel I need HELP in playing the bearish side of an uptrending market. That is how I have started every post I made. I have already had the experience of a major loss on a down day (although it was not 2/27). I have also seen how put plays can help in this situation (PLCE was a good counter trend trade for me).

I am only looking for rules that will help with my plan.


Hey Ladd, that was me with the answer about time value and PCP a couple weeks ago. Thanks for remembering! HA. Just kidding.

It's just so rare that I can actually post anything of help I am pleased to see that helped you.

And yes, everyone. The more in the money an option goes, the less that time value is a factor. Time is certainly one consideration in any option play, but price can always (ok, not always, but most often) trump it if it moves your direction.

Investools always engrains the "get out 30 days prior to expiration" but I think this, just like everything else in trading, is not a "one size fits all" rule. Each situation is different.

Eric and everyone,

Here's my $0.02 on counter trend put plays.

I think you get three things out of playing PUTs in a bull market:

1) You can make some money on them.

2) You can be diversified to protect against a massive pullback.

3) You can keep your trading skills sharp and learn how to trade more precisely.

It's number three that means a lot to me. After all, how hard is it to make money on bullish plays right now? It's easy, and it can make me think I'm a genius because I can't lose.

But someday the market will change. If it goes flat, PUTS and CALLS are going to be just as hard to play as PUTS are right now. So, I see the PUT plays as good practice.

As such, the only thing I might suggest is the idea of giving them more room to move, like you said Eric. If I think back to around 2/27, Eric and Jeff on the Marketcast were always saying that the way to trade in those conditions was to size smaller and give things more room to move. I think that is good advice for PUT plays now since they are the more difficult trade right now.

One of these days we'll have to play all of our trades that way again.

If it helps, sometimes puts ARE harder to play. I play them to get the experience. I take small positions. I lost money on some of the ideas here, but I got in after they had made their move. Jumped on a moving train. I knew that risk going in, though. Jeff also tells us a lot of times not to get in until they break a certain point. Sometimes, I do, sometimes I decide to get in early and take a chance. I know trading can be frustrating and especially when you lose money. Jeff is really trying to help us. I have been reading this blog for a while now, and if he came off harsh, it was one in a million for him. He truly is trying to help us.
So hang in there, don't take it personally. Don't quit playing the puts, but take small positions and in no time, you will be trading like a pro.


Good Morning, Futures are slightly. Does it matter the market seems to always rally back, keeping my fingers crossed as I say that! Jeff I appreciate your help with your picks they work great for Joan and I , and can't put in words what a help you and the blog has been for us. Keep up the great education you and everyone provides. And for the disbelievers read the disclaimer! Long on Faith!

Wow! Great communication or not. Eric, play puts if you see your entry and your risk, make sure you have your line in the sand to where you get out. You have to understand that there are no sure things, stocks go up and down counter trend all the time. That is why Jeff tell you it is a market of stocks. Play, what you feel is right thinking what if it goes against me.

Once you have a gain protect your profit by moving your stop loss if that makes you feel better. Commissions are cheap and you can get in and out of a trade without a major investment.

Thanks for all the Cabo posts, I will definitely get there soon.

Jeff, thank you for sharing your ideas and posts

Brett and Bob,
I am happy to say that looks like I was wrong on GOOG on calling 500 resistance. If it breaks through 510 today, wow!!!

I am watching it. It was a great trade for me and hopefully, still a great one for you guys. Still learning. I love this blog.

Randall and Michelle

How do you use the spy to hedge against your bull positions. Buying puts?. how often do you roll them or change them?

love to hear about this strategy


It is hard to find good put plays in an unbelievable bullmarket,one thing that I do is hedge with vix calls. Even with yesterdays up move,,the vix moved up,,,it really moves up with the down days, but it also sometimes move up with just the volatile days. Just another idea.



Thank you for teh response to teh question about % invested. I totally get and agree with your logic there. It did really help. What was great too was seeing the discussion about the puts. It is through discussions like these that we all grow. I learned so much from just this dialog between everyone. I hope that one day I could help you guys out as much as you have have all helped.


Bernacke said Subprime continues to dampen housing,Core inflation remains to the upside,Economy to grow slightly below trend in coming months, homebuilding will remain depressed for sometime, gradual ebbing of core inflation, core inflation remains to the up side, there will be Fed. guidiance for sub-prime lender.


