Floyd's Trading Blog

If You Believe This

2008-05-16T18:20:00.000-07:00

Consumer inflation cooled last month, which made the Fed's case that inflation is easing. If you believe this you're a Republican and know that the war in Iraq is necessary to restore real world order:)

But it was this, coupled with Icahn stepping in to raid Yahoo, and deal making, lowering oil that allowed investors to look past mostly weak economic reports and yet again raise the market to Dow tops of 13,040. We continue to believe that bulls may take this market to 13,100 area on the theoretical Dow, especially noting that May option expiry the market has been up 7 and down 7 since 1993. It coincides with the very slight whipsaw "counts" we've seen all week.

The June630C was available as low as 16.00 in morning downside, and sold to tops of 20.70 by late afternoon, for profit potentials of 29% in single day trading.

A few comments and lessons from subscribers:

"Hi,

I received my alert this morning without trade recommendations. I received commentary from Floyd but no alerts.

I read my manual last night and was overwhelmed. I can follow the trade recommendations with the work sheets but everything else is Greek.How much of this I am going to have to do on my own? I am a newbie and willing to learn but this stuff looks complicated.

Give me some insights please."

Floyd-I'd like subscribers to help me answer this. What would you say to this subscriber?

"Do you mind sharing with me what metric(s) you use to determine your tops and bottoms for the Dow? Also, if you could have any of your student/trader’s study and really focus on 2-3 areas of learning, what would they be? (above and beyond point and figure charting)."
Floyd-this is a widely asked question.
1. I use point and figure charts with 50 and 200 day moving averages and Bollinger Bands.
2. I track on point and figure daily charts and watch support and resistance lines that "stand out". Much of this is intuitive, and NOT mechanical.
3. In a 21 day average period this past year the market moves in 586 point ranges. Level 3 subscribers have an excellent article on "Watching Drops in the Marketplace" on the website. I believe that at market tops (which I project) the market will typically move around support lines proportionately 586 points over an up to 21 day period. News will act as the catalyst and trigger, around economic data.

And from another subscriber, with Floyd comments in bold:

"
Hi Floyd,

Am new to the service.

Make sure you really read our manual.
Please clarify your sell strategy. e.g. May 640 c alert (issued May 13) was sell to 24.90 and first buys only made.

Yes, and this hit up to 30%profit goals, and was profitable for two days. The sell prices we list are the TOP prices we think the option will go to.

It did not hit 24.90 with a high of 19.90 yesterday and there were no second buys. However your May 15 premarket commentary says it should have been sold on the 14th !

We often take an option off the alert if it's been profitable. We list the stop loss initially for the morning of the 4th day, with the first day beginning the day after the buy
This would change if a second buy were made, with the # of days stop loss then beginning the morning after the second buy. When making a second buy you would average your costs (the second buy typically TWICE the number of contracts as the first) and setting sales goals of up to 30% on the averaged costs

Are we supposed to wait until we hit these recommended sell rates or sell when the DOW hits the upper limit mentioned in your commentary (upper limit minus 30 points so 13000-30 = 12970 which it hit yesterday) and just book whatever profit (depending on the purchase price). The Dow projections tell you the top or bottom areas we see the market going to.

Holding for the top levels, or bottom, is higher risk, and we recommend always selling a profitable option in 1/3's, holding the final 1/3 for the top range (near, not at), if looking for top profits. The risk increases as you hold the final partials.

Or do we just hold for the 5 days with a sell price of 24.90 and if it does not hit the target sell on the morning of the 5th day.

Be sure and really study our 130 page manual. Understand your own risk/reward ratios, and define what your profit goals are.

All is Good

2008-05-15T08:21:00.000-07:00

Ahh, euphoria. All is good. And the market topped a theoretical Dow of 13,033 before a downward slide near the end of the day. All calls were profitable. And now, the market talking heads will tell us that "upside is on its way" and the worst might be over.

A few words from subscribers:

Floyd:

"scaled into 80 contracts from 16.80 to 15.80. Sell orders filled at 17.80 & 19.00, waiting for final fill at 21.00.

Another winner......on top of the 630 Call. Monday, flipped 20 contracts for $5k.

No emotion.......

Of course I'm having fun.....but always in the back of my head, don't get greedy....

Honestly, in 3 months I've banked around $150k and still working a $100k full time job.

Thank you, It's taken some heavy losses to finally "get it", but thanks to your instruction, reseach, and Floydian intuition, I definately have become a much better trader.

I also try to use the poker philosophy, don't count your money at the table, because the table will end up with your money. BTW, I don't gamble, I have an addictive personality...:)

Trader BD

From: Trader RC

Floyd,

Thanks for another very successful trade. It is greatly appreciated. I actually am beginning to feel the market a bit. Today I sold at $19.40 before the afternoon Dow jump because it appeared our price was not moving much with large moves in the OEX. Also, I heeded your top advisement of 13,000 on the Dow.

I have made it through Dorsey’s book over the weekend and I am making my way through Wyckoff’s this week. My wife asked, “isn’t that stuff really boring?” I just smiled. This is an absolute joy because I feel like a kid again - fully absorbed in learning something new.

I am sure you hear this all the time however I will tell you I started my trading account with $77,000 in late March and it is now at $102k and some change. That is with a boat load of self made mistakes (my own trades initiated with no data to back them up - losses of at least 10k), and not really following your model fully until three weeks ago.

From PC in Germany, with Floyd responses in bold
Hi Ffloyd,

I bought the Jun 640C yesterday at 16.50. Dow and OEX obeyed your instructions nicely today. The Dow reached your theoretical projection of 13000, actual 12960ish, after a bit of a struggle to break 12980 theoretical. Looking at where the Dow was at 13000 I couldn't see much more mileage in the OEX and thus the 640C. TOS got me 19.30 on a tick of 19.50 so, nice.

I was "rewarded" on this decision by the price reversing almost immediately after I sold so please do take personal pride that your students are coming along :-)

Exactly right.

I'm still buying in single contracts and so now hold no inventory and am happy with this position. I can comfortably tell myself I've made my money for the day. I made 17% in actual cash profit as a strong resistance point proved to be a reversal point.

So my question is not greed but philiosophy - I ask the following so that I can watch.

You have the expression "falling in love" with an option. I neither presume nor hope that this is an occasion for it, based on your recent projections we are too close to a top for this - right? But in order to be in love for the day you must be reading the moves of hours day fairly accurately too and not just taking your lead from your overall projections which in finest detail is a day and by default up to 5 days. To buy more than once in one day you are confident that the drop which let you back in is not in fact a reversal but retracement within that trading day.

Yes, right now I'm not yet in love with the 640C, because of so much potential for reversal. What happened after you sold is a good example of the struggle.

So, with so much of the trading day remaining, how do you see it going from here? 2 hours into it. How do you "spot" a retracement intraday? Intraday Fibonacci?

My first hour OEX pivot calculations show pivot at 647.49 and R1 at 650.10, my own limited experience says to me that the OEX will now flap about between these points for the next couple of hours - comment?

First hour ATR shows potential high of 653.39, potential low 640.40.

We'll see how this plays out, but I suspect the market will break 13,000 today (or tomorrow) and the bulls will be babbling all over the place that it's getting better, and we'll then quickly reverse"

Excellent trades Floyd. Out of the 640C at 30% and the 630C at 28%. Haven't missed a trade in so long I'm nervous. I've learned so much from you, but what I've learned most?....The market moves in patterns, and the "idiots" (you're nice) that tell us what is happening know nothing".-NBW

It is very likely the market could lead with more upside. Follow our Dow projections carefully. Calls may still have some short lived strength, but as soon as everyone thinks it's going well, it will fall again. All is NOT as it appears.

Markets Are Not Normal

2008-05-14T09:45:00.000-07:00

This ought to be enough to make you smile:
NEW YORK (MarketWatch) -- U.S. stocks fell on Tuesday, with financials greasing the slide, after Federal Reserve Chairman Ben Bernanke described financial markets as far from normal and an analyst slashed estimates for major brokers, including Merrill Lynch & Co.

"Financials are selling off again today, we saw an influential analyst cut numbers -- brokers still have downside -- and, the market is just taking some profit," given its 10% climb from the bottom hit in the middle of March."

Where do these idiots come from? The financial markets are NOT normal, oil is at all time high, and brokers should all be downgraded. It's obvious.

With this said, we took entry to the June640C, sold our June630C from the day prior (or may still hold partials) and continue to see two way trades in the market.
We continue to see a potential for short upside to near and around 13,000, moves then to below 50 day moving averages, and a return to upside. The directional bias,however (which will come first) will depend upon events,and what the idiots say today. Bernanke led this sell off with "markets are not normal".

