I'm Going to Hurl...

Wow, what a reversal! That was unreal. I am a little sea sick now, but what do you know...

Here we are sitting right at those very important levels we've discussed. Oh yeah, one more thing...


Time to sell options? I think there might be a trend brewing here....

Recommendation: I'll be back after the close.

Long: A little

Short: A lot

After holding that AMAG do nothing stock it is finally now doing something.

I agree with you B(P)!

Wow! I'm just logging on for the day. Wild ride, but nice.

Jeff, anyone,

Goldman Sachs today came out with a buy recommendation for GM. They also recommended a call spread, to buy Sept $37.50 and sell the Sept $42.50. Any perspective, does this seem to be a reasonable, low risk strategy for GM? Thanks.

Jeff,
Took your advice on selling premium before you posted and sold a put on CLF. Of course I sold it when the market was at the high of the day so I am underwater at this point but the calls were too darn expensive to buy the call so I did the next best thing.

Long: VIP PCU HURN & DSX
Short: BSC PAY AMAG HNI NYX

DLB looks like a nice entry ... weaker volume ... couldn't break through the old support of 32.60 ish

A lot of profit taking today. I've started to GROWL !!

KRC - This is the most massive H&S pattern and the worst stock I've ever seen fundamentally. Only problem is there are no options available. I would love to short this stock but never having actually shorted a stock I am askeered. Is that silly?

Doji Girl, Short the stock, It says it is easy to borrow ! I see the set up and it's in the right industry.

Boy, I'm glad I sold my GS last week. Looks like they took a hit today too with the Bear Stearns news.

Michelle

Doji Girl, I would wait for confirmation, to break support, but then again do what your comfortable with. There is always another trade!

I'm showing support right here at 70 and it closed at 69.96, down with good volume. It could hold here and take off again but I honestly don't know what is holding this stock up. The industry is "0" on the Big CHart, the phase 1 is 0/8 and it doesn't even have a F/E. I think if it breaks, there could be 20 points in this.

Fed announcement later this week. Wonder if I should wait til then.

After seeing the double tops in the $DJI,$SPX,SPY and starting to form on $COMPX I taken a bearish stance in the Mkt. Tomorrow could be interesting. Wed. the Fed. My sixth sense tells me the Mkt is very nervous & volitile. But then again it could just be me.

Doji Girl-

The most massive head & shoulders? How about RTI today, which clearly confirmed AND is optionable? Over a $20 target.

Optionfanatic-

There are NO double tops on any of the indices you mention. Feel free to take a bearish stance, but there isn't a double top to be found yet.

Is RED clouding my vision or is DNA and JCP just screaming to be picked up for PUT plays .... ???

Thoughts?

LONG: POT, DECK, STR, AMX
SHORT: PAY, NYX, ADM, BA

I think posting Longs and Shorts can help us out here .... We have to be precise right now I think .....

Benton,

Some of us took down JCP at $75, so i'd say wait for a bear flag setup or maybe some kind of bounce before getting in. Too much risk.

Brett, Maybe you can help me define a double top.

Thanks Brett! Good word!

This comment has been removed by the author.

Got stopped out on quite a few calls today. Puts all still looking good.

OF-

You're missing a critical component of the double top. I'm quoting Murphy here:

"The reversal is not complete until the previous support point is violated on a closing basis. Until that happens, prices could be in just a sideways consolidation phase, preparing for a resumption of the original uptrend. A decisive close under the middle trough on heavier volume completes the pattern and signals a reversal of trend to the downside."

Right now, there are no double tops, just defined support and resistance levels.

Brett,
My H&S is bigger than your H&S! RTI does look interesting but not COMPELLING. I see potential support in a couple of close places with RTI (75 & 70),plus it is a strong stock fundamentally so it could easily recover. KRC has no redeeming qualities whatsoever.

Thanks Brett,A point well taken.

LXK looks interesting, broke long term support of 50.

Brett, good call on RTI, go to 2 yr chart...$78-79 has proven to be quite a price point.

A bit of a Black Swan today while I was at the gym. I was wondering if anyone has resorted to selling options?

Cheers

Looks like the CAST is doing its "thing" again and repeating Fridays session even though it says Monday.
Today was not too bad for us but sure had some great virtual profits earlier today that turned into a small loss. KOMG and BA stopped out today and I am not sad to see either go as I may have held too long, a patience building exercise...

I am thinking the IYR looks like a good downward pattern. Anything I am missing.

Bob-

That's how I was feeling today with the X. Building patience. It finally closed below my exit today so... so long to the X.