I don't employ this strategy, but it can be an effective one. In fact, I've done it in the past, but it's kind of a zero-sum game in a way. You NEED the market to go down for those puts to be worth anything. Otherwise, they're a total loss. Contrast that with using your TA skills to find puts that will likely go down with the market or potentially even go down if the market keeps going higher. That's why I try to find bearish setups. Look at it this way: If you buy stock puts and the market powers higher, you may lose money on the puts and you may not. However, you will certainly lose money on the SPY puts.

That's my philosophy anyway. I'd do it if i simply couldn't find a bearish trade to speak of. I know Kelly did a mastertalk not too long ago on this topic and I know Kelly would email you a very thorough explanantion of it if you asked.

If you've seen the movie Rounders, Jeff is Mike McD and Kelly is more like Kinish.

Good Morning Bloggers!

I have a few extra peso's to trade and have been looking at a few different stocks. I though I would ask if anyone had an opinion on a couple of them:

BA - is it too overextended to catch the momentum from the 100 mark? I see it as a pretty good exit if it fails, but it does look a little overextended.

PCAR - is it resting or coiling tighter for the next good break out?

I'm open for other ideas. I have NE, FFIV, CMI, CLB, ADSK and Cat on the list to analyze for possible entries.


Thanks Brett for the comeback.

I also have used that strategy, buying out of the money puts, i lost money but made me sleep better.

Good morning everyone!
Check out BOOM for an ascending triangle breakout...pre-market is also up--for now :)

Tonya, I forgot about the shuttle question. If it is a clear night you will see it from Daytona for sure.

Let's all pray that it is a safe trip for our astronauts.

Good Morning to everyone. I missed most of the blog yesterday so just catching up.

Hey Strat, I see where you are from Downers Grove, IL. That's where I grew up and later moved to the northside of Chitown.

And Chris and/or Catherine....who works in the airline biz? I worked for UAUA for many many years before saying so long to all the BS. Best move I ever made!

Speaking of UAUA, I've been watching this and playing it on paper. Played a short term bounce off support at about $34.75 got out at $39ish and now played the PUT for the downside.

All you addicts out there who like playing the airlines or considering it. To some this is obvious but to those who are not aware...BIG corralation between $OIX and $XAL. Do a comparison study and it will jump at you.
UAUA and CAL almost run in tandem as do many of the Legacy" carriers ie UAUA, LCC, DL, AMR. Airlines are risky but good short termers for bounce plays.

Also, being an ex UAUA employee with many friends still in the biz, some rumor about UAUA and CAL merger in the fall. CAL would most likely see the upside of the deal as UAUA would be the buyer. Something to watch for !?

That's my $0.02 worth for today.

Strat...reach out and let's talk Chicago. Sez who, sez me!

Bullish - FARO, NYX
Bearish - BFAM

Steve K.

PS: great advice from Brett...all trades shared are strating points but ultimately it's "the trigger wo/man" who makes the decision. Great discussions on Monday.

Addict-O-Meter = 10

Long or short
You must decide
Find a trade
And let it ride!

Draw your lines
And follow the trend
Profits oh addicts
Are your best friend!

Wise is Jeff Kohler
Gives us trades oh how could he
Some are so good
They gave me a woody!

Patience a must
Ride the highs and the lows
AVB kicked my ass
That really blows!

Buy some POT
And enjoy PCP
Testing resistance

My fellow bloggers
Jason Jamie Liz and Sue
Mike Chip and David
Tim and C2

Contribute you must
And do not Frett
Keeping you focused
Is our friend Brett!

Oh he’s a tough one
And his mocha of white
He’ll eat a burrito
I’ll bet that’s a site!!!

Now they seek weapons
I bet they drink grog
Tonya and friends
The lady’s of Blog

Jeff and the marketcast
And funny Utley
What’s this on my shorts
I think it is pee

An accident oh no
They have made me laugh
How can I follow
My trade and the graph!

The market will open
I will dance I will sing
At the end of the day
A nice cold Yuengling

Later you addicts
Have a great day
Pay attention to time
It will surely decay!

Nice...but I'm not sure about the Utley and pee connection?

from laughing...

opps, disregard the BFAM as bear. Wrong symbol.

Bob, I meant I'm not sure that Utley would want to be rhymed with pee. Might give Jeff some ribbing ammo.
Cute though.