Wonder Bread is Up 74 Percent

2008-05-13T15:21:00.000-07:00

As the market dipped last week, in an anticipated Floydian downside, the volume of the market as this occurred was not large. A telling statement.

Bananas are up 41% since 2003. Wonder Bread is up 74% in the same time period, Skim Mil up 38% and Diet Coke 10%. This is what pumps inflation. China just showed it's highest inflation numbers since 1996.

With strong influence economic data out this week it's likely to have classic whipsaw, as the market struggles between optimism and realism. Downside, we do not believe, is yet over, as the historical cycle of # of days between moves has not yet shown a full downside, with strong support lines showing hesitancy time and time again. Because of this we believe our Dow projections could have two additional "faltering points": up moves to just under 13,000 (12,950) and down moves to just under 12,540.

The USD is reaching new highs, due to NOTHING we have done to stabilize the dollar, but the massively strengthening Euro hitting new highs. We believe the Euro may soon seriously falter, which could affect the USD positively, and affect the price of a barrel of oil. Remember, barrels of oil are priced worldwide in USD, and any faltering of the Euro could actually decrease our inflation, and lower the price of oil.

When this happens Republicans will take the responsibility, and point out the preventive measures put in place that are now working, with only those of us in the know smiling as to "all things are not as they appear."

We saw a good upsurge on Monday, with the market topping the theoretical Dow at 12,944, which MAY be the first top to the market, before more downside. The June630C, available and bought on Friday, surged to 24.70 in yesterday's trading, and remains an open signal.

Study our Dow projections carefully, as we believe the market may TOP just at 13,000 and have a short, but potentially large slide, before more upside.

Successful Trading is a Journey

2008-05-12T13:52:00.000-07:00

NEW YORK (MarketWatch) -- With the first-quarter earnings season almost past, investors will continue to face mounting concerns about consumption and the U.S. economy next week, with retail sales and consumer-price data likely to reflect the impact of surging energy and food prices. Retail earnings and consumer sentiment reports will trigger reaction or action, we think entirely dependent upon the price of oil. Any slight oil drop could trigger the event of upsurge.

5/12 – Monday before May expiration, Dow up 17 of last 19
Monday after Mother’s Day, Dow up 10 of last 12

"The subscriber you quote today - Mike - said it exactly right. "Like life, successful trading is a journey". Next time you run across Mike, please pass on my regards, I like the way he thinks and can identify with it more and more by the day.
Thanks also for the Put yesterday. I wonder how many of us smiled when we saw that come through............ I smiled for the following reason.........

When a horse wins a handicap race comfortably it is generally because in his preceding few races his trainer placed him over longer distances (or shorter and faster) than his natural best winning distance, e.g, a mile race instead of 5 or 7 furlongs, and in "better class" i.e. in races he has no chance of winning. The handicapper gives him low weight due to his "failing" performance up to then (in races not suited to him). Now he comes out, race fit, having been stretched either by distance or speed he's placed for his natural pace. If he's won at that distance before, probably at that type of course you pay attention to him in the betting (money) market, a money trail WILL show - if you look!! as many do not and on this lies the success of the manipulators to ensure their best betting odds - You are not surprised at his win.

If this horse now enters a race within 14 days of that win he will carry a penalty weight, there may also be another adjustment of distance, even jockey change, eg, an apprentice jockey, they are allowed to claim weight off in handicap races, so the penatly weight may be cancelled out but still show as having been issued - seeing 7lbsex, 7 pounds extra, on the race card puts joe public off for instance. Now you really pay attention to him in the money market. His best chance of a win is directly after a win.................

It's simplicity is its greatest disguise :-) Mr Wyckoff described handicap racing. Big money cannot move any other way, it must be disguised from those who do not train themselves to look. The source of income for the manipulators.

I just love these men Wyckoff and Ffloyd, he's taking me back to the home of my spirit.

Yesterday, the above horse was called May 655P and romped home nicely - thank you!!"

The market continued to move downward as Bush oil hit new highs. $32.00 a barrel when he entered office, and $126.00 Friday. There is no market manipulation going on:)

Midday we issued an alert for the June630C, and took entry immediately . For traders that held out for best buy price we continue to recommend a new ITM June option, contrarian to sentiment, as our first trade of June expiry.

Our view of macroeconomics: about every 20 to 23 days the market has the historical nature to shift trends by an average of 586 points. Make money off these trends.

Crude Oil is Priced by Floor Traders

2008-05-09T18:36:00.000-07:00

Subscriber quote detail in the commentary has become quite interactive over this past 7 market days, and feedback has helped a number of traders.

From an Advanced Mentoring and Level 3 subscriber in California, MF:

"Hi Floyd,

For the record, I never doubted you. You're a great man, not because signal 28(or whatever) in row made money, but because you're a great teacher which teaches how to trade not buy an option.

Like life, successful trading is a journey. I hope most of your scared subscribers learned that, and now make the changes to thrive during the journey.

Thanks,
Mike "

From AWE/Chicago:

"14.50 to 15.70 in 75 minutes. Scalped it again for 1.00 later. Right to 12,760 again, Floyd, and up 8k for the day. No emotions. Knew the risk to the trade"

Yesterday's moves helped us see the strength of uptrend, and longer term bias. Midday we issued an alert for May655P at 12.70 or less, promptly available to buy, and sold for up to 15.70, right near our 15.90 top, within two hours, and available for day trading scalping several times after that, all around the struggle at 645 and 647.

Today is historically stronger, the Dow up 8 of the last 12 years. Floyd sees a 52% chance of more downside, however, and today could show whipsaw, and a plunge. Who knows?

It's now a struggle beginning at a trading range, and oil will lead the "event" that will be construed to trigger movement...read that carefully, because the cause and effect are already in place around supply and demand; it will be an "event" (earnings, oil, fraud probe that will provide the trigger to what is already going to happen.

We'll hold and recommend the same put today, a high risk trade, focusing on one more downward plunge, before a renewed 350 point potential upside. Bias is being established.

OPEC tells us that $200.00 oil could truly be on the horizon, and we hear from economists we'll soon hit 4.00 to 5.00 gallon, to other economists telling us that oil has peaked, and gas prices could tumble.

We believe oil is priced entirely by commodity traders entirely at this time, and the value of supply/demand, or what can be refined (all the gobblygook we read each day) has little to do with the price of crude. We believe crude oil is priced by floor traders, leading the market with their manipulation.

In actuality the European Central bank may actually become our American ally, and our undoing. What's happening is that the Euro is becoming hugely expensive compared to our USD.

Europe is having trouble exporting because of the value of their own "dollar". We could soon see, thusly, the Euro devalue,and conversely the USD rally. What will happen is not so obvious to the American public, but oil is priced worldwide in U.S. Dollars. If there were a 10% rise in the dollar, for example, oil could fall by $1.00 a gallon.

This will, of course, move our silly little minds right back to the SUVS, and to massive consumption, as "all is better", and "it is easy again", and we will lose sight of the real picture, yet again letting the horse out of the barn and locking the door. The USD is at a 12 year low against the Japanese yen and the Euro has almost doubled against the USD since 2002.

We are now creating a foreign currency bubble, and all bubbles burst.

Remember that what the majority expect is seldom right. Recession could actually begin to slow (Floyd predicts the end by October 2008, while the economists still debate whether we are in one) because the USD strengthens, NOT from our wise movements or $160 billion stimulus package (yet most will think this is why we improve, again falsely). If recession slows it will do so because the USD gains false value BECAUSE the foreign currency bubble bursts.

We're watching. It may soon be time to short oil, and to move out of some commodities, as the USD may gain because of others stupidity, and nothing that we do to truly improve the value of our paper currency.

DJX or SPX Option traders: Puts profitable again yesterday. New Trade: DJX May ATM Put for 20% profits. Sell by day end. High risk trade.

"The federal government is sending each and everyone of us at least a $600 rebate. If we spend that money at Wal-Mart, the money will go to China. If we spend it on gasoline it will go to the Arabs. If we purchase a computer it will go to India. If we purchase fruit and vegetables it will go to Mexico, Honduras, and Guatemala. If we purchase a good car it will go to Japan. If we purchase useless crap it will go to Taiwan ... and none of it will help the American economy. The only way to keep that money here at home is to buy prostitutes, weed, beer, cigarettes, whiskey, and tattoos, since these are the only products still produced in the USA. Thank you for your help & please support the U.S."

