Turn Around

Not trying to call any tops here, but the market looks to be stalling right around the obvious resistance levels. Perhaps this is why my bearish trades this week are roughly 3:1? Here is a chart of the Dow that illustrates the point I am trying to make.

Speaking of bearish, what about the US dollar? For my Currency Addicts out there that EUR/USD trade is rocking the house, ain't it? For The ETF Addicts out there, take a look at the FXE. Option Addicts, don't feel left out, it is optionable... but I don't endorse them.

Any Bond Addicts out there? Didn't think so. However getting that rate to float around or below 5% is critical to keep money from fleeing the stock market. Summer money flow is running on empty as it is, we don't need big money out there moving into interest rate products.

Finally the big movers today are somewhat actionable. Let's start with the pounding that SHLD is making. Take a look at the 5 yr...

This indicates a failed Cup and Handle pattern. I'm not a huge fan of this pattern... and also read recently in a trader interview that Bulkowski quotes this pattern as one of the least reliable. He's one of the few "specialists" on the topic.

The pattern nor the "specialist" are what concern me here. What concerns me is that this move is a monster breakdown of a significant support/resistance level for this stock. However, since this stock is a little irrational, I'd approach this with a credit spread. 165/170's. Preferably short dated, easy on the relish, heavy on the mustard.

Next I want to give a nod to the trading gods on BIDU. Have you ever seen what used to be a single digit option obtain over $70 per contract of intrinsic value. Insane.

Finally... we are not going to look at Apple, but I want to reflect on the continuous bullish movement it is making. Anyone jumping for joy?

It is "iRonic" that the stock announces a nano iPhone to be ready by 4Q. Apple to $200, all aboard!

So I am not concerned about a major market turn around, but we might see an itty-bitty one nonetheless. BTW, speaking of turn around...

Recommendation: Buy Apple at some point.

Long: Bright Eyes

Short: A total eclipse of my heart

My dreams of SKX burning in hell are finally being realized.

bot some aapl yesterday - 135 call at 1.40 sold today at 2.75... Not a bad 1 day trade!!!!
AAPL is the SHIZZZZZZZZZZzzzzzzzzy!
Although I am a very short term trader/option addict, I bot some Jan 160 aapl calls at 4.10 - today worth 7.50.
I am holding these bad boys till Jan or until chart says bail. I am looking for 200. In the meantime, I have other aapl calls that I will be working on, waiting for pullbacks.
Good luck to all!!! Now go get an iPhone... It is amazing technology!!!

Wow, just got back and MLM not doing well at all. My others are OK but MLM is clearing my gains off the board. Only have two contracts but still is difficult to wait until the end of the day as I am well past my mental stop and max loss on this. Emotions...

BXP looks good

Bob & Pam,

I too just got back & still have MLM. It definatley passed my line in the sand but at this point do we wait till the end of the day? Is there no hope for a little recovery? Emotions!

Hey Jeff

Just wanted to comment on how upbeat you have been lately. Glad to see things are going well.... love all the pics, I'm very visual so it has been great. Also, love all the music video's. They make me giggle....


With situations like MLM, this falls into the "patience" thing I talked about the other day...

Why patiently wait for a bigger loss?

Do you have a worse case scenario for this trade, a line that no matter what, you won't let the stock across?


Recent feedback (and performance enhancing products) are the culprit behind my attempt of upbeatness. Thank you for noticing.


Jeff :

What is your take on ATI. Do you put any credence to the take over talks?

There is an astronomical amount of calls being traded. Any thoughts?


For at least my own curiosity and maybe others regarding your MLM post above...huh...?

Were you speaking rhetorically, literally, both or neither, I was confused. Thanks

Hey Addicts,

If you haven't gotten short some homebuilders already, take a look at KBH and LEN.

Joel R.

At some point patience becomes increasingly expensive, doesn't it? Imagine trading solely by that philosophy back in the late 90's when stocks droped double digit percentages intra-day and kept falling. Patience pays off for winners, not losers, right?

Or am I off base?

The purpose was to mention having a worst case scenario. If MLM were to finish the day down $5,$6,$7 would you take it ALL?

Any thoughs on ANF. Good volume yesterday and today on the downside. Bounced off trendlin resistence yesterday also in a decent up day.


Roger-that. Based on what I've seen over time, 'sometimes', not always, a stock will drop like a rock only to rebound intra-day for either a smaller loss or even a gain on the day.

While yes, MLM has crossed my line, it was a matter of do I take the loss at this point in time or later with potentially a smaller (or larger) loss, especially since volatility in the early morning is usually greatest. For me personally, the loss will be relatively small, although don't want it to be any larger than necessary...make sense or is this logic flawed? Thanks

Yeah, I went ahead and dumped BIDU around $139 for a nice profit.


