Low Risk Trades In Headline Risk Groups

The big name groups i've been bearish on for the last 2-3 months are providing the usual low risk entry point that they normally do about every 2-3 weeks. Time to start swinging.

There is obviously a lot of headline risk around these groups, which ought to be taken into consideration before taking any trades, but an entry point is an entry point. I'm starting with homebuilders.

Homebuliders: I'm only interested in the stocks that haven't hit $20 or less yet. I want to hop in the next "going to $20" homebuilder stock.



Next: Realty Stocks



I am flattered by everyone's offer to substitute my weekly watchlist, but thanks anyway. I've got it covered. The real deal is coming out later this evening. Stay tuned.

Recommendation: "Choose, but choose wisely..."

Long: Puts

Short: Monday

Buy that $RUT stayed down in the red all day and the $INDU and the spooz are really trying to follow suit!

Long: Kid Rock, Rounders, BPHX

Short: $RUT


Nice list, Jeff. I'm already in GGP and added KBH today. Tried to do AVB and/or ESS but the spreads were crazy. I like CPT but no options so that means I have to short the stock.

For a bullish idea I was looking at PCP. It is sitting right at support with a big 'ole hammer from Friday and a doji today with small volume. The options are not too crazy though the premium is still high...maybe going deeper ITM will help there. Anybody looking at this one?

I agree with the premiums being crazy. I was really liking the set up on OFC.

Any thoughts out the on a another trip to the dance with OFC?


Jeff you just made my day. I'm already in PSA(@76) and entered KBH this afternoon, only to check in on the blog and find out you approve of my trades. I'll sleep much better tonight. I'm ready for the next leg down.

PCP is a great stock. Deep in the money calls are a good choice, but not if you get another day like it had last week.

Way back to your comments on deciding to exit after the close vs. intra day. I like to wait till the end of the day and close out right before the close.

I consider that pseudo "after the close" (and the open is too crazy).

Weird thing, I am trapped, it seems with this volatility I have some stocks sore up during the day and return to about even or worse at the end. None of my trades have broken down, but I just feel stuck.

Might I consider "bending the rules" and closing out trades intra day when they are at their heights or is this just crazy talk?

Anyone want to take a shot?


The Video play is coool.....

Not sure this is the right thing to do but it works for me and that is to let the stock's action tell me when to close the trade. If it's on the trendline and I'm not sure if it's broken or not, I will wait to the end of the day (last half hour) but if I see a winner starting to fail, especially when the rest of the market is going the other way, I will close the position at any time (except the first 15 minutes of the day). I did that this morning with ATW. I had a nice profit from last week and it looked like it was continuing but by 10:30 it was dropping for no particular reason. SInce I'm unsure of this market anyway I decided to sell it. Good thing too. It was downhill the rest of the day and I managed to get out almost at the highs.

Timing is everything.

And I thought it would feel so much more bullish when that doji on the vix and vxn was confirmed today.

No question who's in control of this market right now. The burden of proof is on the bulls right now, and they just seem weak to me. It's definitely a stockpicker's market on the upside.

That is, of course, if you're going to pick...

wait for it...

wait for it...

here it is...


I expect more downward action as well, but if you are looking for a bull, check out CALP. No options, but it held up well last week and the industry group is heating up.

I'm also:

short- XHB, LEN, GGP, AIG and Q's

long- ROG, EQIX


Thanks for the list. I bought puts on KBH on Friday. Considered CTX and PHM as well, but am hesitant due to my desire to stay diversified. I guess I need to develop a firm rule on % of portfolio tied to one industry....

Eagerly awaiting your watch list, Thanks for all you do at IT and here on the Blog.

EMC is spinning off an IPO tomorrow VM ware symbol VMW http://www.cnbc.com/id/20215432/for/cnbc/ Keep an eye on EMC to go up and the expected price for VMW is between $27.00 - $29.00 Bloggers get familiar with CNBC web page it is very useful for Earnigs, analysis upgrades/downgrades, institutional buying ect.

Question on head and shoulders. VCP, I think is a H&S. If it breaks through the neckline, with volume, is that when you take a trade like that? I am just watching it right now, but am trying to study patterns.