Trust the Facts, Not the False Facts

2008-05-08T09:35:00.000-07:00

FLOYD is NOT ONLINE at all today. FISHING. I will lead with this, before I tell you all: I TOLD YOU SO! There! It felt so good to see us in the know watch the May655P move to highs of 16.90, allowing profits to all traders that held it out, and trusted in the FACTS, not the false facts.

The Dow moved to a low of 12,759 on the theoretical Dow. Not sure if I could have been more close in my top level projection. And it's not to brag, but to PROVE to you that the financial babble of the "bulls have taken over" macroeconomic gobblegook that so influenced you all for days. Here's a few comments:

1. “Floyd, That was the single hardest thing I have ever done with regards to investing – keeping to the 4 day rule of stop loss. It was unbelievable how challenging it was. The key element however that you have introduced us to a time tested successful model. I would have NEVER thought to hold that option through the lows. I can’t say the emotion was completely out of it (yet) but I can say I am thrilled I followed your advice/model!!!” - Gratefully, RC

2. “ Sorry about the nervousness. I just lost a lot over the last few days, over $6,ooo after yesterdays reversal. I have 10 puts at a 13.65 average cost so I’m still $4775 out. I wasn’t home yesterday do to work and got burned when the market reversed before it reached my sell order. I would like to stay with it, but I’m concerned it will do like it did yesterday again. I know I over extended on the buy by my own stupidity, but I would appreciate any help you can give me on bailing myself out of this.

Floyd, thank you I bow to your wisdom. sorry I was such a pest. I turned a $6000 loss into a $2000 profit with your advice. I just became a member today and can’t wait to learn more. thanks again.” – D

3. “Floyd, you amaze me. I fought to listen to you, and just realized I wrote you over 15 times on "how wrong you were" and "what I had read", but I kept the faith. I just made 42% and total profits of $31,000 on the one trade. I've never seen the psychology of the trade so perfectly analyzed as your many reader comments. I'll tell them all: subscribe to Advanced Mentoring. Listen and read to you. You can trade full time within a year. And, I agree with your rants...I’ve begun to see what I did not understand. "NC, Asheville

4. “Hi. just wondering why over the last two days, the price has ended up at the opposite level the "first 30-60 minutes of trading" rule of the price in relation to the pivot point said it would. I'm probably just misunderstanding something.
Floyd: Indicators are just indicators.

Also, yesterday, I seem to remember the bias being to the put and yet the day ended up significantly positive. Was this bias fulfilled in the morning? Because that was a short-lived dip in price followed by a much longer-lived rise. Is the bias intended to predict to entire trading day?
Floyd: The bias lasts sometimes 30 minutes:) Puts were profitable yesterday.

This morning's signal was to buy OEYQK again. I already had a contract I bought at 8:40 or so (Which today filled out to sell giving me a 36% return) a little while ago. So this new signal for the day was to add to my position?
Floyd: Can we see from this email that the subscriber still has to learn? It was a new signal. No need to add, if we already owned the signal.

If so, I'm assuming I was supposed to follow the buying rule of waiting until it drops 30% of the price I paid for the original contract. That's how I filled out my pre-market buy orders. They obviously didn't get filled, but I'm just wondering if when you give us a new signal for a position we already have, if you still expect us to wait for it to drop the 33% of our first buy, or if you think its ok to buy at up to 20% of the previous day close?
Floyd: This subscriber needs to read our manual and study.

I made a mistake last week. I had only 10,000 in my paper trading account and bought into OEYQK at a little over $16.00 . My first mistake was to pay more than 10% of my account into that trade. MY second mistake was not buying at 33% discount when the price fell. There I couldn't have held two contracts at a lower averaged cost and profit off of yesterday's early morning drop in the oex. So I took a loss. THANK GOD IM PAPER TRADING!! I'm also glad I had a chance to lose fake money right off the bat. I've learned so freakin much over the last week and a half since I subscribed to you service. I will NEVER make those mistakes again. I might even paper trade longer than 4 months. And just to let you know, I've been considering subscribing to you service for almost a year and have been sourcing you out to see if you're a scam. (20-40 percent returns daily sounds like a scam). But honestly, all I found was positive feedback. I'm deadly serious about trading for a living. I'm only 24, but I'm very committed and serious about it. I'm really glad there’s a mentoring service out there where I can get one on one help. Once I start making real money, I'll also subscribe to bluechipoptions.com and bump up my oexoptions.com level to level 3. "
Floyd: This would be the time this subscriber should subscribe to Level 3, not after making money:)

5. “Man did those guys eat there words today that wrote the emails. Nice call. I still have much to learn though. I was getting restless and sold out just above S1 level and missed out on 125 points of downside. I got back to break even on old 655 trade and then sold the more in the money option I bought yesterday for a decent profit. I just should have had patients, guess it just a learning process. I can not beat myself up for making less profit than I could have. Just learn my emotions.”

With this all said, it's time to move on. The Friday before Mother's Day the Dow has been up 8 of the last 12 years. Be prepared. I suspect we could have a bit more downside today, and will keep the same Dow projection potential bottoms for the short term, and NOT issue a new signal for market opening.

As noted above I plan to "fish" a few hours. For those of you that are new to my style, FISHING means I will not watch the market, will do NOTHING, and will let the dust settle a bit. As I see futures, and appropriate bias clarification, I'll watch for entry to the call. Read our Dow projections carefully.

Lastly, one subscriber wrote yesterday with the question "Is George Soros right?". Soros is a billionaire investor that I believe as astute as Buffett, and like Buffett, he believes that the "worse may be over" and the "recession controlled". Meanwhile, back at the political ranch, the economists and children of government still argue when the recession has begun, or if we are in one. Just as most do not understand that the price of oil has NOTHING to do with supply or demand, or the oil companies, but with oil traders and how they've bet futures, and with how Bush took it from $32.00 a barrel to $120.00 a barrel in his eight years of idiocy, by how he bet our lives on "democracy in the Middle East", and the control of Iraqi oil.

As I teach: ALL is not as it appears.

And one last trader who made my day – “Hey Floyd, My kids are vying for my attention right now so I don't have much time. There is so much I'd like to write to you about.

At this point, all I can say is that I think you are a freakin' genius. Utterly amazing. I cannot believe how someone can predict the market with this kind of accuracy. I realize that you cannot be correct 100% of the time...but I'm telling you right now - I will NEVER doubt you again.

I am studying your manual, watching your videos, and reading your articles. I am only 34 and I know you are older than me. I will have a membership for as long as you are offering your services. However, I want to make sure that on the day you retire, I'm not left with my thumb up my rear not having a clue as to what to do. I am so glad that I signed up for Level 3.

I can't wait to hear what you have to say next. One happy camper!” – MP

Floyd: Thanks MP

May655P Hit Profits

2008-05-07T20:07:00.000-07:00

The Dow moved to a high, again, of 13,050, and a low of 12,820 yesterday. The May655P hit profits at 14.20. Many emails, from many subscribers, should help us all:

1. I'd love to hear your comments with regards to the following statements made today in the news :

"Stocks reversed early losses to trade modestly higher Tuesday, as investors monitored the movements of record-high oil prices but still laid bets that the economy and companies are in recovery mode."

Ryan Detrick, senior technical strategist at Schaeffer's Investment Research, said it is a good sign that stock traders started buying back in again when the Standard & Poor's briefly dipped below the technically significant 1,400 mark.
"We had some negative news this morning, and we've shaken it off. It's encouraging," Detrick said.
"I think overall, the strength in stocks right now is on fairly firm footing," said JPMorgan equities analyst Thomas J. Lee...."The credit markets keep showing increased appetite for risk".... "In some ways, first-quarter earnings are yesterday's news," Lee said.

Huge quarterly losses from three major players in the financial and homebuilding industries initially sparked some stock selling Tuesday, but those dips were soon met by bargain-hunters, who are betting that those sectors are a good buy right now given their low prices.

3PM - THE BULLS ARE OUT!..."All ten of the economic sectors are in positive territory for the first time this session."

Are you still sticking with the following predictions? And is this supposed to happen by the time we exercise out stop loss?

Floyd - “12,660 first strong bottom, leading to a potential bottom of 12,540
There is also a distinct possibility of a softer bottom at 12,760."