You are absolutely right... as you know that is why I teach waiting until the end of the day to make exit decisions.

I am not referring to MLM so much as I am just trying to explore the principal behind having a worse case scenario. Most individuals are already doing this as they enter the trade, but for the next time you are in a trade that is collapsing, this might keep you from holding on throughout the day, making the loss worse.



Yeah, but your DIA puts are kicking some major tail, aren't they?

Short: 10 NQ's!!!


I like ANF. Short it.

Retail going to zero.

I can't stop talking.


Hi all,

I wanted to comment on MLM, from a long term perspective, it looks like a potential buying opportunity, in that it is above its 50 day moving average and may bounce off.

MLM is also near a trend line starting on the March 5 close.

Finally, if you believe in Fibonacci's: MLM, at this moment, is sitting right at the 50% retracement.

Am I seeing what I want to see or does anyone agree with me?


Guys, I got stopped out of MLM at $156.21. That's why I always use mechanical stops. When a stock comes back up after my stop is hit, I don't like it but it keeps me out of trouble to define my risk going in. MLM may recover some by the end of day. I hope it does for those of you still holding.



Absolute BEST and funniest comment of the day regarding BIDU! I wasn't in at all ... shame on me!

Just FYI ... I have, in the last month, played with my proverbial 'line in the sand' THREE times .. saying .. 'ah it will be ok ...' and it was ... if I had wanted to lose that kind of money ALL THREE TIMES ... As Jeff has said, you can always get back in ... :))

Maybe a little help for the MLM pain! Hope so!


Thanks, that adds clarity to what you were saying, that I wasn't getting. Hopefully that helps others too.

I see the market is dumping even more, so am looking at positions and starting to exit if/as appropriate.

Patience paying off. Back in the plus side.


Great trend.

As long as we're getting creative with MLM and chart patterns, I see it as a H&S about to crack the neckline.

If you say retailers are going to zero, do you put JOSB in that group as well? You came out on your last video with that as a bullish trade (and I have been in it for about a week now, patiently (ahem) waiting for it bounce off it's trend line).

I just discussed MLM with an IT coach at some length. As some of you know I use an emergency stops (twice ATR or 3% below support) and a mental exit. On MLM I had 154.5 as the emergency stop which has yet to be triggered. The problem is that yesterday my mental was not triggered and today it blew right past it and I was away from the computer. I normally use between the mental and emergency stop to determine my position sizing (that I may be modifying). After talking all this through with the coach I closed my two contracts for a larger loss than expected. He pointed out the lower high that has formed and that intra-day we are getting continued lower highs and lower lows. He suggested a line in the sand intra-day that broke as we were talking on the phone. I am an end of day trader as well but this one had to go...
My $0.02 that is really worth zero just thought I would share.


Nice work. That is a great example of applying patience to a trade that hasn't actually done any wrong. Too bad I traded a spread.

I hate spreads.

Its tough to right this w/o sounding like a smart a$$. I appreciate your comments on BIDU. I got out of the trade on 7/3. I had July's.....but still, I have been kicking myself. Great trade nontheless


True, but I didn't buy nearly enough of them :(

Let me know when the class begins for shorting futures.


Your comments are always welcome, don't 'short' yourself! Thanks for playing, it helps all of us!


Thanks for playing with us today, we've missed you!

Jeff, good point! Comparing BSC and MLM for patience is a good lesson I think for me at least. I was in both and BSC was patient with for the right reasons and MLM was too patient with. MLM was trying to tell me something I was not seeing it.

This community is great. Had I had to sort out all the ideas on MLM on my own, I would always be questioning myself on my actions. Here I can have my thoughts and many times they are echoed by others and confirms my actions. This has helped me tremendously in my trading.THANK YOU to all.

Doji Girl,

That video was Sooooooo yesterday.


Just kidding, but JOSB is holding well despite some meltdowns in retail.

Jeff is prolific today and has posted two new threads....


I know WYNN was soooooo yesterday too, but are we seeing an entry finally today?

Oh well, I'm out of MLM also. Kind of wish I had either 1) not added 5 contracts yesterday (to my already existing 5 contracts) or 2)sold earlier today when it was down $3 and I thought something was up instead of where I actually sold down $5.40ish. -sigh

However, MLM has been below the 30 day MA a good bit before within the past during the current uptrend- it has just been a darn long time. Hopefully it will right itself and take off again. I just didn't want to see how far it was gonna roll down first. Looks like some support at $152-ish.

1st big ouch-o in awhile.

James H.

Ok I dont know what has gotten into Jeff today.....But I promise I didn't put anyh speed in his morning coffee!!!


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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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