First!

I know that isn't constructive at all, but I can't watch the video until I leave work :-(

Ben

Also wanted to say thanks Jeff for putting IBM on my radar, took that trade and so far is working out nicely. I took down some Nov 120's.

Also grabbed some Nov 320's on BIDU with the line at 300.

Possibly looking to go long SHLD.

Wondering people's thoughts on FSLR, is 130 a good line since it seems to be holding up there the past couple days? I was hoping for a pull back closer to 120 but it seems to be up and up now.

thanks, I love this blog.

Ben

Krystal,
Trading is more of an artform than a science. Once you have your rules in place... play by the rules. There will be times (like GRMN) that it just doesn't work out. It's OK. Take the loss (400) and learn from it. The reason it was only a 400 loss was you got in at the right time and were overcome by news you couldn't predict. I got out of GRMN this morning and sold my call for 3.90 Right now it's trading at $1.90. Could have been a LOT worse. I consider this one of my most successful failures. I actually feel good about it because I got out when I should have. End of story.

There will be other times that it goes the other way. You'll wake up one day and have one that gaps up 200% and you will bask in your glory! Stuff happens. Move on to the next winner.

My oh my. BIDU up another $20 today. Nice trade folks. Wish I was in it.

Jeff thanks so much for the video. It's awesome... really worth the esxtra time! They're all going in my JK Watchlist and will be actioned this afternoon if appropriate.

Sarah,

Thanks for putting things in perspective. Those were in fact "false gains," weren't they?...

I've got my eye on NILE today to see how it will close.

Krystal

Chris & Catherine,

Thanks you guys. I don't take it lightly that you chose to provide some kind words of encouragement.

It's interesting that you are saying the same thing that Sarah said....that it was a $400 loss, not an $1100 loss. Thanks for the insight.

I also find it interesting that Jeff chose to exit yesterday... years of experience telling him that the game was different, the trade was not the same trade he got into originally. This was actually a great learning experience...but did it HAVE to cost $400! LOL!

Krystal

Krystal

Ben

I know the pain because my work also blocks it.

I asked my friend to come to the site, save the video as "file.doc", amd then email it to me. Once I got it, I just rename it to the video format.

maybe you can try the same.

Mimosa

Krystal,
One of my best learning experiences cost me $25,000 back in Feb. It was... duhn duhn duhhhhh... Feb 27. I learned so much from that. Including that you can bounce back from it. Really the only lesson you need to take from GRMN is that you got in at REE and got out at your exit point.

Jeff, I won't EVER think of double bottoms in the same way. I just want to know how you got a sound clip from Raimo's hunting tent. Nice job. My JK watchlist is full. What an awesome list of stocks to watch!!! Thanks.

PS I am now going out for a Montreal Smoked Meat sandwich.

Yeah, it was childish, I know.

My bad.

Jeff-
Childish, yes. But funny? You bet ya!

WARNING!!WARNING!! If you are planning on listening to Jeff's watch list at work I'd watch your volume level unless you want some embarrassing accusations flying your way!

Kim

Chris & Catherine,

Wow! $25k! I'm down in my account (not by that much, but enough that I've shed a few tears!).

And you're still here? You bounced back? You're still going strong? Wow! That's an encouragement to me! That was nice of you to share that with me...not saying that I'm finding joy in your loss, but rather in your subsequent triumph. Phenomenol! Do you mind if I ask, why didn't you quit after that, just walk away?

Now, I haven't had Advanced Technicals, so I'm not too familiar with these so-called "Bull Flags" discussed on the blog. I guess I can see how Jeff is defining them in the video... Is it just a series of down days that fit within a channel?... And if so, is there one on NILE? Do I have to wait for a breakout before I define it as a bull flag instead of a support bounce? Hmmmm...

Any pro advice for a rookie? Can someone enlighten me? (I studied the "Triangles" archive on the blog, but didn't see on one flags...)

Krystal

Kim,

Now that you brought that to my attention, I will remember that for the next video.

My goal will be to embarass OA's at work across the globe.

Beware.

Kim
Very crafty the way you are hiding that glass of red wine up against your wine colored dress. Only a sharp guy like me would notice that. And don't tell me it's to put the flowers in. Catherine and I owned a flower shop for 12 years and not ONCE did the flowers go in a glass of wine.

Krystal,

Here is a decent one...
http://optionaddict.blogspot.com/2006/11/ffiv-analysis.html

Also, you gotta try my search on the right hand column. You can learn anything you want to at the click of a mouse.

Krystal,
The only reason I'm still here is the people on the blog. Brett in particular back then was like a father to me (only younger.) He's got stories that would grow hair on your back. Oh wait!!! It already did. Believe me I was really, really down, but this community helped pull me through. And within 6 months I was up the $25,000 and then some. I didn't walk away because I love trading and with all the support here I know I can't help but do well. We are truly blessed.

Yes, flags are formed by a pole (one or a few strong up days) followed by the waving flag (many down days) and once the flag part is broken, you can look for the stock to rise about the same amount as the size of the pole. Whatever you do... don't as Raimo to explain it. He can't keep a straight face when talking about poles.

Can we talk about LAMR? It had that news and gapped up quite a bit but, so far, it is not holding. I guess we'll see what happens after lunch.

But here again, perfect example of me following my rules, drawing lines, taking a good entry, showing a profit and BAM! news bite me in the butt.

I don't really feel that the volume today is significant enough to hold up the gap in price and it has been downtrending since May.

Should I factor in the fact that earnings didn't hold it up either.

Gah!

Jeff, you've outdone yourself yet again! I have been "licking my wounds" from the big GRMN loss. With this new material, I will go through and study the list and see if I can get into a couple of good trades that will help make up for the "lost trade."
Off to study!
KELLY

Jeff,

Thanks for the link...I am definitely a visual learner!

Chris & Catherine,

Thanks for the explanation. That makes it very clear! I'm with you as far as the reasons why I won't walk away...Even though my losses have exceeded my gains, I LOVE THIS STUFF! I LOVE TRADING! I enjoy charting, figuring out reward/risk, and all of that! I'm a bit of a fanatic!

I also agree that the support of the people on this blog is invaluable to me. I can't overstate that enough.

It's a great blog, isn't it?

Jeff, Thanks so much for your work on the new list (with sound clip or was it you...).

I'm leaving the blog for a bit. I'm gonna get on that list like ticks on a dog and suck some money from the market.

--Patti

Chris,

I appreciate you sharing that story, I have a similar situation, however sadly I lost about double going from up 100% to down 50%. However, I feel like every trade is an opportunity to make it back, I took a decent loss in the beginning of my trading as well and came back from that so after this big loss, I know I can get back to where I was and above by learning and trading better.

I also try and keep things in perspective, I definitely am lucky to even be in the position to have a decent account to trade with, some may not, which is why I don't necessarily like putting numbers out there. But most I know have lots of debt and no savings vs me being able to trade an account.

What those losses has made me do is re-think my whole strategy which I have done and changed fairly quickly and I am very proud of that, sure more risk may be exciting, but it also introduces emotion and the whole point is to be able to keep trading because if you are smart and have an edge in the long run you will be profitable and i have already seen that in my short time having changed.

Last night I wrote down my specific rules, almost all I got from here, but slightly more tailored to me with reminders. I'll post it in case it helps someone else.

1. Plan the trade, trade the plan. Determine entry point, exit point, price target and time needed before entering the trade.