2. “Nice move this morning and yesterday. I would have never been able to have the faith and discipline I did to hold out in this put before. It took a long road to get to this point in my trading career. I just made back all my loss on XAU and then some. I figure it would take me a month of so of small gains to get back to break even. It is almost like we have some unfair knowledge that Jim Cramer does not and all the other "professionals" on CNBC don't have.
I did modify the trade a little, let me know if it was flawed. My 2nd buy at the top around 13100 I bought a more in the money option the 665 put as opposed to the 655 puts I was holding inventory on. I made up ground very quick and closed out this morning at a 50% profit, 1 of my 655 contracts sold at $14 and am my last 2 for $14. Buying the higher option was a wise move this time, but want to make sure it is something you see as being ok to do. I only did it because it appeared we were at an extreme level and wanted to take advantage of the downside once it started. Anyway, thanks for the guidance.”

3. “Floyd, I am just a novice at trading so I am trying to get my arms around what the market did today. Did we have the complete reversal because the Federal Govt reduced the restrictions on Fannie and Freddie enabling them to potentially make more bad loans and lose MORE money? And that was
considered good news?

I am going to have to stop loss till the 9th. My "you know what" is puckering just a bit now : )

I guess if I wanted security I would be in T-bills. Kind Regards, RC"

4. “Yeah, I got overconfident as I made $18k in just one trade on Wednesday, but I didn't sell it the 640put cos I thought it was gonna go lower !!! So no profit =(. Thanks very much for your help Floyd, I know I put myself in this mess, but now I need to get out. Thanks Floyd, your prediction that it will go down is true =).

“I really need your advice and help today. Can you please from your vast experience suggest a price for me to sell today my following puts:

1. 640 May Put(bought @$7.00), bought last Wednesday

2. 650 May Put(bought @15.60), bought last Thursday

The longer I hold it, is it the longer the options decrease in value ? As last time I could sell them for around $8.00 of DOW of 12,850. I see in the ThinkOrSwim platform that this price has reduced now. Why is that ? Now if I want to get $7.00 the DOW has to drop to like 12,750. Hope to hear back from you soon before market opens thanks very much Floyd. Regards,
D”

5. “Hey Floyd, Got in May655p @ $11.50 on Thur sold this morning @ $14.00. Got in again in the last half hour @ $7.30 and sold @ $7.90.
Thanks again, D”

The answers are simple:

1. There is little good news, but the bulls are trying to hold the market up. The risk increases by the day, and the market count bias is now 0. This means neither put or call show strength, despite what talking heads say, despite what a chartist will interpret. No trades will show strength until a true move takes place that "identifies" strength.

2. The talking heads are just that. Remember, these are the same boys that bankrupted Bear Stearns.

3. Some of our traders above obviously don't yet understand even the basics of trading options. Are you one of them? Looking for a signal without knowledge of how to trade?

Last week the FEDS gave us the 7th rate cut in as many months, and the easy money policies continued. This time Bernanke clarified, "this might be the end", and it's important to watch this.

The Central bank is hopefully now more concerned about inflation. Concerns over our housing downturn and credit disaster has taken priority to the FEDS, and the incessant babbles about "in recession". In the 1970's Jimmy Carter was labeled the "worst President" only because he had inherited the easy money and weak dollar policies of prior administrations. As always, the American people stupidly believed Carter was the culprit, when in actuality it was the easy money of the past that created the situation that he and the Reserve Chairman Burns had to deal with.

Former President Clinton led during a stock market bubble, and wisely used the capital to pay down the prior administrations (Bush Idiot #1) excessive spending; however, Clinton did little to control the interest rate games, and allowed the great American hero, Bubbles Greenspan, to push for creative financing, and even condone "unique methods to sponsor American home ownership".

Along came Bushy idiot #2, who had never run a business successfully, and was determined to avenge his Father's Middle East fate, we used a terror attack without any logic begin to "build democracy" in a region at war for years. When this occurred, the free money began, and we printed dollars. Remember, Communist China and other foreign countries buy over 51% of our Treasury bills. The "oil strategy" failed (get Iraq pipeline), but the lobbyist efforts by the oil companies, Halliburton, et al brought wealth to many. Exactly what was planned.

Halliburton, who was never bid out on any contracts, now has their core corporate offices in Dubai. Have we said enough?
How are we doing in Afghanistan, where the terror began. Opium sales have doubled, the Taliban are back, and anyone remember Osama Bin Laden?
The rants above lead to what now must occur: The FEDS will have to stop the interest rate games IN CASE we will truly need to lower rates again.
The tax rebates are out. The economy will now burst to the upside, say the stupid, and even have pointed out that the recent runs above 13,100 were led by the tax rebates.

Pure Panic!

2008-05-06T15:37:00.000-07:00

On Friday the number of emails in pure panic mode were exceptional. My favorite was this:

"Floyd, it's clear that the market is now in full break out. I read this on CNN Money and don't understand why you think the market might even go down. All the charts tell me this, and I've talked to several bankers who assure me that the market is headed higher"

And my next favorite:
"Hi Floyd,

I've got a good story for you here.

On Tuesday or Wednesday of last week, I placed my first order from one of your alerts. I don't remember the PUT that you recommended (you'd think I'd have it written down in my journal but I don't - another mistake) but I accidentally placed an order for 7 contracts (I wanted 1 contract). I was so nervous that I did not know how to cancel the order before it filled and needless to say, I had about $7500 on the line (my account is $30,000. Fortunately for me, your alert was correct and I made a quick $1600. I couldn't believe how accurate your predictions were throughout the entire day. Needless to say, I was fired up and ready for the next trade. What a rush!

The next day, you sent out another alert for the 655 PUT (I believe you said to get in under 17.10. I wanted to get in so bad that I bought a contract for 16.50. The price quickly dropped and I bought another at 16.10. As we all know, the price continued to drop and the faster it dropped, the quicker my anger and frustration began to rise. I figured that if I kept buying puts at a lower price, my overall cost would decrease and when the OEX reverses (which of course it will b/c FLOYD said so - I couldn't imagine you being wrong) I will make a great profit. So I bought another contract at 14.50, and another at 14.30 and TWO more at 12.90, one more and 12.80 and finally one last contract at 10.80. All in all, I bought 8 contracts for an average price of 13.85 ($11,080 - without commissions). Remember, my entire portfolio is only $30,000. This is my 2nd week of trading!!

What a perfect of example of how emotion and greed can ruin a trader real fast!!

So you can now imagine why I NEED this puppy to drop a lot and drop fast because I cannot stomach watching 1/3 of my portfolio get pissed down the toilet due to my stupidity.

As I type this, I am ONLY losing $2700 and I am seriously thinking about taking a loss on the entire thing. I can stomach a $2700 loss. I can't imagine a 7 or 8 or 9, 10, ELEVEN THOUSAND DOLLAR LOSS!! NO WAY! Not this early in my trading career. That is 1/3 of my portfolio.

I promise you one thing Floyd - I have learned my lesson about over leveraging, greed and anger. NEVER AGAIN!!

At this point, I'm just trying to minimize my losses. Any recommendations? I should would appreciate any help.

Feel free to use me as an example of what not to do!!

Hope to hear from you soon,

M"

And, in my ongoing email "teaching" as "trial subscribers try us", an email from a gent canceling his service. This one I'll teach from, and I wish this gentleman the best:
"always a pleasure to listen to your analysis. I'm interested in live alert. Your email is excellent- it teaches us how you look to OEX but it did not help us to make $$

It will be excellent subscription if you said clearly we are buying 655 call for $9.50
we are selling 655 call for 10.80 or we are holding overnight and we looking for $13.90 and our stop $4.50.
we are buying put 650 for $11.70 target $14.90 stop loss 3 day or $5.50
thanks for your time and effort. appreciate all your help"

1. He's tried us before. This is called a "churner". They spend much of their time trying a variety of services.
2. Making money is hard. No service is the holy grail. I have clandestinely subscribed to so many services that "offer signals" and never yet have I found one in which you can truly ever "buy at 10.80, sell at 13.90"....or where the service tells you EXACTLY what to do. Think it out: if every subscriber did this the market would flood with the same orders, if the service is of any size.

This in the industry is called "the signal game"....these services make their livings churning through many subscribers that pay to join and have a few successes, but many failures.

If you are the type of subscriber that wants this, please save your money. You will lose it. No service can help you "buy/sell". You must learn HOW to buy sell.

Yesterday the market was first led downward, so the talking heads tell us, because the idiots at Microsoft didn't buy the idiots that ruined Yahoo. This is NOT the reason the market fell. This was the EVENT that triggered the first sell off in the market, that we projected earlier last week, and that has a 55% chance of continuing in downturn. Yesterday the market moved to a theoretical Dow low of 12,900. More downside could occur.

Buffett, the legendary investor, recently advised that he believes the financial meltdown that could occur has lessened in risk. He also advised that stock market gains will NOT be large over the next year, and that smart investors must "think small".