I find things are usually up and running with the cast around 5:30/6:00 our time. (PST)

liz

Cast is up. 6:30 MST

Today's cast is now playing--8:40 p.m. EST.

I'm interested in learning more about spread trading. I opened the Advanced Options Trading Rooms but don't even know which ones to start with. Does anyone have any experience/comments on what's a good strategy to start with?
Thanks in advance for any help

I exited KOMG today as well. Bigger loss than expected due to its dramatic move today. My frustration is that I held on at least one day too long. It passed my line in the sand (barely) a couple days ago but I was trying to be patient and draw those big thick lines. I needed to remember it is a low priced stock and so a dime or a quarter is really pretty big percentage-wise. But, hey, it's just another trade ... moving on now.

Liz, I also exited X today. My line was 112.50. I'm a little concerned on this one that I didn't give it enough room, given that it is a higher priced stock and 50 cents or so isn't that big. But, it has been looking weak and I felt overexposed and needed to reduce a little exposure so I took it out.

Other than those two, I held everything else. Trying very hard to not react emotionally and just look at the lines I have drawn.

Whoever said that we need to be "precise" right now -- that's a good word. After all, everyone's a genius in a bull market. Personally, I'm hopeful for the bounce and return to rallying so that my IQ will go back up. But, I'm prepared either way.

Thanks everyone for the discussion and the support. This is new territory for me so I need all the help I can get.

To anonymous who asked about spread trading. I think learning to sell verticals is a great place to start. Some great free education can be found at ThinkOrSwim here:

Click here to visit TOS chat archive

Scroll down to where it says "trading strategies" and click on "all strategies". Then look down to 10/04/2006 -- Directional Trades with Options -- you can download the audio file or listen online. That's a great session.

There are a ton of other great sessions there as well, but that's a good place to start.

Why is it that "I am going to hurl" seems more believable with Jeff's current picture?
Liz, I am still in X but am probably out tomorrow.
Tim, I am trying something I read in Wizards that may be horrible advice I just do not know yet. I forget the wizard who said it but it was something like once you feel the trade is moving against you start to sell out of it like 1/4 to 1/2 of the position at a time. I did this with KOMG until today I only had one contract. Although I only started with 3 it did limit my downside some. I have been using your 2(ATR) or 3% support break idea as my emergency stop and so far so good. They may be tested tomorrow as I am out for the morning again, which I really hate seeing how the market was today. Futures are up pretty good tonight though - whatever that means.

Bob, that is a good thought. I always forget about stepping in or out one contract at a time. I am often trading only one contract so it's not possible, but on KOMG I had two and could have employed that technique.

Actually, on KOMG I sold call verticals, so it was even a spread trade for me. Another reason I was giving it a little more room since I had time decay working in my favor. But positive Theta doesn't help much when the underlying goes 5% against you! :)

Tim-

I exited KOMG a couple days ago. It passed my exit line and I didn't want to give it too much room because I have a smaller account. I felt like I could find a better put play and I did.... PAY. But I held onto KOMG for awhile. I felt proud of myself for holding onto it as long as I did because before I would have rashly exited with barely a signal. At least I waited until it gave me a signal. It was hard though.

And X-my out was 112.50 as well. Hey, if it goes back up, it's at a great entry point. I also held onto all my other trades. Since I'm leaving next week I don't want to get into anything new just yet.

We'll get there Tim. Hopefully, we won't be white knuckling it all the way. As long as we continue to deposit our emotions on the blog and not in our trades we'll continue to get better and better.

liz

Bob-

Can you or Tim or whoever explain to me about using the 2(ATR)? I read Jeff's article or post on ATR a long while ago but it didn't make much sense to me at the time. I should probably go back and re-read it but I don't remember him discussing 2(ATR). How do you guys use it? (I know you use it to determine the movement of the stock, right?-but how?) Any extra explanation would be helpful or just point me in the right direction. I will go back and re-read Jeff's post on ATR as well.

Thanks,

liz

Liz, I like your "depositing our emotions on the blog" statement as that is exactly how I feel sometimes. As I got this from Tim you should probably hear this from him as I have two weeks experience with it. But what I do is get the ATR off the chart (add ATR studies) and just multiply the current ATR by two for an emergency stop. So stock at $100 and ATR of $2 emergency stop at $96. Then I look at support and also calculate a 3% break of support and whichever is larger I use that as my emergency stop and set an alert with TOS or IT for my mental stop or like $0.20 before that mental stop to warn me. This way I rarely get stopped out but have a safety net if the trades free fall while I am out or intraday. Keep in mind I am a 2 weak expert. Yes, I meant weak.