Earnings remember to proof read

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http://www.cnbc.com/id/20076390/for/cnbc/ More info on VMW Read last paragraph!


It got real quiet around here.

Did I miss something?

It must be me. I lurk on this blog all the time. Once I finally contribute, this happens.

My apologies

I do think there are a lot of bloggers on vacation with less time to post as I have been for the last 2 weeks. I also think a number of us have minimal positions or are in all cash so have less to contribute. I promise to be less of a lurker and make more of a contribution as I begin to make money consistently. I really feel I am at that point. I have you and this blog to thank for that. Congrats on the #26 of financial blogs. I try not to stray from this blog but I must admit I go to the Trading Goddess blog just for the pictures. My wife said it was ok!!!

I laughed as I read Garth Trader to my wife. Once again, she thought I was nuts. I do vasilate between enjoying your posts and being glad I never fly Air Canada.....LOL. You should either pursue the short story writing full time or get therapy. Ok, again.....LOL.

Has anyone been stung by a stingray? I got hit in the hand fishing with my youngest. I thought rupturing my Achilles tendon was bad. Holy cow that hurt.

okay, here's a comment:

QOTD: "Never give in! Never give in! Never, never, never, never in no thing great or small, large or petty - never give in except to convictions of honor and good sense." - Winston Churchill


Hey Jeff,

I usually bail after 1:00 PST. I have to squeeze my 8 hour work day into the following 5 hours.

I'm back in most of the home builder trades. Keeping my fingers crossed the fed doesn't come out with a surprise rate decrease if this latest infusion of money doesn't stem the selling.

I can't wait for Friday when we head to Chicago.

Joel R.

I saw the high prices of options and decided to do credit spreads. I'm anticipating approx 25% returns by Friday (if all goes as planned) which is not as sexy as could be but I figured it is in 5 days and I wanted to take advantage of the expensive premiums. Is this a sound strategy? I'm still a newbie!!

I mentioned LVS earlier....C & H potential....WYNN, flagging. Both bullish plays if you dare....

Is anyone seeing a H & S on RIMM with a neckline break @ $215? It retested that level today. Completion of the pattern would bring it right to the opening gap after earnings were reported. Haven't played it yet. Any thoughts?

Don't see that. I'm bullish on RIMM.



Looked at your watch list. Are you on crack posting that?

Glad to have you back. (laughter)


Jeff & Addicts,

I have been absent from the Blog for a few days. Has the location and time of the Addict gathering been decided for Chicago yet? I am going to be there, and want to make sure I don't miss it.

Thank you all,


Jeff once warned me not to do that. It won't happen again. Sorry.


VCP did not confirm as a H & S when it hit the neckline the first time.It bounced and made a higher high. For me, there is no H & S on this stock, the pattern failed.

Looking at the bearish plays. Wow, I wish I would have had more time to look at these this a.m. A lot of them moved quite a bit today.

You crack me up - "Who's taking cruises?" Pardon the pun.


Thanks for the lesson. Got it.
If it had broken, gone down, and come back up to where it is now, that would be a retest, right?


AEM - do you mean if it breaks above 45?
BPHX - what do you see in this one?
It looks okay, but what am I missing?


Mr. M,

You're probably familiar with the basic legend of the phoenix, the mythical bird that lives for 500 years, builds its own funeral pyre, is consumed by the flames, then rises anew from the ashes. This legend supposedly symbolizes the rising and setting of the sun, as well as immortality, resurrection, and life after death.

Like all good myths, it has a number of versions and many layers of interpretation. It appears in ancient Egyptian, Greek, Arabic, and Chinese mythology. American Indians have their version of the phoenix: the thunderbird, who is believed to be a powerful spirit in the form of a bird. Through its work, the earth is watered and vegetation grows, for lightning is believed to flash from its beak, and the beating of its wings is thought to result in the rolling of thunder.

That thunder, Mr. M, is what you are about to witness.

Stay tuned.


Mr M is michelle, I think....

It's me, Michelle. I just got lazy and didn't want to type my name. I don't have an account log-in, so it come up annonymous and I have to type my name after every post.