This is one more reason to play index options. Astute investors can gain 10 to 30% on intelligent index investing daily, hourly and weekly, and at the same time invest in solid moves, such as through our stock/option Floyd investing at www.bluechipoptions.com

Do NOT expect high gains. You won't get them. We have done a great job in destroying our own economy and have a long way to rebuild. Remember this as you consider your Presidential candidate.

All is Not as it Appears

2008-05-05T19:28:00.000-07:00

May 665 calls bought at opening on Friday hit fast profit goals of 20% up on Friday. Meanwhile our buys on the May655P remain at loss, and we continue to hold for our 4 day stop loss. No matter what occurs in the next few days, it's time again for Floyd's key lesson of stock trading:

All is NOT as it appears. Only when you truly know this key rule, and can focus away from the talking heads, from the news articles, and from the TV, can you begin to truly understand how the market breathes.

"Floyd, regardless of whether you profit for us on this put, as a long term subscriber I smile when I read the "urgent" messages from your subscribers on Friday...I remember these days well, where I over invested in a trade, and did not manage my risk. Only when I began truly studying your work, and following the rules, did I begin to truly make money. in 2007 I earned 176,000 trading OEX options. In 2006 I lose 27,000. The only difference: I studied, and took the emotions out of the trade."-BCE, Ontario

The amount of FEAR I saw with our traders Friday, and why I simply "closed up shop", indicates the amount of irrational euphoria in the market. As the talking heads said:
"The worst seems behind us, and the market is now fully in a break out mode". (We have not even begun to reach a break out mode, yet).
I could see it in the emails.....28 of 29 of the last trades we've recommended have been profitable, a record for Floyd and OEX, and discussion points I've provided over the past week, that I'm fearful of being right so often that traders would begin to believe this is "easy". I provided a bit of evidence in our second alert Friday, showing that many traders couldn't believe they might lose money, and "what do I do"....a few more comments from subscribers Friday:
"I am sure you are getting bombarded with questions so I am going to be keep mine simple:
"Since the market moved bullish a little more than I anticipated, should I be thinking about selling a higher strike put to maybe offset the puts that I currently own (8 puts at 13.85).

I am trying to think of ways to hedge myself and prevent taking a big loss.

Any thoughts?"

Floyd- Follow the rules. Take two buys, hold for the # of days stop loss, and wait it out.

"Thank you for your excellent market/trader perspective. I especially appreciate your "rantings" and recent dialog.

I am in on the May655p @ $11.50. This is my first buy. For future reference, do you think I should have bought a second buy at around $7.60 today?

Also, since the market stayed "afloat" does it give you more or less reason to look for a large move down, I think I am asking about difference between accumulation and distribution...but I am not sure...Could you elaborate?

Have a peaceful weekend!"

Thank you, D

Floyd - The market accumulates during upside, and distributes during real correction. Friday we saw a run up to 13,150 area, but an immediate correction, and a "hold" just above 13,000. Nothing has yet shown us that we have a strong upside, only that is May, institutional traders are accumulating, and that a false unemployment report (5% is crap...it's closer to 12%) provided a bit of false optimism.

"Thanks for the information on the Harpers magazine article, about how the Government has manipulated the economic numbers for their own benefit. Truly scary...

I was at the bank yesterday and the manager was ranting to the customers in line...."Gas is so expensive...we need to drill more holes in Alaska". I thought to myself....No you need to sell your SUV.

also....

Earlier I was talking with my friend's daughter who is attending a 4 year university in Southern California. Apparently her Economics teacher is telling her class that "We're not in a recession".

Later I thought to myself...man people are stupid. No wonder as a nation we're in so much trouble. I didn't always think this way, in fact I probably would have thought the same, before you started teaching me.

Thank you for your rants and teaching. My families life will be better because of it.” - M

From Mike Gibbons:
"Both the NASDAQ Composite and S&P 500 broke out from their double-bottom bases this week and simultaneously broke the medium term downward trend line. Both indexes gained for the third week in succession and have gained in four out of the last six weeks. The NASDAQ is approaching its 200 day moving average,
Why are the markets rising while the economic fundamentals continue to deteriorate and will the trend continue?
Firstly, we think the economic fundamentals are deteriorating despite the loss of fewer jobs than expected and the supposed fall in unemployment. The Fed's statement on Tuesday confirmed that further weakening can be expected and their move on Friday to increase the Term Auction Facility funds by 50% and relax standards for the Term Securities Lending Facility (TSLF) to include AAA/Aaa-rated asset-backed securities shows they expect the liquidity situation to get worse before it gets better. We have long held that the Administration and Fed would do everything in their power to support the markets this year and Bernanke seems to have found the silver bullet with the combination of interest rate and discount window rate cuts together with the TAF and TSLF loans. Loans under these facilities mounted to $413 billion by April 30 and will clearly go higher. Acknowledged writedowns on mortgage losses amount to at most $250 billion so there is a comfortable surplus of capital that can be put to work. It was intended that these loans be used to relieve the credit crunch but there is little evidence that is happening (in fact it seems to be getting worse so it's reasonable to assume that this excess is being invested in the equity markets rather than to expand credit. If this reasoning is correct, then we can expect markets to move higher until the perceived risk of lending money is lower than the perceived risk of equity investments."

From veteran trader, Bill, who did NOT panic on upturn Friday, some good lessons in Point and Figure, with Floyd comments returned to him in bold.
We educate the trader.

"A couple questions, looking at the info on the OEX, the weekly distribution indicates overbought by 45% and the midrange of 623.65 and the 50 dma is 623.90.
This is correct. Good work.

Same goes with the DJIA, overbought by 48%, midrange of 12462.
Yes, this would be the deepest bottom.

Is this a level that the index is likely to trade back too?
Yes, the OEX tracks the Dow perfectly.

I understand the overbought/oversold concept and as the level moves up the curve the potential for reversal is greater, my question is, what level of overbought/oversold are indicators of a potential reversal?
This is where I use the "count" method. When the moves get to 8 in my bell curve work, the market is showing signs.

Also looks like the indexes are very extended from the bullish support line another indicator of a potential reversal?
Yes

The fact that the X and O ranges are getting tigher an indication of anything?
Yes, we are approaching "trade range" where something could happen again. Note the market is trying to establish new upside above 13,100, so far has not held.

BTW, I enjoy your political and economic commentary.
Thanks.

As far as the 655 put trade is going, I have made multiple buys and sells already. On thursday, as I indicated earlier, I purchased at market tops 13,050. I did not buy at best buy, but @ 11.20 had partial sells at different levels had my @ 12 sell order filled. Option backed up, I bought again and made another sell of partials. My net position right now is 100 @ $9.889. I've already booked $5,300 in profits on the trade. The 640 Put trade earlier in the week netted $11,600.
Proof of how to trade:)

Plan the trade and trade the plan......
This is the key!

Market Gyrations and the Great Depression

2008-05-02T13:48:00.000-07:00

Recent market gyrations of 300 point moves up or down within a few days has not happened since the Great Depression. Remember this as you trade.

When the market begins to gyrate upwards on good news on, as an example, GOOGLE earnings (4/17/2008) and buyers begin to move the Dow to near 13,000 euphoria begins to build. For OEX option traders this is a great time, if disciplined in their studies, as WHAT the market does is irrelevant to index option trading. Unlike stock investments we are watching a short period, typically no longer than 21 market days, and recently, as quick in movement for 600 point moves in the market of 7 days.

Yesterdays' moves allowed us a two buy entry to the May655P.

We shared the fears of subscribers intraday after our alert, yet again trying to point out that this is option trading, thusly highly volatile, and is always high risk. When I do as well as I've done in my picks, note that I will fail us sometimes....it's part of the game. And...I don't think yet that it will happen on this trade.

April 23rd, 1999 was the first month ever to gain 1000 Dow points. Just think about this as you consider the massive moves that have been occurring in the market over the past 6 months. What has changed, and how can you take advantage of it?

Now, to teach again...it's best to share some afternoon dialogue we had with traders, which sum up well how I saw the market yesterday.
1. “Your email outlining the concerns of some of your subscribers is somewhat refreshing. I remember those days. Greed going to slaughter a lot of these guys who think you do nothing but win. Some of these guys you quoted in the alert are making bucketloads of money. I was telling Dave last night that, if these people choose not to follow the rules with exactness, the market is going to hand them their rear end on a platter. Although I think we are solid on the current trade, it is just a matter of time before some of these guys learn what I learned months ago - MANAGE YOUR RISK. No fear, no greed, just manage your risk!!!”-Advanced Mentoring Client, SK, Arizona

2. From Advanced Mentoring Client PC from Germany:
“Hi Floyd, Thanks for this. I had promised myself I would never send you a "what do I do now in panic" mail. I'm helped in this attitude by knowing that you will be cooly placing your 2nd buys, so OK. My whole approach is not just to do what you do but understand why you think what you think. I hope I always ask you to teach me what you think not what to do? If I can think like you I will have no option but to do what you do.