Help me, help me please! I am looking at VIP again. As I am in that too weak state of mind Jeff has got me thinking that the chart and trade look good. Chris get me a hammer quick! You must have one handy with all that building you are doing.

I've been in VIP for some time now. "everyone should get long some VIMPEL"......(or something like that) .....and I quote (kinda)

of course VIP is down $3 and change after market....but who cares

BD (Bob),

I know, I know...VIP, it holds it's own demons for me. Brett and DG pointed out on Friday that it was right at both horizontal and diag support, so I held my breath and jumped into a small position. I've been handed my hat the last several VIP trades and really didn't want to eat it the next time.

So I'm in and after watching early today was cussing it, although as the day wore on, I was slowing exhaling. Tomorrow and the next day hold more to come, although I 'feel' much better about it now. If this trade goes south, I'm out with a small loss, if it stalls for long, I'm out with either a small loss or gain. If it moves up, I'll be very happy in an 'unemotional' kind of way!!!

Jeff said to buy options 3 months out to give this thing enough time. I only had enough cash to buy into August, although I figure that's enough time for me and this little VIP confidence builder!

Hang in there!

Ladd,

The after-market prices have little effect on the prices you'll see in the morning when the market opens.

Does anyone know the implementation date for prophet patterns in the toolbox?

RE: the phophet patterns... I called IT and they said they don't have a projected release time. They said they are still "working on it". Someone in the blog earlier mentioned that TOS has a pattern search. I checked it out and it appears to be alright though I don't like the chart format as much as IT.

Liz, just adding onto what Bob was saying about the 2 ATR method. That was just something I shared a while back about what I do with regards to waiting to the end of the day to make decisions. I mentioned that I really have two stop points -- an "emergency" stop that I never intend to actually use but is just there to protect against a major market tumble like 2/27. And then a "close below" stop that I use at the end of the day to make decisions.

I have tried setting my emergency stop based on the GREATER of either 3% below the "close below" stop or 2xATR.

To figure my risk, I actually split the difference between the two stop points, figuring that I won't always hit the worst case, or the best case, but on average will get out somewhere in the middle.

In truth, I really only use the emergency stop if I can't be at the computer. Since its whole purpose is to protect against a major market tumble, as long as I'm around my computer I can see if a market tumble is happening and react accordingly. But this is something I tried when I have to use auto stops.

Denise,

How do you do pattern search in TOS ?

Kas

Just saw a post on RTI as H & S....you might want to check out the fundamentals on this stock: great phase 1 & phase 2, a hot industry group, and until about 2 weeks ago the stock had outperformed the industry since early November....not to say it couldn't dive, but only that there is a chance it could just be going sideways for a bit.

Denise / Kas -- I mentioned earlier that TOS has said they will be adding pattern searching soon, but it is not available yet.

Teresa,

If I waited until the fundamentals of every head and shoulders breakdown confirmed the pattern, i'd have missed most of the moves. Stock prices often forecast deteriorating fundamentals.

Then again, I may be wrong and will be just another small loss. But if I'm right...

Fundamentals.

I never look at them, unless I am investing in a trade. There is a difference between investing and trading....

When trading, I consult the chart, price action, volume and trendlines ....I trade patterns, support and resistance bounces, I don't look at fundamentals. I have seen too many stocks move in the direction opposite of what you would think their fundamentals indicate...and as an option trader, I am interested in price action and volume, not fundamentals. As an investor, yes, I'd look at fundamentals.

Hi Chip,
Yes, I understand that after hours trading does not hold to much meaning, I was trying to be funny (unsuccessfully), I guess it is difficult to express humor sometimes on a forum like this, kind of like emails, the underlying meaning of ones comments can be lost....
Thanks

Tim/Kas - I have pattern search that I can use through Optionsxpress. Investools doesn't have it up and running yet. Sorry, Tim, I said TOS instead of Optionsxpress. My bad.

Denise

Bob and Pam,
I love those Wizard books. I have implemented some of the advice into my trading. I phase out and use that same style to add to my positions. That way, if the market moves back up, I didn't totally miss the move, but am not taking a huge loss either.
I know Jeff mentioned VIP last night. That trade never works for me. I am with VIP like Jeff is with GOOG. I just stay away. It pops me for cash every time I trade it.

Oh, another good read is "Who Moved My Cheese." It is a short easy book to read about thinking differently (no religious stuff in it, so safe for all.)

Michelle

Is there news on oil this week? My BHI and SLB are struggling?

Also RIMM hit 165 support and is heading up. Good entry report.
Beware of earnings coming up, though.