2. Be patient, wait for low risk entry points, these higher probability trades will be worth waiting for.

3. Only risk 1-2% capital per trade(as account grows position size will naturally grow as well).

4. There will always be more opportunities, if a trade is missed wait for another entry point or better trade altogether.

5. Take trades that are the logical easy money, that you have conviction about.

6. Do NOT trade in the first hour unless absolutely necessary.

7. Do not put on a full position unless it is a very low risk entry point and risk is clearly defined.

8. The trend is your friend, do not go against it unless a pattern confirms reversal.

9. Cut losses short when confirming break of support, let winners run unless chart or news of company says otherwise.

10. Trade(in general unless situation determines otherwise) one strike out of the money options with appropriate time for target.

I plan on posting this on the wall next to my monitors just as a constant reminder on what works and what smart trading is in case I feel like getting riskier than I should.

sorry that was long.

Ben

Jeff,

Thanks again for all the great ideas.
I was going to ask who the recording artist was for the double bottom but Chris cleared that up. It makes sense because that truly sounded like a bad reaction to Venison.
As for the sound bite for the triple bottom, you may want to contact Chris after his Montreal Smoked Meat Sandwich. Just my $.02.

Ben-

Great post! Thanks for putting into words what I've been working on for months now. It's been hammered endlessly here to trade your rules. For so long I've had them rolling around in my head, but have never got 'round to writing them down. These rules pretty much mirror the way I trade. Now that I see this in print, it really brings it home. Thanks!

Ben,
If I recall correctly, you indicated you are a college student... I have to say, very impressive....

I just had the discussion with someone recently that I wish "Trading" was something that I could have majored in when I was in college. Wouldn't it be awesome to have those 4 years to devote to learning this stuff??

Jeff--I think you could start something along those lines! If I were going to school now and had the choice of how to spend the tuition money, I would be going to JK's School of Trading!

Jeff and all,
I'm new to the blog, but I've learned a ton already, mainly about the psychology of trading. I took big losses when starting trading last year, and thought I was the only one who ever went through that agony. Without a strict group of rules you follow religiously, you're done. I still struggle with stuff, mainly when to exit properly and maximize profits, but I guess we all fight with that. Anyway, you guys provide a lot of great info, as well as support.
Jeff, the watchlists are worth their weight in gold. I've been on a million sites, but this one blows them all away. Thanks.
Mark

Somebody posted about adding or entering the GLD position. I saw it as a good place to add today at 72ish.

AMZN, either a good time to enter or a good time to exit.

Michelle

Lisa,
I love, love, LOVE your idea. Just think of all the money that's being spent on degrees at Universities, that mean absolutely nothing. I think Jeff should post his bank account number and we'll just deposit my oldest daughter's university money directly in there, and we'll send her off to Nevada for four years. Just make sure she come's back a better trader than I am, OK Jeff?

Michelle, you're right about AMZN. With earings coming out in three weeks, I'd say it's more likely time to get out. It's hit it's head on 95, and can't get up.

Sean... have you seen Dumb and Dumber? If so, all I have to mention in the bathroom scene and you'll know what a triple bottom sounds like.

'Nuff said.

Ben, I know what you mean about putting numbers out there. The cool thing is that with only $4,000 on the table this past three weeks I have $4,000 in profits (well.... I did. Until yesterday, when GRMN and VFC removed close to 1300 of that.) I have proven to myself... and hopefully others... that you don't need trade big dollars to make big profits. I am now ready to get back in all the way, and I'm feeling really, really good about where my head is.

By the way... this could be a great time to add to VFC. It's holding it's own nicely today.

Hey Jeff:

Thank you very much for the video.

Another winner that you had last time was WHQ and it looks like it may bounce here.

I took LDK yesterday, but it still offers a good entry here

Chris,
I took profits on one contract, but am still keeping a few open on AMZN. It's right on its diaganol trend line. Today or tomorrow should verify if it continues its trend upwards or breaks down. I am going to hold and watch. I have Novembers anyway.

Michelle

Thanks Matt, glad it helped someone!

Lisa, Yea I am in my last year of college. Again, some are not as fortunate, I am trying to take advantage of the fact I am in school currently, I took night classes specifically to be able to watch the market during the day, haha and of course read this blog ;-)

Chris, yea that is very impressive, I was similar, luckily sold out of GRMN close to 120.

I think what many people need to think about when they are down about GRMN is again probabilities. That is all we should care about, the fact is, the probability that a stock you are in suddenly drops 10% is extremely rare and should not really get you down because it was pretty much a rare event.

I also don't look at me getting out of GRMN as any more than luck, it did get to my target, but the reason was i had 0ctober calls, if I had by some chance had Nov, I would have been in the same boat.

Everyone here is on the road to success in my opinion if you can adopt the teachings of Jeff and others, all losses are temporary. :-D

Ben

Ben,

Great post...errr, posts!

:)

Krystal

Ben,
Fantastic post. One of your rules is trading one strike out of the money options. Any reason why specifically one strike out?. I find myself going more by Vol / OI, and Delta. Thanks.
Mark

Laney-

I think it was you who asked about LAMR. I got stopped out this morning with the gap up which was in accordance with my trading plan. It broke through both my diagonal and horizontal resistance significantly. I do like that it is not holding this gap in the afternoon. It is still on my watch list.

I really need some actionable puts. I'm too bullish after getting stopped out of puts that are rising with the tide.

Chris- hide wine? The only place I'm hiding wine is in my belly! I was in a wedding at a winery recently. Boy was I in my element!

Thanks Krystal!

Mark,

I used to try and determine how high I thought a stock was going and choose an option right at that strike price, which could very well be 4 strikes out, this allowed me to buy many more contracts but after my basically good fortune of being in apple from may to july and having that work, as the market changed I found my options basically fighting time decay and volatility decay so it wasn't really paying off unless there was a very large short term movement.

So instead of going way out of the money, I decided it would be much safer to go closer to the current price, so that if it moves like I expect, I will gain a lot of intrinsic value, it will be basically immune to IV movement and the delta will be larger to begin with.

another reason was position size, closer to the money was generally more expensive which made me buy less(more conservative). Lets say I have my risk limited to one dollar and if that gets me out I assume my option will have gone down .50, i then should buy at most 5 contracts if my account is 25,000 because that puts my risk at only 2%.

I'll give you a real example that just happened. GRMN, I bought 110 calls which was one strike out. when that falls back from 120-108, most of that was intrinsic value and I lost mostly profit and got close to my original risk.

Had I bought 120 calls, I would have felt great about it when it is at 120, but when it reverses, I have no intrinsic value, so I lose likely everything, and if that was more than 500 dollars worth of options, then I lost much more than I had originally planned.

Sorry that was long again, hopefully that was helpful if I am wrong on any of that hopefully the experts will assist.

Ben

Raimo,

What's up with OI? Good movement today, but WHERE is the volume? My warm fuzzies are fast fading away...

Krystal

Jeff....thanks for the watchlist!!!
ps. that was the gas that i warned the coach about, ha...

I find myself excited to trade various positions but stop beacause earnings season is approaching and I have no intention of holding NOV paper over earnings. Isn't it a bad time to buy Oct paper with only 2 1/2 weeks to expiration?

I guess I should learn how to play spreads closer to earnings time.

Anybody else have a stategy ?

Kim,
That was me, about LAMR. I have decided to stay, with a hard stop before the close.

It can't stay up, even with the volume and news. Plus, in a reversal period, it's going down. I may regret it, but that's a pretty strong down trend.

NILE: slowly climbing back up.