Floyd - understood and I will try to think and help here.

I have spent a lot of time over the last month working at pivots and improving timing and finished the day yesterday in far better condition and with confidence. I hope all your subscribers recognize that you could never teach it, it can only be learnt and all you can do there is give pointers and say "stay with it". Bang away at something long enough and it has to give. So, it is coming for me. I only ended up working one side of the straddle yesterday, it was an interesting exercise in emotion and attitude as it was the put side I worked yesterday. I did profit on the call the day before. I came through in the end yesterday and I could still see pivots at work. If they were at work today they quickly crumbled.

Floyd - We were caught up today in a semi conductor and tech rally, and institutional buyers taking new inventory. This type of play often happens around the FOMC

With paper loss approx half all April's gains after 2nd buy today, as I write, I will keep my head cool from your lead. Your penultimate sentence above is quite acceptable in principle but the possibility of loss on this trade is only brought about by the market continuing to rise rather than fall over the next 4 days, right?

Floyd - Right, and I think it unlikely. A shift downward has a 65% potential in my mind, before a stronger upside return.

This leads to some questions.

I haven't been able to see what kept the house market afloat for about the last 4 years of it but it kept creeping up those 4 years and, it seems in economics there is no gradual this or that, greed and fear have no grades? Reading all the bank woes during the end of 2007 beginning 2008 one could be forgiven for believing the only thing that's keeping the wall street suicides below the 1929 level is that there are less gas ovens around these days for people to get their heads in - what is pushing the market up now??!! Just opinion? Scraping down interest rates will only affect what comes after the decimal point.

Floyd - Euphoria. The market moves today will slow, as they did yesterday and moved back to the 50 day moving average, and institutional trades entering the fold. Semiconductors rallied, techs rallied, and the market took off.

Why the crash down late yesterday, then the push up today without the crash? Do you think anything to do with manipulation?

Reading about Wyckoff I wondered if the pretty much flat line from Monday to early yesterday (now also looking back to the first 8 days of April) were large operators accumulating? They used the interest rate micro-change yesterday (trojan horse) to place sell orders at stepped up prices and the market leapt. I could follow that line of thinking until the Dow dropped 200 points in 2 and a half hours on the same day. With the same leap up today, appearing even stronger than yesterday, apparently based on an oil company saying it had done less well than they thought but still good, I lost the thread. I would be with Wyckoff all the way on manipulation I'm just weak on the mechanics of it and am dying to improve on this one!!

Floyd - This is exactly right. Couple in the FOMC and what is bad news to the average bear, that they will now control interest rate drops, and the first moves down. Typically around the FOMC we see "exhaustive gaps" that are two way.

So, the 500 point drop is still on the cards djya reckon? Hold steady with the Put?

Floyd - Yes.

Is it the manipulation campaign "phenomenon" which would bring that about?

Floyd - Yes.

Did you ever have the opportunity of meeting Richard Wyckoff?
Regards – PC – Germany

No, my Dad was his sole licensee back in the 1920's and worked with him for many years. I only know what I know from my Dad's training, and courses that he taught.

All Calls and Puts Were Profitable

2008-05-01T21:50:00.000-07:00

The FEDS babbled, and we won!

All calls and puts were profitable, and we begin the day with no inventory. The market moved to highs of 13,050 before falling to lows of 12,769, right at our top resistance and first support lines.

"For the first time, I absolutely followed your instructions (90% of the way) on the May 630 calls. Bought at very close to best buy price (2x) and held to 23. It was so tough to hang on through the uncertainty of the day. I used the R3 number as my top and got out at really great profits. After 6 weeks of doing this, I can finally say I stayed the course and realized the profits I had been missing- time and time again by not following the subsets and sell prices. Granted, my trades had been profitable, but not like this.

Buying a signal service would not compare to this!! I did have to work for the trade, however I knew how and when. Thanks for your instruction"-R

And from another trader who writes:

"Floyd, two way trades again, profits of 25% both directions. Your Dow projections are like a science. I've learned to not listen to any talking heads, not read any bull___in the Wall Street Journal, and to trust almost no fact. I'm up 86k for the year. Thanks” -J L.

And another successful trader – RC writes:

“Sold all of my May 650 puts – no inventory
Bought @ $10.00
Sold @ $15.80
$29,000 profit

I will go fishing now and wait your instructions for tomorrow to make another $29,000

THANK YOU!”

In 2007 alone, American assets of 400 billion were sold to foreign buyers.

To date the Federal Reserve has invested over 400 billion in saving Bear Stearns and the New York banks.

It’s relatively obvious that the “paper” in the market (bonds, debt obligations, appraised valueless of assets) are quite suspect, and our Federal government is considering “controls” in place. Say this twice…the FEDS will put controls in, and try not to smileJ

We borrow 2 billion a day from Europe, Asia, and the Persian Gulf to continue the democracy build in Iraq.

Although “I’m always right” Bush is a large part of this mess, we can’t blame this on just the Republicans. The former Clinton “blow job” regime had a bubbled stock market that led to great excess, but they at least did not spend the money, and did balance the budget.

Credit cards will be next. Visa, MasterCard, Discover and all the credit card games are also filled with false financials, as the assumption of bad debt is another false paper game that will be exposed, as debt happy consumers will soon be unable to pay.

As gas approaches $4.00 a gallon, it’s relatively obvious that it is oil traders leading the game, not supply and demand, and with the Iraq bet for “free oil” (part of the Bush game) an utter disaster, and new cars still coming out that get 16 miles to a gallon, and selling….it’s clear this will yet again be a country that lets the horse out of the barn, and then closes the door. We never stop.

7 in 10 of cancer deaths in China are pollution related.

The current annual deficit of the International Monetary Fund is 140 billion. 8 of 10 U.S. voting citizens do not know what the International Monetary Fund is.

Lastly, another subscriber cancellation prompts more commentary. Trader “S”, who quit a few days ago, may decide to come back to us. All of your comments opened his eyes a bit.

But, trader “D” just quit, and in our inquiry why, his response was:

“A few weeks ago I emailed you with three questions. You did not answer any of them but you did rebuke me for not papertrading more. I was disappointed.

Your incessant political ranting is not instructive. A macroeconomic analysis might be more helpful. The current reduction in market volatility will make it more difficult to trade options. I have learned most of what I was looking for when I subscribed. Thank you.”

And here's my response:
1. I apologized if my answers were incomplete. (If I am ever unclear, please always write me again)

2. I am proud to nag everyone to paper trade at least 90 days. It's plain stupid to not do this. Tough.

3. I will ramble on politically. I wish I had done this years ago when Bushy was making us safe in Iraq, and first cutting taxes. 8 years later we're a complete mess politically, economically, and seem ready to elect the same type of idiots again. It's time to argue, and it does affect our economic longevity. Our debt is sad. We must begin to elect like stock traders, recognizing "false facts".

4. "Macroeconomics" is defined as: "The field of economics that studies the behavior of the aggregate economy. Macroeconomics examines economy wide phenomena such as changes in unemployment, national income, rate of growth, GDP, inflation and price levels. Macroeconomics is focused on the movement and trends in the economy as a whole, while in microeconomics the focus is placed on factors that affect the decisions made by firms and individuals. The factors that are studied by macro and micro will often influence each other, such as the current level of unemployment in the economy as a whole will affect the supply of workers which an oil company can hire from, for example."

a. Unemployment facts are falsified by the Government.

b. GDP facts are bull crap.

c. Six idiot economists in a room can't agree on whether we are in a recession. Bush knows we're not.

d. The entire study of a long term trend is like smoking dope in the White House. No long term trends can be identified at all in option trading, nor would we want them to.

5. Funny that this subscriber thinks we have a reduction in volatility. He's plain nuts. It's been the best and most volatile index option trading I've seen in 6 years.

This is a subscriber I could not help. He believes too much in what he reads, and doesn't agree on what really does influence the market.

The FEDs Babble

2008-04-30T15:46:00.000-07:00

The FEDS babble is announced today. It's possibly already priced into the market, and it's in HOW the FEDS tell us what they WILL do in the future that defines how the market will long term respond.