Okay, Bob. From a girl's perspective, kind of crude humor. Hey, this is a family show. I still like you anyway (laughter.)


No offense intended Michell, just trying to lighten things up a bit..not looking to offend...just in a goofy mood this am...

very nice Bob, I liked it. A little originality

Bob Raimo,

No one can accuse you of being anything but 'Original' and hysterical. Thanks for all of your posts including your newest addition...poetry!

If VIp continues today I am going to be asking more picks from you

who made that prediction?

love it Bob!!!


oh,,,who gets credit for the vip trade,,,you called it ,,up today,


BCSI breaking out of another flag

Bob, I like you and Brett too much to get offended. Just trying to keep it clean for us Christians.

Okay. Who let in the Bears? It's time for some good bull action to push my positions out of their holding patterns. I am watching VIP, too. I could kind of see where they were talking about a triangle, but I think the market may need to rally to push VIP up. It seems to be stubbornly resisting moving off it's support.

Randall and Michelle

I find it very coincidental that when we are looking at the markets and see that they are in need of a pull back, Bernanke comes out with market retreating statements. I have seen this a lot, time for a pullback, or a rise, and news comes out to spark it...Hmmm....

Am I imagining this??

I think we would be nieve to believe that market manipulation doesn't go on at high levels. There probably is a correlation, but I'm not sophisticated enough to figure it all out. I am just sticking to my charts trying to make small potatoes compared to some of the big boys' billions. I am happy with the millions (laughter.)

Randall and Michelle

Bob, very creative but i'm pretty sure you've lost your mind.

You think POT would need to take a breather, but it just keeps on going. Thanks to C&C for putting it on my radar. I bought some stock a while back at a bounce and think it's a great stock to keep in the portfolio. Just look at the movement in the last year. You could just buy and hold some of that baby and do well.

Randall and Michelle

is anyone going to the July Advanced Options class in Chicago?



Rock the house.

BNI getting close to a low risk entry.., thanks yet again Brett....

VIP is still $3 away from the prediction. An up day is not good enough - we are looking for $105+. I just woke up and caught up on the blog. Sweet Moses you guys must get up early.



That Kelly/Jeff comparison was so money.

I'm flattered.


My daughter up all night sick, wife in CA, so I got no sleep....

A littel giddy this morning.

Giddy up..

Another good day in the market....

go AMZN go


Put it on your radar..

GS....keep your eye on this too...

I agree on GS. Don't know if you've read How I Made $2,000,000 in the Market, but in reference to that book, I have been studying GS, and I think it is moving up into a new set of boxes. We just need a good up day to push it up there. It is a great stock, too.
Look at the one-year gains on that one, too.


Michelle, based on your mention of the book I bought it and read it this weekend. That and the Wizards book got me to review all my trades for the year and WOW what an eye opening experience. I saw these boxes as what we call support and resistance or consolidations points. Is that what you understood as well? I will have to look at GS. Did anyone play RYAAY, I did not but wow look what the news did.

Hey Addicts-

Just trying to catch up on the blog and boy there are a lot of comments to go through. Miss half a day and it's like it takes 20 years to catch up on all the reading. I'm going to go through withdrawal when I take off for a week this summer. My in-laws only have dial up and I may have to pull out all my hair if I try to use their computer.

I'm still laughing at your "poetry"!

COH is dropping this morning. Maybe it's decided to reverse.

But boy do I love me some POT! It's looking a bit overextended but I sure have had a nice ride with this one.

Still waiting for some nice selling volume on PVTB. Still looks good though.

My account is not really doing anything today. Not moving up but it's not moving down either so that's good. I'd rather it go nowhere than down.

pasadena, ca

Yeah, I see great support at 225, but just recently it has moved to 230. I think it is about to move from the 225/230 box to 230/235 or 240. I have stop at 225, but see it easily moving into the next box soon. Plus, looking at the movement this year, it has some great potential. Anyway, that's also my reasoning for having a small position in VIP. It can't seem to break out of the box it's in.


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About me

  • I'm Option Addict
  • From Saratoga Springs, Utah, United States
  • I am a professional trader and an instructor for Investools. I've had relations with the markets for 9 years. Born in Concord, CA, but reside in Saratoga Springs, Utah. Father of THREE, Husband of one.
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