Jeff, thanks for the List.
I wanted to take SOHU this morning but was trying to stick to my rules.... and i missed it this afternoon when it took off.... Oh well, I'll wait for the next one.

Kim, I too am looking for actionable bearish plays. I got stopped out of LAMR like everyone else, along with AKAM today. They'll stay on my list.

So many bullish potential entries today. I'd love to enter all of them (like LVS), but I am holding my maximum positions my rules entail.

I like the entry on GME today as well.

happy trading to all.

-Kevin

My fuc@#$Ng cable has been down for the past few hours, finally back online..Jeeeesh..

Krystal..

I would like nothing better than to give you back your warm fuzzies..I'll try....

If you remember when I took down OI, it was at REE, within a pattern..approaching resistance, which I am of course anticipating it to break out of. So, we need to exercise patience here...and follow the plan..whatever yours was. When it breaks out, warm fuzzies..

As for not allowing emotion to affect trades, screw that, GRMN fucked me good and I am pissed. Thats TWO bad trades for me, GRMN, and ICE, which clearly ICED me...

There, said it, got it out of my system, sorry for the explicative...ban me if you must...

Piece of crap that GRMN is...

Laney- I don't think you'll be disappointed on LAMR. The only other prospect I thought of on the trade was institutional buyers having to leg into the security because of the need to realign their portfolios. But this would only hold true for those that are mirroring the S&P Midcap so I think I'm out to lunch with this theory as well.

I'm am very concerned about being too bullish right now.

Kim

Raimo, IMO swearing is fine when warranted, but of course it is not my blog.

In the future, may I suggest abbreviations, such as "I got F'd in the A!"

Don't worry, I am sure you will be getting "loved" by some other stocks shortly and you'll forget that GRMN whore.

not trying to make fun of a loss, just keeping it humorous.

Ben

Raimo,

we would NEVER ban you!!!swear away

Raimo,

That is so frustrating that your cable was down, huh?!?

My plan with OI was (worse case) to play the bounce and if it started to turn over from that 1998 potential resistance, take profits (as little as they may be). Of course, I would prefer the breakout.......contemplating if I want to take my small profit off the table. I don't think I will because even though the volume is not high, the trade is still not wrong.

As for GRMN, it sucks. We waited patiently for this trade, got in at REE, waited day in and day out while it piddled around old resistance forever and a day, and when it finally broke out, it turned right back around and bit us in the honkus...us, the loyal ones! Grrrr...

Stay tuned for more venting later in the week if OI does the same...

Krystal :)

BTW, Jeff, that search tool IS awesome!

Kevin- I also got stopped out of AKAM.

Raimo- If I have you pegged right you're not one for group hugs. So...how about a nice Rocky Balboa sized slab of meat to punch into?

Da Da Da Da, DaDa Da DaDa Da....

Kim

Kim and Laney,
I was in LAMR for a while and had the same dumb (and dumber) luck that Ben did with GRMN. I had Oct paper and it reached my target of 47.50 so... like my favourite mosquito... I pulled out. I expected another pull up and would have gotten back in if it had done it in an orderly fashion. Not this time, though.

Raimo, nice to have you back. I was afraid after the sound clip of Jeff's double bottom that you may have blown yourself up in your tent. Didn't know if you were a smoker or not. Just a little side note, here. If you're looking to pass on some warm fuzzies to the nobler sex... I'd pass on talking about your #%**@ cable and F@$%& GRMN. You're setting the wrong mood.

Sheesh. Absolutely everything I bought today is down. Some more than others. IBM was looking really nice but it's down a bit now. An even better entry than it was an hour ago.

Damn is anyone seeing BIDU? I guess I am glad I got in. I am curious also how much of that is short covering. Either way I hope it continues.

Ben

Jeff,

Thanks for the watchlist. It is greatly appreciated; as is your time and knowledge.

Brett, Raimo, Chris, et al,

Your input is invaluable. Thank you for your time. I learn so much from you.

Raimo,

Please define REE and your other acronyms if you don't mind. I am sure there are other new members that could benefit as well. Thanks.

Ann

A question to all the Option Addicts, what percent of your portfolio do you keep in cash at all times? Or do you put all your capital to work?

right now I have about 33% in cash, but to me that seems like too much at this point.

what say OA?

Ben

Ben,
Thanks very much. I've both benefited and been burned buying way out of the money (more burned), and I recently have tried buying mostly ATM, because of higher deltas. What you say makes a lot of sense - just checking some chains, you get a lot more bang for your buck, and don't lose that much delta in most cases. Besides, if the stock moves you'll be ITM in short order, which I guess is your point. Thanks again.
Mark

Ben,

I'm sure you'll get the generic answer of "How much you keep in cash depends on you and your trading rules" from others, but I'll tell you what I do personally. Hey, you asked, right?! :) Besides, I take it that you already know that we all have different trading styles... and that's precisely why you're curious, isn't it? :)

For me, it depends on the market climate. When we were going through all those whipsaws recently, I scaled back. Now that we seem to be steering a more steady course, I have much of my account at work.

Just my 2cents.

Krystal

Ann,

REE--Raimo's Entry Exit
RTR--Raimo's Target Reached
RPRA--Raimo's Portfolio Risk Analysis (I think this was the most recent one).

Figured I would save him some typing today....

Ben,
I'm really impressed at what you're accomplishing here while at college. Nice, nice call on BIDU. I was thinking it'd pull back a bit more before taking off. Don't follow what I do... by any stretch... but I keep my cash position comensurate with what's going on in the market. If you've got yourself covered (ie calls AND puts) there's nothing wrong with being 100% invested. But for the last month, I've had only about 15% in stocks. I just wasn't comfortable with what the market was doing or with the amount of time I could spend at the computer. Obviously I would have done a lot better if I'd been "all in" the last week or so... but tuff nooggies (as I like to say.)

Can someone assist me with opening the video please? I am getting an error that reads "This file may not play correctly because it was compressed by using a codec that is not supported". I have no clue what that means. I am on a Mac if it makes a difference. Thanks in advance:)
Stephen

Is anyone looking at TIN? I love it as a put and it's right at REE but I'm a little concerned that the last low was higher than the previous one. I'm desperate for a good put and this one looks nice except for that. Well... that and the fact that it's had 5 pretty good up days.

I've got to head out to the airport and transport a bunch of bleary eyed patrons to Vancouver BC... then to Victoria.

Chris & Catherine, Sarah, Ben, Jeff, and all other OA's,

I want to thank you for all your support on the blog today. When I exited GRMN earlier today with a loss, my first impulse was the classic "Just close out all your positions and start all over! God!" But when I reached out to you all, you told me to curb my emotion and get back in the swing of things! Tough love, right? I like it!

Anyway, when I was upset earlier over GRMN, I was close to closing out my NILE trade with yet another loss. Emotion, of course. But now that I'm looking at the price action toward the close, I'm glad that I didn't. Instead of posting a loss for the day (which is what it would have been if I'd closed the position when I was emotional), I'm up a little on the day! Boy what a difference a few hours makes...and boy what a difference you wonderful OA's make!

Much appreciated, you guys...much appreciated!

Krystal

Boy it sure feels like everyone is trying to find the downtrending stocks that haven't made a move up yet. AKAM has just run off to the races this afternoon.

Makes me wonder if PFCB is next.

Ben,
I keep 50% of my portfolio in cash, but I am a lot older than you. TOS gave me a higher interest rate just by calling them and requesting more. My TD Ameritrade account pays decent interest on the cash. My goal is to consistently, year after year, get a return on total account of 20%. I don't feel chained to the computer everyday during market hours, and for several hours in the evening too. That sort of happened when I first started.
Hopes this helps.