Very poetic. It doesn't fit my rules, but I thought I was missing some pattern here. I know you've studied them quite extensively, so I am trying to get what I can while I am sitting on the sidlines mostly except for a few plays.

Thanks, Brett, for putting up with my seemingly endless and probably stupid-sounding questions. I was always the one in the classroom with my hand raised, but I learn best that way.

You can call me M, Mr. M or Michelle, but I don't think my husband will like the Mr. (laughter.)

Not sure why it is so quiet around here today but was nice (I think) to be able to read through quicker than normal.

Can someone enlighten me on why the homebuilders and RE are moving up after hours? CTX up nearly $3! AVB up over $3.50 strange...just when I a looking to poke a toe in the water again.

Ok here it is” confession of an addict voyeur”. I stood back and laughed, sneered, anguished, cheered, and traded with you all while you never knew I was lurking in the dusk of your shadow. The time is long past for stepping out into the light. I have feared looking less than intelligent when conversing with such an astute group. But today, I signed up for the 3 day course in Utah. So I have two thoughts coursing through by brain. MUST NOT EMBEARESS JEFF—MUST NOT DEFACE THE GOOD NAME OF THE OPTION ADDICTS. So here I am asking for any words of wisdom that I can get from those of you who have been there before me. The road to Utah so far has seemed like the yellow brick road with goblins gathering in the skies and trees snatching at my profits. I know for certain the wicked witch zapped the green right out of my last 4 trades. I’ve seen the lions and tigers and most recently bears, what I want to see is the path to the Emerald City. Directions anyone?

A want a be addict

c'mon Bob it's so simple....the BPHX goes up the home builders go up....I think you guys need a refresher course......

Seriously the after hours markets have been a bit unreliable lately. Maybe the market rallies in the morning then plummets to new lower lows. It is such a crap shoot these days.

Welcome, PS!
The roadmap to the 3-day:
Show up.
Take lotsa notes.
Ask lotsa questions. The only dumb question is the unasked question.
Prepare for brain melt.
Drink coffee.

Loved your post. Sounds you'll fit right in to the nut house. If you work hard enough, Chris will bestow upon you the esteemed mantle of village idiot - a highly honored rank!

:-) Pat

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Just got back from the three day last week. My brain is still melting and I'm still jittery from the coffee (as mendocino mentioned) but it was really cool. I learned a lot and have a lot more to add to my trading arsenal.


Welcome and you will LOVE Utah. If you have a spare 3 hours I highly recommend climbing Mt. Timpanwhatever. It is an arduous trek but well worth it if not for bragging rights alone. Then when you return from the 3-day and people as what you were doing in Utah you can say with much reverence and metaphor, "I climbed a mountain".

There was a shout-out on BPHX in IBD this morning.

Why don't you create a google or blogger account so you can be non-anon?


Apparently Bill O'Neil has witnessed the rise of THE PHOENIX.

Pretty soon, the fire will be everywhere.

Does anyone see AMX as a possible bearish play?


Looks like a great bullish entry point to me.


Now you guys are going to see just how non-technical I am. How do I do that? Does it cost?


PS- Welcome! My husband and I will be at the three day live on Aug. 23rd. When are you going?

Jeff- Thanks again for the great price patterns class. As of this morning I'm turning off my MACD and Sto indicator and I'm going to watch the price action and volume. (Big girls don't cry...Big girls don't cry....) Anyway thanks for making the topic so easy to understand.



It's free and you can create an account either through Google or Blogger.com (this site). If you scroll to the top of the blog page you'll see at the top right corner a sign in link. Start there and then it will give you the instructions on how to create a profile.

Good luck! Kim


The PHEONIX Breakouts after the open.



i will be in utah aug 26-31,,when are you going?


VM Ware opened up $23.00 a share at $52.00.

HNT - been watching this one. Maybe it's time to jump in? October 50 puts look mightly tasty.

Re VM Ware - how will that impact holders of EMC?

Any insight on our beloved Google?


I'm with you, Arty! Google, the thorn in my side.

Clean Cups and a WATCH LIST.

I will be in Utah in the 3 day, 30, 31, 1.

Maybe we can meet on the overlap day.


Arty,,,email me spgrlg@yahoo.com



Until GOOG closes below $500, I am still in the trade.

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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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