Bernanke is in a tough spot, and will probably have to act like Volcker did in, and be careful to not CREATE inflation. The USD has risen in the past few days around what the FEDS may announce.

We suggest we'll whipsaw trades, tops, and bottoms. In what order....who knows, as the market is now driven by FED fear.
"All eyes are trained on the Fed's policy statement on Wednesday to see how strongly it hints at a pause in the easing cycle after an expected 25 basis-point rate cut to 2.0%," said Sal Guatieri, economist at BMO Capital Markets.

Economic data, meanwhile, may reveal that the U.S. economy is in a recession. On Wednesday, first-quarter gross production data may reveal the economy already has contracted. On Friday, investors expect jobs data to reveal another big drop in payrolls in April."

5/1 – First trading day in May, Dow up solidly 7 of last 9

T Bonds have had higher total returns than stocks in five of the last eight years.

Large stock cap stocks will show the most value investing over the next year.

The market is at its first level mechanical. When the S&P500 futures trades over a calculated fair value for any specific definition of time the floor and institutional traders are selling the futures contracts, and buying the underlying stocks.

Want to truly study the market, and learn stocks with us? It's this kind of information and fact we teach in www.bluechipoptions.com

And, to help us all study, a few testimonials:

From B in Indonesia: “Floyd, as today Dow (is) playing on the baseline, and Bush live speech didn’t do anything, (I thought) I'd better write to you...
Remember below email from me in early 2008?

Yesterday, I just paid OEXoptions for the 2nd time, for the following May subscription. (Subscriber is Level 2, paying monthly, began subscription in April)

For the April trading I got back ALL my last year Loss only in one month..under your guidance..plus 50 % more profits .. with just only 1 or maximum 2 OEX contract I played...

Reason I play with only 1 or 2 contract(s) ...
- This is the test drive. I should learn your way, your writing style.. and to get used with market mechanism
- the most important is My money management is only allowed me to play with 1 or 2 contract(s) , which I know, in the future along with my growing account, I can adjust (with) more contract(s). Best regards - B

(and B’s earlier email he referenced above) …

“I am rather interested to join your service, however still have some questions to ask

I'm new and still learning, read a lot of books and view dvds
but no success in trading. I started option trading for $ 2250 in Optionxpress, and go up to $4500 in 2 months, but after that being wiped by the market, leaves me about $ 350

Floyd - You began trading too soon, in our minds. We teach paper trading for at least 90 days.

I never subscribed to any advisory service cause, all forum and blog said it's only sucking my account ... , however I still want to try one...which also give me some education in trading..., "not only give a fish every day".

Floyd - This is very true for most services. We teach how to trade, and are an educational service.

As I had only small amount of money, Is it appropriate to start again for about $3500, (because from what I read, better investment is about $5000?

One more question about low investment start … $3500 can it cover monthly subscription fee... ?

Floyd - We suggest trading with a minimum of $5000.00, and "paper trading" first for a period of 90 days

From another Trader in Colorado: “2 scalp trades on the put signal today following S1 R1 and recalculated R1 S1. In @ 8.30 out @ 10.20 - In @ 8.20 out @ 9.20. Continue to take quick profit when available. 12 in a row! Will not trade tomorrow. Let FOMC babble settle and revisit Thursday.”

The Real Unemployment Rate is 12 Percent!

2008-04-29T15:47:00.000-07:00

The real unemployment rate is 12%. The official unemployment rate is under 5%. The real rate includes workers who are part-time, or marginally attached, and discouraged workers, all true definitions that the government really has, and monitors. But, instead, we track the “official” rate. When the true rate of 12% is analyzed we can begin to see what the economy really is. If we are able to also track the percentage of American workers earning minimum wage we can begin to see the real effect on the American economy, and how much of the wealth is “with the few.” The former Clinton administration led the “twisting” of unemployment numbers, and this was also led carefully by Greenspan.

Opacity is a Scrabbles word, but becoming much more real to economists as they analyze the collateralized debt obligations (CDO’s) around financial institutions. CDO’s have opacity, where their hyper-technical securities were fraught with dishonest labeling, or inflated values.

These false facts also hold true with the Gross Domestic Product (GDP) and many economists now argue that the recessions of 1991 and 2001 were much longer and deeper than reported. In fact, there were downturns/recession in 1985 and 1995 that weren’t even counted because of how facts were manipulated, and in 2008 we continue to watch the government argue whether we are really even in a recession.

So, if the real numbers show unemployment from 9 to 12%, an inflation rate that is really 7 to 10%, concerned voters and citizens should be considering WHY this data is not accurately reflected to us. Some economists rightly believe that the government re-calculation and suppression of this key data could hugely affect us.

For every dollar of income earned the average German saves 10% of it. For every dollar of income earned in the U.S., it appears we buy a $7500.00 plasma screen TV.

Floyd thinks credit card debt will be our next "exposure" of fraud, and be more long lasting on its effects on our financial institutions. It will be hard to get the FEDS to be our enforcers, however, as they are doing really well with the FEDS own credit card, our U.S. Treasury.

Also, a number of responses for poor trader “S” that is leaving us, one which I think articulates well how we trade:

"Floyd, I'm a structural engineer with a masters degree, I work full time in an office.

My rules for trading:

I read your update 3 or 4 times before I open my real time charts.

I do my OEX and Dow Pivot, Support and Resistance levels, then put all the information on the charts especially the Dow Projections.

I know what the PF chart levels are.

I have a watch list of quotes that include the recommended option the opposite and few others around the recommended.

I do not buy first thing in the morning, for obvious reasons, usually wait till after 10:30.

I put multiple buy orders at different levels starting small at the 1 line and larger at the 2 and 3 lines.

When filled I look to sell quick, depending on how large of a trading range the market is moving in.

I've made profit from scalping $0.50 and $1.00.

I used to look to make money on the entire move, now I just take profits from a small part of the move.

As soon as my buy orders are filled,
1/3 to 1/2 sell $1.00, another partial at 20%, and a smaller partial for a homerun, subject to change depending on market conditions and my tightness of my sphincter (sp).

Since employing my 50 cent and dollar profit taking I've notice a more calmer trading day, and a larger trading account. I have 2 accounts and since I've been with your service, I've had my ass handed to me in December and January and made it all back and more in Feb, March and now April. One account is a rollover IRA, is up 40% since the end of February when I started trading it. The other account is a smaller account that up 100% since February.

One last thing, if I haven't had a chance to look over everything, I DON'T TRADE!!!!!! I Don't Chase!!! Keep up the good work. Regards,” B

Positions could have been taken yesterday on the May640P, at 7.70.
The May 630C was not available at best buy for a new position, but remains open, hitting a high of 21.20

Straddle traders in advance of the FEDS babbles today and tomorrow...remember, it may be necessary for a larger second buy on both positions, and QUICK sell orders put in for tight profits.

And for a bit more fun, an email from Trader B on the trades 4/28:

"Floyd: Waited till this afternoon to trade the OEYQH.
buy filled 100 @ 7.9 time 3:06pm, multiple orders
sell filled 75 @ 8.5 time 3:30pm
sell filled 25 @ 8.9 time 3:54pm

$7k in less than an hour. Nice way to start the week."

Lastly a note from trader RA…

“In the May 640p @ 7.90 out @ 8.80. Quick 11% in 1 hr! Figured take the profit and run. Why stay in overnight with FOMC babble tomorrow. 10 in a row!”

For traders wanting clarification on our alerts, here's step #2:
2. Study the market conditions (News, economic calendar events, price of oil, gold…are all catalysts that lead the OEX and DJIA directionally.)
Upcoming Events/News: http://www.bloomberg.com/markets/ecalendar/index.html
(Stocks react to news irrationally. Each morning, study the news.)
Futures: http://bloomberg.com/markets/stocks/futures.html
(Futures help you gain a “read” on market sentiment and how the market will open. Use futures, in addition to reading the tape (9:32 and 9:35 am close of Dow reading) and the pivot point for that day)

Studying Fibonnaci:

Fibonnaci lines help us draw a retracement, the support or resistance areas where prices are likely to stop and reverse back to the direction of the trend. These areas can be 61.8%, 50%, and 38.2% from the nearest high of 100% or from the nearest low of 0%

Fib advocates see that any percentages above 100% are either extensions or projections of the likely price targets. Fib lines are drawn from the recent high and low, retracing back 50%, and proceeding to a projection of 127.2% and 161.9% from the 50% line.