Anyone else have trouble getting the video to play? I am on internet exployer and have never had a problem before. Any suggestions would be helpful.

Diana

Jeff,
I have not read the Blog nor do I have time right now but I must say.

You want to talk childish, my bad decisions on GRMN. The trade broke down and I bought more. What an ASS I am. The trade broke down, i should have just got pout instead of mailing boatloads of cash to the shorts in GRMN this morning.

I am sorry you Jeff, the Blog, and all of the people of the world for trying to make up rules so I could stay in GRMN.

I FEEL SHAME!

ART

Diana,

The video played fine for me, but that happened to me before and I just right-clicked on it and opened it up in another window (Media Player).

Maybe you could try that? :)

Krystal

Guys,

based on recent bearish trades, I think I want to stay away from put plays for now. The trend is just too strong.

I had bearish positions recently in SHLD, LAMR, AKAM, AZO and they are failed.

My calls are working although I am still finding better luck doing short term swing trades then trend trades so I am for now going to stick to them.

Hope yours are doing better.

keep an eye on ILMN a strong close over resistance warrants attention

Mahmood,

Amen to that!

Very few of my puts worked out, too. AZO, ESI, X, KIM, PSA,...the list goes on, and on, and on...

sigh...

Krystal :)

GO NILE, GO!!!

Art,

Next time I will pund the table harder. You'll get it back my friend.

For those having issues with the vid, try my page at youtube. There is a link on the lower right column.

DE dropped back a couple of bucks to a recent support. I got Nov. 145 calls at $9.30.
Stan

Aww, Arty and Raimo. You're human, it happens. We still love you both.



HOLY CRAPOLA! I was down over 40% on NILE at 9:30 and now I am up 8%. Here's to sticking to the "trade at the end of the day" rule.

Ben,

You are amazing to be going to school and trading. I wish you all the success in the world. Also, thanks for your list of rules and other words of wisdom.

To all of the rest of you who were recently beaten down by a trade,

I have been there too many times. But, I'm am attempting to learn the ways of IT and experienced traders, like Jeff, Brett, Raimo, Sue and others (I've come to realize there are many of you), of course adapting certain principles to my own style so that in the future (sooner than later) I, too will make fewer and fewer mistakes. That said, I would encourage all of you to persevere, continue to learn as much as you can and apply your knowledge to your trades.

VeroBarbara

Krystal and Mahmood-

I want to caution you about going put-less. I agree the trend seems to be very bullish right now. I've gotten booted out of the same bearish plays. However, you're leaving yourself wide open for big losses if the market decides to correct as a whole.

If you're getting stopped out of them your losses should be small which is more than made up for when your bulls are running. I'm not saying you need to be 50/50, but some exposure is vital.

MDC--a home builder. Why is MDC up? I know some home builders were upgraded, but everything i am reading sayd that MDC was downgraded.

I would have thought MDC was going to head further south, but it has climbed ~ 10% in the last two days.

Any Thoughts?

Blake,

More buyers than sellers.

Every homebuilder is up.

Jeff-If you were sitting next to me I'd be hitting you right now. Smarta$$
;-}

Hey all you OAers,

My heart goes out to all the GRMN peeps. I played it too a while back when it was gapping every other day. No fun, but it sounds like most everyone came out with a defined risk in tack. Finally out of AZO yesterday morning and good riddance. Used the funds to get long some NOV "paypa" in QMAR & SNDA. Good entry in SNDA still.

Also liking the inside day diagonal trendline bounce in FCX. Not liking the fact that I turned old Mastercard (MA) puts into a long calendar spread. Anyone else do this with put/call trades gone wild?

Ryan in SF
aka: The "Just charge it, Honey" Guy

Blake,

On MDC, maybe some zealous buyers are out there trying to pick bottoms...?

Krystal

VA Beach Girl,

I appreciate your sharing some insight on going put-less as you call it :). Ha ha.

I've only been trading since June, so I enjoy hearing about other people's take on trading.

How long have you been trading? Has it happened to you where you've gone put-less and regretted it? Are you in a couple of puts now, just as kinda like an insurance type thing (and also because you're bearish the stock)?

I'm always interested to learn from the experiences of others who have gone before me. What say you?...

Krystal

VA Beach Girl,

P.S. Jeff is a little smart alec, isn't he!?

Mr. Kohler ... Double bottoms will NEVER be the same for this OA ... Your increased production abilities were enjoyable :) I was already in several of your watchlist stocks ... Makes me feel like I may be making progress on picking good patterns these days .. Hope so!

David - thanks for your 'one liner - to the point look at this' posts .... Always good stuff .. i.e. LDK and ILMN ..THANKS!

BUCY - I am not a big divergance player but for those that are, BUCY is looking a little toppy and could be setting up to confirm a lower high. The MACD & STO are divergent of the recent upward price action and the volume has fallen on the recent up days and heavier on the down days. There was a similar condition back in July at the highs. Possible entry at confirmation below $71ish with a target of $62.50 and then some.

Or it could be a cup and handle and headed to the stars... go figure.

Ryan in SF
aka: Da Boo-Cee Boy

Addicts,

Thank you for the warm words yesterday. They meant a lot to me. I do want to present something that I think the blog will find educational. This stock is a price patterns class all to itself:

Check out COGT.

On the 5-year: You will notice a steep selloff with an inverse head and shoulders reversal pattern. Target is measured from $10 to $15, putting the target at $20. What is $20 on the chart? A prior support level. Cool huh? Keep reading.

On the 6-month: You will notice an ascending triangle with volume confirming on the up days. The breakout is over the $15.50 level.

On the 3-month: You'll see the breakout clearly and you'll notice it turn into a flag, with a breakout today.

**Extra credit: Had you spotted the breakout and missed it (as I had), you would have waited for a retest, which came yesterday. As a bonus, that entry yesterday puts you in at a safe level and you actually got a jump on the flag break that occurred today.

Anyway, I hope someone finds this analysis useful. My account does so far!

Again, thanks for everything yesterday. this is really a cool place to hang out.

Yeah I got bit in the rear by GRMN again today too. I did manage to make about half the losses back day trading the ups and downs. I bought puts after it went under 105 and calls after it bounced up at 100. Then I went kind of back and forth with them today. I am NOT a daytrader, but it worked pretty well today (almost every attempt) because they were big runs up and down (mostly down).

Heck I may even jump back in tomorrow, if the stock stays up over $100 after the first hour.

I got into DAKT (again), MLM, and LVS today. Its good to see BCSI and ELON doing well again - glad I held those two. And I second what Raimo said about GRMN.

James H.

VA beach Girl,

I do still have couple of put plays like RL and CNA. but recent experience was not good. Although most of those puts in SHLD, AZO and LAMR were all in profit based on good entry but I think in trying to wait for the target to be reached I lost the profit. I should have just traded them like swing trades and exited on first sign of weakness. LAMR was a news event so I could not do anything about it just like GRMN.

Thank god for money managment otherwise I would be hurting right now.

Brett ....

The above - spot-on analysis - is just another reason why you are so important around here ... To have your 'down' day yesterday ..you sure came back today with a 'brilliant' stroke with COGT .. Wasn't even on my watchlist .. It was a Patterns Class On a Stock ... .THANKS!

Brett,

Thank you. That was a great walkthrough your thought process. I was wondering where you were today.