Randall and Michelle

Jeff or anybody,
With the new toolbox, I am having trouble finding the CANSLIM search. I am reading the book by O'Neil and would like to pull up that search and look at the stocks.
Where is it?
I could call support and be on hold forever, but thought somebody here might know.

Michelle

Michelle...

I get through pretty quick on live chat...

I think we are in for another dueling dragons day...

For those of you who feel you may have missed the utilities breakdown, check out OTTR. It broke friday on huge volume and $31 resistance is holding today. 20% move expected.

Ramio, I agree. Again futures really have no correlation with what the market does.
Wow, NOV is testing my end of day rule already...

Well, I really can't complain. All my trades making me $$, except AAPL...which has held support for me..at least so far...sold half of TRMB to lock in some profits..

Tim-

Thanks for the info.

liz

Did you check out SLV today? Another almost 5 point drop.

I'm going to go out on a limb and predict that the market is either going to go up or down today, or both, or maybe just stay flat and then when the fed makes the announcement tomorrow, it'll probably go up, unless it goes down or just stays flat, though that's probably not as likely.

You can count on it...

Tim-

So adept!

liz

Tim...you are dead on!! Kinda like the weatherman...or more like this.....

On a bright sunny day
in the middle of the night
to dead boys
got up to fight

Back to back
they faced each other
pulled out their knives
and shot each other

A deaf policman heard the noise
and came to shoot the two dead boys

If you don't belive this story's true
Ask the blind lady, she saw it too.

FCX

Put it in your watch list....

CSX been coiling up......

EEM-right at horizontal resistance. Will we crash through or bounce? I guess we'll see.

TNX is sitting right on top of its 10 day moving average. But it broke it's trendline support a couple of days ago.

XBD & BKX are up today, though slightly. So, maybe that will mean the market may be up slightly...

liz

DWSN...flaggin??, and MIGHT be at a support area right now...

ROP..add to watch list....

I am not really trading anything new. Just hanging on by the skin of my teeth with what I've got now.

I wish I had more experience. Is this what happens right before a bear market? What does this action mean? Do I hang on or bail?
Most of my trades suck right now. Nothing has broken support but darned close.

Michelle

ZOLT

Brett pointed this one out...I am eager to get in....keeping this on my ready aim fire list....

Some encouraging words, please.
My account is at the LOWEST it's ever been. I am trying not to get emotional, but struggling.

I know this to shall pass, but it is money.


Michelle

Michelle..

Look at the charts, not your account. Like the charts, your account is going to fluctuate, up and down. Check your trades and your position sizing. Never be afraid to lock in some profits when you have them...I sometimes sell off half of a trade to lock in profits when my initial target is reached, then re-invest that $$ in a new trade that is at a support or resistance area, or a breakout on a new pattern.

Raimo-

Love your poem! That was truly... i'm really not sure what, but it was funny!

liz

new thread

sue

Jeff,

I just noticed you changed the title of the page. I'm not sure when you did that but I think it looks a lot better now, without all the underscores.

Liz, well, aside from being funny, my point was that Tim was right with his market forecast, nothing makes sense, it can go either way...LOL..

PCAR - ascending triangle with early breakout and now fallen back into it - or - just sideways consolidation pattern that has now fallen below support and is headed for the depths?

Thoughts?

I've got an ascending triangle drawn and that diagonal support line looks like it is catching it but ... dunno.

James H.

Michelle-

I second what Raimo has to say. Maybe reevaluate your position size. I don't know how big your account is but I can tell you from personal experience that at the beginning when I first started trading I had way too many contracts compared to the size of my account.

Take a deep breath.

Now, look at the trades you've been making and decide whether or not you've been following your rules.

If you're positioned correctly for your account size and you're following your rules stop looking at your account fluctuating. Depending on the day, your account may fluctuate a lot, like the market.

Take a deep breath.

liz

Michelle, I feel for ya. I've been up $10k and down $10k a week for the last few weeks. Last week was a down $10k week and this week hasn't started out well and my normal strong horses aren't performing.

Time to reevaluate, rethink, and wonder if I've taken steps forward or just gotten a bit lucky to even tread water lol. One of these days, the portfolio WILL advance. Oh well, at least I feel like I have learned alot over the last few months. I can at least throw more speed bumps in front of the portfolio decline than before and if it wasn't for the market "corrections" I feel like I actually do a little better than tread water these days.

Now to learn to deal with these corrections, earnings dates, and setbacks. It shall be done! We'll get there Michelle.

These last few weeks have been a little more challeging for me also. I'm sure I've jumped the gun on entrances and exits but I'll review and hopefully learn. I just hope to limit the expense on some of those lessons in the future. Good luck.

James H.

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  • 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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