Chris, thanks for the Dumb and Dumber visual. I think I will no longer trade any pattern that ends in bottom. I have you and Jeff to thank for that! Thank God we all don't look to trade quadruple bottoms.

Brett,

Wow! So that's some of what you were doing all day. Glad to have you back. You bring a lot of value to this blog. I see the inverse H&S. Do these things ever retest support twice?

VeroBarbara

Thanks, Brett.
I plan on studying that stock and your analysis and listening to Jeff's price patterns class.

Glad you're back and going strong today.

Michelle

Wow, thanks very much for all the kind words everyone. Also thanks for the feedback on cash levels, that is insightful.

Sorry I kind of disappeared, the 3 hours of sleep caught up to me and I was fortunate to be making money so I decided to take a little nap.

I have to say thanks to all of you here on the blog. I hope at some point I can return what I have been learning and will be a resource to ask similar to Jeff, Brett, Raimo and others.

I honestly feel like this blog and what Jeff does and Eric really gives us a great advantage, me specifically because I don't have the stock screening ability like Jeff, plus we all are looking out for each other.

I feel so much better perpared and great about every trade and a lot of that credit is due here, so thanks again!

hope most did ok, if not, remember there is always tomorrow.

Ben

I missed a whole day of action. My cable was just restored a while ago, nearly two hours after the close. Guess I'll short comcast....

Dog days of trading...

Fu@#$ing cable...

I'll take the group hug..

Raimo - {{{HUG}}}
Brett - I love the way you always come up with these interesting setups that I would never find on my own. Thank you!

Spent a nice day at the beach and the Science Explorium away from computers and trading. Came home to find I am stopped out of LAMR. I'm down to only RESP calls and some stock on DSX and TRAK.

This has been an expensive week off but I hope to make it back next week. With interest!

Brett-

Thanks so much for the analysis of COGT. I have a question though...

On the 5 year chart, was the inverse H&S starting around 12/13/04 with the head at 5/23/05 and the last shoulder finishing up around 10/24/05? Wouldn't the $10-$15 target start from the end of the last completed shoulder and put you down to around $15 to $10 on the chart (7/31/06 - 2/20/07).

Long way of saying I don't understand how $20 was the target after the inverse head & shoulders. Maybe I'm looking at something different?

I appreciate all the OA's comments. I don't post very often but do read just about everything you guys say and am learning more than you know. Thanks again!

Lara,
I see the left shoulder forming around August through October 2006 around the $15 level, the head formed early 2007 around the $10 level, then the right shoulder from May through July 2007 at the $10 level. Price target measured from head to neckline ($10 to $15--5 point move) gives you a target of $20 when projecting from the break of the neckline.

Brett--please correct me if I'm wrong! And thanks for the walk through. Great example.

Krystal,

I will always have bearish plays in my account. The overall percentage will vary as the market climate dictates. Because the market is so bullish right now I'm only taking the weakest of the weak and even most of those are turning against me.

My advice would be to look at the 1 year chart for all of your current bullish plays and specifically look at Feb. 27th for each to determine what your bullish plays would have done on that day. Now imagine not having any bearish plays to support the losses as the market tanked.

Now imagine not having your trade planned from start to finish and watching in horror, paralyzed because you didn't know what to do.

That was a reality. But no more thanks to IT, everyone on the blog, and my own persistance. My one year trade anniversary is Nov.8, 2006. It's amazing to see how far I've come. It's amazing to see how far many people on this blog have come.

Now if someone could help me stop dreaming about the market while I'm sleeping....? Jeff, it's time for some OA pajamas.

Hope this helps, Kim

LisaG-

Thanks for the explanation. I hate to say it but I just wasn't seeing it..... I walked away for a bit and came back and I think I can make it out.

What I was describing wouldn't have made sense anyway. Oops.

I did follow the rest so I'll be curious to see how it pans out.

Thanks for your help!
Lara

$OIX.
C&H forming. Huge move potential.
Thanks

any thoughts on adding to DE here??? my oct option will be expiring soon. i see $147ish as my exit, so if it closes below i will close the oct trade, but i think it still has potential, i got in around $135 and it just keeps chugging higher, i am thinking about getting back in on a bounce for nov.......any thoughts/comments?

$OIX...I forgot

(courtesy of Ladd)

:)

take a look at BCSI...setting up a nice ascend triangle w/ a $20 price target.....i traded the last bounce from 72.50 to 87.50 (thanks to Jeff and Brett), it likes to move....

Hey guys,
I'm new here and see some talk about NILE.

Based on the last 2 trading days, there is an obvious support at about $93. My question is for a swing trade, where is an ideal entry point?
Does one need to wait for a break of the previous day high OR wait till near the close to confirm it can CLOSE above previous day high for entry?

Such topics maybe discussed before, but would be most happy if someone can direct me around here...there's a whole lot of good materials here, I don't know where to start with! :)

Thanks,
Jon

Jon,

Real quick before I go to bed... :)

I've identified old resistance/new support on NILE at about $95. If it closes too much below that, I'm out! If you're trading this as a breakout, first define where YOU see old resistance/new support, and try to get in as close to that line as possible. That gives you an ideal point at which to manage risk. Then, set your price target.

In other words, plan your trade, and trade your plan! :)

With my line in the sand at $95, if it CLOSES 1% below that, I'm gone.

Whether or not you wait for a break of the previous day's high or you wait for the close to contemplate entry is totally up to you. I've heard many pro's say that they do indeed do much of their trading in the last hour of the day...just follow whatever is in your trading rules. For me personally, I place more emphasis on closing prices than intraday swings, but that's just me.

You'll probably see a few of us discussing NILE (and other positions) tomorrow. You mentioned that you don't know where to start on the blog... go to the archives (on the right hand side of the page)! They are a treasure chest of information!

Hope to see you here tomorrow!

Krystal

Hey Boys & Girls of the Option Addict Blog-

I've been in computer hell for the last few days. Thankfully I was able to get out of GRMN yesterday before my computer decided that it didn't want to work any more.

Kim-
You keep changing your picture! I can't keep up.

Jeff-
There were so many great set ups on the watchlist. Really liked LVS & ODP or was that OPD... Anyway, great stuff. And I'm sorry that you didn't make the team. But you made a great marketcast.

Brett-
I loved your analysis earlier today. Very cool. Thanks for sharing.

liz

Thanks Krystal.

I do struggle with having an aggressive entry (trying to get in close to support or on break of high) vs waiting for confirmation (towards day end). The dilemma is that being aggressive means you sometimes can faked out, but waiting for confirmation also means that the stock sometimes fly off too far for entry. I would appreciate the experts here give me some advise on this or share their experience. Thanks!

Jon

EXM got hammered after hours on the news that it announced its intention to offer, subject to market and other conditions, approximately $100,000,000 aggregate principal amount of Convertible Senior Notes. I don’t know enough about what exactly that means. I know, I know, after hours price movement isn’t always indicative of the outcome. Tomorrow the market reaction will be our guide.

Yesterday it was LAMR and the addition to the S & P 400. Today confirmed the after hours price action until late in the day. Since I was positioned to lose my entire premium, with all day pull back (big in the last hour) I stayed in the trade. The descending triangle trade may be broken, my THICK line was drawn at $49.50. The overall down trend is not broken, if today’s close is a new high, the trend is still lower highs and lower lows. If it goes up, I salvage something when I expected to lose the entire premium.

Good night and good morning.

Oh, GO YANKEES!

Hey Logan

How's the house going? I just pulled into Victoria and have to get to bed... market opens in... T-minus 5 hours and counting. I haven't looked at my accounts yet, but I expect mediocre results in the options as most stuff I bought today was all over the place (much like me.)

Tomorrow (or today... depending on when you're reading this) is another day.

Anyone looking for another good call... NOV is like PCP was in the spring. Bullet proof. Not like BPHX though.

Anyone brave (or stupid) enough to stay in LAMR looks like they will be rewarded. It's down 1.34 in after hours. I think it could end up being a fantastic REE on a strong put.

Talk to me in the morning.

Logan, I added to LAMR yesterday so kudos to you staying patient and not bailing.

Chris, what IS like THE PHOENIX?? It's in a class of its own.

By the way, i neglected to mention that during the hooplah of the last few days I broke my second Option Addicts mug. I ordered TWO more this time. Jeff, I hope I'm keeping your shipping department busy.

Jon,

NILE

I read your post/question about NILE, and have been following the talk about it. Very interesting how we all see different things.


I use REE, at a support or resistance level, to get in. I pull up the 9 month on NILE, and there is obvious support to ME in two spots. First, an obvious diag trendline that the current price is about $12 away from. Obvious HZ support at $75. I throw 93 and 95 out the window personally. I need MULTIPLE points of contact for a SOLID trendline. Right now, $95 is nothing more than an old high, and I see nothing at $93. This is what I SEE. If I got in now, I feel like I would simply be chasing the trade. But again, my rules, not someone elses.

I like to minimize my risk, maximize my profit. If I got in NILE now, I am not at REE...so the risk is higher. I also see NILE as flagging, but until if confirms, it is for me a higher risk entry. I prefer low risk entrys when my soldiers ($$) go to battle with the market.

Now certainly you could get in today and NILE could run right up to $130, and that would be a great profit, but fo rme, not a great trade. And I will not feel bad by not being in it because the entry at $95ish was to high a risk for my style of trading. NILE could easily run down to $85ish near the diag trendline (that is REE), bounce and remain in its curent uptrend. A great trade for me is a perfect entry, at a defined low risk trendline. Is $93 or $95 a low risk trendline? Not for me.

This is why we hammer the point of evaluate your own trades and do not take the recomendations from any of us.

Risk analysis, great entrys, taking profits....minimizing risk, protecting trading capital....all part of the plan...all part of MY PLAN.

Hope my perspective on NILE opens the flood gates for discussion, this is how we learn and get better...

Now, for a comparison, pull up the 9 month on EEP. An obvious resistance trendline 49.50 ish. And EEP's price is also approaching my diag downtrending resistance line. An entry here is at REE, very low risk in comparison to NILE due to how close the price is to a stronger trendline.

Anyway, this is what I look for in getting into a trade to minimize risk and maximize gain.

I stayed in LAMR, too. I watched that baby like a hawk all day. I chose to stay because I believed that the good news wasn't affecting it like it should have.

Had I not stuck to my rule about only trading at the end of the day, I would be kicking myself today.

Glad you're back, Brett. It's not the same without you. :-)

Okay, question on bid/ask spreads. I'm looking to buy a put with a .50 spread. This obviously kills me on the out of the money and the at the money option which are only priced at .70 and 2.35 per contract.

How do you all feel about a $.50 spread as a percentage of the contract price the further you get into the money?

First ITM is $6.10
2nd ITM is $11.00

Risk/Reward scenario is right at 4x.

Kim

Geez Louise, this this the most wordy blog i've ever been to in my lifetime. I tried once to read thru all the comments and i got a headache. Hope you folks are making as much money as you talk.

GOod luck.

And buy solars!!!

Solar flare!@@@

Beanie, We like to be wordy; we are a tightknit group of traders.

And we know, and get your point, that solar is hot. Maybe you want to stay with Tim's blog...

--Patti

Beanie....

Take two asprin, and don't let the door hit you in the ass on the way out.

Raimo,
Getting back to your NILE analysis (which I agree with completely), does that mean that you don't trade flags because they are too far from support REE?

Doji...

A pattern play is different (I know you know this) from a trendline bounce..

I DO play flags...and when I do, REE is the breakout.

Ramio,

Thank you for the teaching on NILE and EEP. Your teaching is very much appreciated.

Anu

I respect Raimo's analysis on NILE, and for his risk/reward analysis, this is not a good trade. Raimo is a great trader, and he knows what he likes to see.

For me, however, NILE is a perfect entry, and one that I enjoy. It's a retest of a prior high that has held the last 3 days. Plus, for me, getting in here, at support, gets you in before the flag breakout that we all know is coming. That breakout should send the stock well over the $100 mark, and possibly right to $120.

Check out the volume on the up moves on this thing too. I love it.

Raimo,
I do know this. But I guess I was looking at NILE's action yesterday as a flag breakout, albeit with marginal volume, but an end of day breakout nontheless. Perhaps you don't see it as a flag breakout yet since the volume was lacking.

Does anyone see any news on ACH,ZNH? Both taking a beating pre market

David,

Here's the news:

"China has first down day in 50."

Doji..

There is no flag breakout on NILE. I see no price movement for a breakout, and no volume.

NILE hs to clear around $100 for a flag breakout.

Getting in yesterday is aggressive...and does not meet my criteria for a low risk entry with maximum gain potential. I wont chase NILE, bit if a flag breakout confirms, or it comes down to support (multiple points), I'll get in then. Right now, if you got in yesterday, that's a big matza ball hanging out there.

Thanks Brett

ZION is sitting at diagonal resistance of a descending triangle. Aggressive, anticipatory, easy way to manage risk and get a couple more points of fall if it breaks this time around.

LVS - ughhhhh. Glad I had a small stock play on that one. Popped me in the butt and got stopped out.
Maybe it will recover, but I'm moving on to other things.

Michelle

Got stopped out of POT because I had too tight a stop to protect profits. But at the end of the day, if it holds, 105 looks like a great entry.

LVS, maybe today would have been a better entry (gonna go check the news and see what happened.)

Michelle

Man it is UGLY in my portfolio, gave up all the gains I had yesterday and then some. Went from +3200 to only +200 right now and stuff may not be done.

It will be interesting to see where the day ends up.

hope some are fairing better, haha.

Ben

Good morning. Anyone taken a look at APA? Looks to be a beautiful retest at $89. This one may have $120 written all over it if it closes above 89 today. Any thoughts?

Kim, on bid/ask spreads. I personally can't trade with a $0.50 spread. It's not a matter of OTM or ITM to me, it's a matter of time frame. If I am playing short term (which I always am right now with options), I can't afford the extra risk that the big spread gives me. If it goes against me, even if I'm at REE I take a bigger hit because it's tough to get in and tough to get out.

The only exception would be if the option is really liquid and you can easily get in at the mid or something, but my experience has been that tighter spreads are better for my short term strategy.

If I were longer term, I wouldn't mind so much because the potential long term reward might offset that risk.

The FXY is about to confirm a head and shoulders reversal. That should be good for US equities, right Jeff?

DAKT above $30. Next stop $34 (and hopefully beyond).

James H.

Michelle
Finally ISRG. I took this trade at breakout too a few days ago. It tested my patients like GRMN did.

Taking LVS now is nuts. It's $20-$25 away from support.......you would be chasing the trade.

I hope some of you are in CIEN !!
I cant remember who suggested it, but thank you!! it made up for the grmn trade..

dennis

LVS,
My $.02.
Flag break out on 9/24. Lets call it $131 ish (30 point potential move to confirm flag break). I see it retesting today. Your get out is close below $131 ish.
Just my $.02

rough morning over here.

quick question, I was playing around with the pattern search on profit in TOS and now I have lines drawn all over the place on tons of my charts. Does anyone know how to delete these lines by any chance?

thanks
Greg H
long island, ny

LVS, I'm not touching it. Somebody else can make or lose money on it. Should have waited for a REE point anyway.

Michelle

Greg,
If you right click on the line it will give you a delete option.

Lis,
Just got into ISRG on the breakout also. What do you have as your initial target? Thanks .
Mark

==========================
GRMN killed my Computer!
==========================
Raimo and Liz, I have been with you in computer hell - again. That was me in the back. With six in the house you would think I would not have these problems. All day yesterday I was rebuilding a new computer (that I paid to have built right the first time) and was between computers. There are parts all over the floor and a plastic bag of something stuck to my foot but I am up again and reading the blog. Next the watchlist!

Krystal, sorry I am late but I know exactly how you feel as I had the same experience. With some encourage from my friends and a shot in the arm from Jeff (oh and it helps to have a computer working) I am all dusted off and ready to go again. Thanks to DG and Chris for the encourage and to my new friend Barry as well.

Gone most of the day to day but will catch up this evening.

Greg,

If you click on "patterns" in the Prophet chart menu bar and then click "clear results" it will get rid of them. You can also click and un-click the ones you want to see in the "find patterns..." under the same "patterns" drop down menu.

Ryan in SF
aka The "Snowflake" Pattern Maker

Regarding LVS there is some shallow support around 131 area not a bad entry here.

ILMN working today

CROX taking off again.

James H.

Wow, this is cool...

LVS..it can be looked at so many ways.


We need the big kahuna here.

Ladd, I completely see the 9/24 price action and volume, I am just not convinced that the three days prior to that is any type of a flag that it broke out of. And if it did, it is my understanding that flag re-tests are not the most reliable.

I could see that it broke out of a flag yesterday, and failed today....

Jeff, we need ya buddy...

POWERMOVE ON RESP!!

It's up $.09. Anyone see any news???


Move, you miserable sloth!

RIMM bouncing up ahead of earnings tomorrow.

ANDE - could confirm today.

Lets hope it's on some good volume to make me feel real good about taking the trade.

Mark
FYI- I am very new to trading and am still in the learning phase.
With that said, my target is 270. But...because my account is small and I am recovering, I will be getting out before then like I did with GRMN. For now, I will be taking a couple of days profits and running.

ELON Blastoff!

James H.

Yeah, Brett, I got into RESP when it "faked out." I am watching it too, along with BCSI until I see some substantial movement.

Lis, Jeff had ISRG on his list a week or so back when I bought it. It is a triangle breakout. I bought it when I "thought" it broke out. It has been holding steady at 230 support. It is also on the list that Eric and Jeff mentioned for stocks to watch the fund managers throwing money into at the end of the year.

Michelle

ELON right at $30 resistance ... trying.

88k and 99k shares bought right after 11:10 a.m. shot the stock up in a straight line from $28.70 to $30.

James H.

Jeff:
I know you are the expert on BA. Cup and handle here?

Anyone?

VMW (some claimed to be the next GOOG) is headed to 102 really soon!

HOW HOT IS SOLAR/ALTERNATIVE ENERGY? How hot will they become???


Wednesday, October 03, 2007

Buy TSSP only if you believe in the solar/alternative energy bull market.

TSSP trades@ .0006

The stock is a pinksheet. I have not play anything less than $10 in awhile. But i truly believe in the solar and alternative energy super bull market that will last another 4-5 years. If it turns out to be the case, ALL SOLAR AND ALTERNATIVE ENERGY stocks will fly, regardless of whether they're big or small.

At one point, TSSP traded at $0.35 several years ago. That is nearly 600 times the current price. I know there's been alot of dilution since then but it's a very small cap company, nevertheless. If the solars become white hot, eventually i see TSSP trading above $.35 . I don't mind increasing my stake 600 times. For every $100 invested, it could get you $60,000 when and if the solars become white hot.

Please play no more than $500 and consider it a lottery ticket only. I'm personally only playing $200 for this lotto, but could add more as it rises and as the solars really take off. I plan to hold for a few years.

Good luck.

Oils and the commodities are due for a multiyear correction. They ran for years and it's about time they give some back.

Be cognizant.

This comment has been removed by the author.

hey, a measly little investment in TSSP could end up getting you a house in certain parts of the country. Good luck. Play safe.

QMAR - Taking off and gapping again for the third +5% move per day in a row. If you missed this, it should start flagging soon. Keep an eye out.

Ryan in SF
aka The Flagpole Sitter

Hey Spammer...

Jeff was pitching solar stocks six months ago. Be original.

Jake T.

Sorry JakeT,

Beanie has been pumpin solars ALMOST EVERYDAY for a year now.

On a different note: (10/2)

I am raising BIDU's target from $1,000 to $2,000!

BIDU trades @ 317 right this moment.

If you believe in the economic future of China, then BIDU is perhaps your best bet to capitalize on it. BIDU to $2,000 means only about 60 billion market cap (which will be about 1/3 the size of GOOG is now).

Buy buy buy!

Jeff,
Can you block beanie weenie off the blog? What a nuisance.

Michelle

Juice it up with VMW! Many techies are talkin about it like it's the next GOOG. Can't say i agree with them but they do got disruptive technology and they are growing faster than any tech ever did from the revenues points of 200million to 1 billion.

Beanie, Please just read and learn or we'll ask Jeff to ban you from the blog. Yes, we are wordy but we don't hype penny stocks or stocks not at an entry point.

--Patti

DAKT > $31 My target from the previous S/R = $35 (potential resistance at $34ish).

ELON above $30 and moving on up.

Now if I can erase GRMN and LVS from my mind...and get BCSI to not fear high altitudes (post-split hopefully).

James H.

JK,
I second Michelle's idea re: Beannnnnie

Michelle
I added it to my list when I started reading this blog- thanks Jeff. I did not know about the fund managers throwing $ into it- great info.
Makes me want to hang on to it until it reaches the 270. Am I correct on the target by the way? I will take it day by day and decide what to do...hold...sell after a couple days of profit....set tight stop losses. What's your opinion?

PCLN...know about it.


Jamie

HANS is blasting back off also after consolidating for a few days. I missed that one bigger than life.

James H.

OA's,

I find both Raimo's and Brett's analysis on NILE to be VERY, VERY interesting, and almost polarized. So that begs the question...who is right?

Answer: They both are!

Now, I tend to "agree" with Brett's analysis more because I "see" the same things that he "sees." (I put see in parentheses because it's what we see with our mind's eye since we're ALL looking at the same chart with our natural eyes).

I see a saucer pattern begin broken out of around 9/20 or 9/21. Resistance at $95 where the stock hit its head on Aug 7, 8, and Sept 18 and 19. (But remember, Raimo said he saw NOTHING at $95, so again, it's the mind's eye).

Previous price action reminds me of GRMN (nobody get mad at me for mentioning it AGAIN! :)) in that it's hovering right around old resistance and testing it as new support. I, too, see a bull flag possibly being broken out of today (again, Raimo says there is no bull flag).

So I think it will be interesting to see how the infamous NILE plays out.

I also agree with Brett that yesterday (or one of the past few days, for that matter) would have been a good entry for NILE. Yet, I think I see where Raimo is coming from in saying that the lowest risk entry point was to play the support bounce.

Only time will tell, Addicts!

Krystal

beanie,

What? will no one come and blog with you on your site? Must be telling you something. We do not need you to tell us what we already know. We have our proffessor. He walks circles aroundyou could his eyes closed. SO SHUT UP!! SIT BACK AND YOU MIGHT LEARN SOMETHING.

Long: Jeff
Short: Tacky used car salesmen
Diana

Lis,
$250 looks like a good first target, but $270 is not out of the question, for sure.
Mark

I'm wrestling with the idea of trading breakouts vs. finding trades right near the REE.

Seems to me that trading breakout confirmations violates the REE principle because inevitably, by the time it confirms the stock is well on its way away from either support or resistance. How do you guys (and gals! :) reconcile the difference?

GMCR gapping up from consolidation area/apex of old SYM. Tri. also.

James H.

Matt:
Often times a stock will re-test a breakout, and this can give you a low risk entry (REE)

YGE, one of our speculative solar plays, is headed to $40 really soon.

ka chingo bingo!

Matt, I personally don't take breakout trades unless they retest. This means that I will miss a lot of great trades, but I have found with my small, short term options account this is the best deal for me.

Look at CME yesterday. It traded down right to 600 intraday which is where I sold my put vertical and now it is off and running. Much better entry at 600 than at 606.

Solars are too cheap and YGE is springloaded to catch up to LDK.

As a follow up, what I have been doing is at night, if I see something that has broken out, I set an alert to tell me if it goes back and hits the breakout point. That alerts me during the day if it hits REE where I can take the trade for a lot less risk. if it never hits it, oh well -- there are a lot of other trades.

I'm going to go ahead and call the bottom on WNR, if that' alright with everyone here.

sorry diana,

Nobody is gonna run circles around Beanie . Not this time. Not when he has solar springloaded champion YGE on his side.

Really springloaded, it looks.

LVS,
I forced myself to see a flag that's pretty questionable. Michelle, I should do what you did and get out, I think. I never EVER should have taken that trade. I did not conserve capital. I got emotional. Now I'm getting emotional again. Only it's more like road rage. And beannie's not helping.

Raimo, on EEP does it not concern you that the higher volume days this past couple of weeks, have been on the "up" days while the down days have been on lower volume? The last leg down was quite short (like me) and the two issues combined have me wondering about it's potential. I want to like it as I'm very short shorts right now... if you get my drift. And not the short shorts I like to see.

Bob (and Pam) nice to see you're back. That bit of plastic stuck to your foot might be the bag holding my lunch from last week. Please FedEx it back to me as I'm hungry.

Matt,

There are times where the breakout launches the stock so high that the risk/reward is not good for entry. However, not all breakouts are like that. Many will put you close to REE.

Pick out your target based on pattern or Supp/Res (bounce etc.). Then see if the amount the stock has moved above the breakout point ruins your risk reward or if it isn't bad under the circumstances.

I don't particularly care how far in $$ the breakout puts the price above the breakout period. I look at the overall target, and where I would set my stop loss. If the risk/reward is still good and I'm not too far away from support I'll still take the trade, but I might make my stop loss a little tighter than normal.

Also, many breakouts retest the breakout line. You might want to consider looking for these retests as entries. They are usually very close if not right on REE.

Just my $0.02. Other people have certain rules about % over the breakout etc.

You will miss some breakouts. I wish I was in HANS earlier (again... I sold my OCT options when it starged to consolidate and took profits) but it has now moved too high for me to get into based on my target based on supp/resistance.

I actually think HANS will keep on moving up, but for now it seems to be making $6-7 jumps then consolidating. Since it has already moved up almost $3 = I missed my chance. However, there are plenty of trades to get into that don't jump up half the target price in one day.

Hope this helps. Remember to look for retests - good REE.

James H.

The dollar is most likely done fallin.

Time to back up that multiyear truck? Back that arse up?

Matt,

MY personal absolute favorite way to play a breakout is from the support bounce, however, sometimes I end up catching the breakout only.

For example, in playing the potential breakout on NILE, I would love to have gotten in at the support bounce on Sept 10. Instead, I got in on the breakout, so my position is down a little right now. However, had I gotten in on the support bounce, I would have a profit going into the anticipated breakout, not a small loss.

Hope this helps!

Krystal :)

Matt,
I tend not to trade breakouts for that very reason. I haven't yet been able to figure out when they will re-test or when it's a fake-out. A number of breakouts though, come from bounces of support... horizontal, and diagonal. If I see a pattern that is supported by both horiz. and diag. support then I'm all in. Those are the kinds of trades that I live for.

I know I mentioned it before but both NOV and PCU are stocks that are just perking along minding their own business. No REE, as they just keep going up and up. Sort of like PCP in the spring. Might wanna have a look-see.

Last week I had previously thrown out to the group here CPSL at $5, JRJC at $20 and GRRF at about $8 ... so my next speculative china stock play is CNEH.

JB

CLEAN CUPS!

Waiting 'till 3 on NUE.

Nice bounce trade Risk/Reward only 2or3:1 with earnings approaching.

Hey Matza Ball Man,
I know your cable is down again today so you are probably filling the local comcast office building full of holes. I just wanted you to know I took Nile down yesterday too! And Elon at the lows.

Best of luck with the connection.

Cheers,
C4

Hey gang. Just thought I'd mention what I've been doing in order to keep myself breast of what is going on here and all the great teaching and stock ideas.

I have been keeping a word document open and I just copy and paste the comment. This will prove useful in a few weeks when a new person asks for the definition of REE. :-)

Hey one other thing, did y'all know that SOLAR stocks are on the rise??? hahahaha

Brett,
Patience on RESP, my friend. My only concern here is earnings is on the 22nd and that may end up being the catalyst that breaks this coiled spring.... one way or the other. It is SUCH a textbook asc triangle though, that I just love to watch it.

Not that I like to watch.

Good grief! That should be "Abreast."

Chris,

It's a textbook FAILURE. Ascending triangles become highly unreliable as they get closer to the apex.

It is interesting to hear everyone's analysis on diff stocks like LVS and FSLR, etc.

Particularly LVS.

This brings up a question I have wondered, does it really matter?

I think the way we approach is likely the best way, by finding fairly convincing support/resistance areas for exit, in the long run I think this will be the bes edge.

HOWEVER, the logic in me also says, part of the fact that it contributes to success is the fact that we even drew a line to get out. I would like to see a study done, basically what we are doing is getting in at a point close to where we get out, and if that happens we lose less. Like I said it would be interesting to see a study done where people jump in still with the trend at random and set their stop out 2% below, and compare it to someone ALWAYS getting in at support;resistance.

I honestly couldn't tell you who would do better, I'd like to say our style has significant advantage, but it could be the mere fact that we basically get out quick when the trade goes against us.

Long story short, if you see support at 131 on LVS, set it there and take the trade and get out if it goes down, same with FSLR.

If I get in here I will keep track if it is successful or not, obviously there would need to be a huge study done.

Has anyone else thought about this?

Ben

p.s. I am by no means condoning the random entry with 2% stop, just brought it up for discussion, IMO there does seem to be something around the 130 areas on FSLR and LVS, as long as you have your line drawn, you have your risk defined, which is what you need. The downside I see is say, you take the trade now, you get out at a loss, it goes all the way down to "obvious" support, you take it there and it breaks you take a loss. That is 2 losses to the 1 you would have had, but how likely is that?

Probabilities are a funny thing. :-)

Ben

I am going to repost this in the next thread, because I want input. :-)

Ben