Floyd's Question of the Day: There are 20% of Americans that continue to think Bush is doing a good job. Why? :)

The tax rebates are on their way. The economy will burst out now and all is well:)

Study the Economic Calendar

2008-04-28T15:43:00.000-07:00

Study the economic calendar carefully. It's a week of data, and opinion. The FOMC boys babble Tuesday and Wednesday. Many believe the considerations of the FEDS are often now factored into the market, but no matter what, it's likely to show two way volatility.

What if we all truly understood that the rising cost of pensions, benefits, borrowing and interest rates were exposed with real data? Interest rates would soar, and the public and private debt that has been building so hugely, bolstered up in the recent past by the housing bubble, would be even more exposed.

Meanwhile, we discuss whether Obama understands the American people, or whether McCain believes democracy in the Middle East is our long term responsibility.
All is not as it appears, and it’s on purpose.

The U.S. uses 7.6 billion barrels of oil each year. There are 4.3 billion barrels of oil in North Dakota and Montana that could be retrieved using current technology, according to a new survey by the U.S. Geological Survey. This amount is 25 times as big as the original estimate in 1995. On first review the reader will say “ we get the oil from our country!, but on a closer look one realizes that we would deplete all of these oil reserves in one year, strip mining the states, and only provide 56% of one year of our usage.

This is truly how a false fact can be “retrieved” easily by a gullible public, and only analysis of the fact proves the logic behind it.
30% of all employees nationwide do not sign up for their employer's matching 401K plan.

We'll start the week with several commentaries from subscribers, all unsolicited. First, when a subscriber leaves we always ask why. There are three reasons almost always given for a cancellation:

1. I will come back when I'm ready, with capital. I like the service.
2. Not what I expected. I do not have the time to watch the market, and want just buy and sell signals.
or, something like this from a subscriber:
"In a nutshell, I couldn’t understand with a decent level of confidence, how (to) trade in a ‘Floydian way’. Note that I studied both websites for many weeks, have years of options trading experience, am an editor and technical writer, and have a MCS in computer science as well as a PhD in psychology. I found the writing on the sites indicative, yet it didn’t give me adequate guidance in the procedures and decision making. I almost offered to rewrite it so that I could eventually understand better." S

And at the same time, these comments from subscribers came in:

"Floyd: Nice call today. OEYQK. Had buy orders in 15 at 16.4
Put a sell order out for 10 at 17.4 filled, bought 15 more at 16.4 after the 10 were filled at 17.4
And 20 at 15.2

Sell orders all filled

5 at 18.4
10 at 17.4
20 at 16.8
5 at 16.5

Net $6,250 in 3 hours. Net $4,400 on Monday OEYQH that was purchased on Friday ‘- BD

"Hello, Floyd. Man, you are incredible. I'm serious. I don't know how much of an ego you have (if any)... but wow! That's all I can say. I am amazed at how close to today's top you called the May put. Unbelievable. You do it constantly all the time, which is absolutely amazing to me. Please tell me that with what we learn from you we will one day be as good as you? :-)

S and I scalped 4 contracts twice off the entry price of today's alert for $800.00 today alone and we still have one option hanging for tomorrow. I honestly, in my heart of hearts, hope to be as good as you one day... I mean that, Floyd. You deserve all the accolades you get for all the people you help learn this stuff and as good as you are. Thank you, and I sincerely mean that.

As you asked from my email yesterday, I attached the chart I made my error on. There are a couple circles drawn on it for reference. Please review it and my explanation below in blue and teach me what I did and didn't do right or wrong here. I have my own assumptions but I do not know if they are correct or not. Thank you, Floyd”. - DS

"Already bought and sold the put (16.20-18.80). Still think market has room to top to dow projections. Waiting it out for now. Do you have any open positions?

Simply scary how you chose that call this afternoon. I could not get in
until 18 because I missed the 16 window. Did you get that strictly from
support and resistance subsets?

Wow! 9 profitable in a row just following signals, support/resistance and dow projections. Learning to keep it simple and take profits when available. Bought the mid-day signal and averaged nearly 20% profit on sale of all partials."

There is a lesson in the above. No matter what the education or background, I do not believe any trader could learn our work "in a few weeks of study". I believe despite being an "editor" or "educated" that the subscriber canceling needs my help in explaining the lack of complexity in our alerts, and although S may be leaving, I'll be outlining section by section over the next few weeks just what each of our 8 steps means. Sorry to lose you, S!!!

Richard D Wyckoff

2008-04-25T16:15:00.000-07:00

From DY – “Hey Floyd! Nice Alert...Got in May655P @$15.50 and sold @$17.70. Everything looked really good to hold position open to tomorrow but I decided not to be greedy! Thanks again”

The Dow projections are key. Yesterday we advised that the highest top would be 13,110, with a top at 13,050 likely. At intraday highs the market hit a theoretical Dow top of 12,982.

Although upside remains likely around the upcoming FEDS announcement next week there is a good chance that upside is already being priced into the market.

No real news that is triggering upside is that good. We see this as a good, but perhaps short bull run. Early afternoon we issued an alert for the May655P, and were able to buy at 15.60 and less in less than 15 minutes. This is a first position buy to a contrary hedge currently ITM that we'll hold prior to the FOMC announcement, and look for several types of profits. It was fun to watch, as the position hit sellable highs of 18.40 within an hour:)

Calls may still have upside, and we'll begin a buy on an OTM May call soon, noting yet again we believe this is an overall very high risk trading market.

I was trained by a Father that was trained by Richard D. Wyckoff, the famed 1920's Wall Street trader. Dad taught me much of "the composite man," and within all my studies, and proudly cynical views of how the market is typically studied, so much reverts to Wyckoff. Investors Business Daily (IBD) and William O'Neils great book How to Make Money in Stocks is all based on Wyckoff.

Further, take the time again to study a bit of Floyd's use of Fibonnaci retracements. Some traders in our Advanced Mentoring service are working with us now on using Fibonnaci extension levels. We use 138%,150%, 161.8%, and 200% as extensions in comparison with the classic Fib retracements.

The ridiculous...

2008-04-24T23:03:00.000-07:00

Just for fun, I thought I would share the ridiculous:

"Chief executive officers in the financial-services industry think the economy is in or will soon be in a recession, but they believe the Federal Reserve is handling the credit turmoil fairly well.The Financial Services Forum, a group of 20 CEOs of financial-services companies doing business in the U.S., Friday released a survey that shows chief executives are increasingly pessimistic about the economy's prospects. Respondents on average placed the likelihood of a U.S. recession at 88%."

It's good to hear these brilliant businesspeople, leading an industry led by GREED, and false financials, and they are now predicting a recession. Emperor Bush is still analyzing a "soft economy", and defending a war that has cost us more than we can imagine. These are the leaders that we follow, those that hedge funded even wealth accounts (Citi), and literally hit bankruptcy sell off (Bear Stearns).

Elect smartly. Do not listen to false facts, rhetoric, or more importantly, "happy thoughts". We are in a recession, and have been since October of last year.
Sigh.

Today we are attaching an 18 page study in our Blue Chip Option password protected area, Floyd's Cheat Sheet on using point and figure charting. This is a simple "book" of how to chart.
Study. You are who you decide.

We're hitting a true stride in profitable trades right now and are thusly suspicious of ourselves:). We count 21 for 22 trades profitable and strong results at www.bluechipoptions.com All this means is that Floyd's methods do work, be patient and learn and study.

The market yesterday moved right with Floydian logic, hitting our Dow tops, allowing May630C profits from buys at 14.70 yesterday to highs of 18.40 before noon. At OEX 640 we saw retracement to 635, right to our support lines, and allowed astute day traders to....

“Floyd, bought 630C again. Sold it at 17.90 in the a.m., from a 14.70 buy yesterday, bought it again at 14.70 this afternoon and just sold for 16.30 You are on a serious roll. I've hit 22 straight trades with you, unheard of and I even kind of understand this stuff more now. Thanks”-GW.

Watching Drops in the Market

2008-04-23T16:46:00.000-07:00

April, 1999, was the first month ever to gain 1000 Dow points

WATCHING DROPS IN THE MARKET

The ten largest one-day drops of 2007 have averaged 326 points. In 2008 this appears to be averaging closer to 456 points.

If the average one-day drop is 326-350 points, a cyclical downturn may now be averaging just over 600 points. The large one-day drop tends to be more than the entire cyclical downturn.

Whipsaw begins whenever the market begins upward moves of over 100 points. Typically there is a large burst UP, a slight retracement, and then upside that averages 170 points from the lowest downside. The total move UP, after the whipsaw begins is a call bias that can upside 450 points overall.

If the market drops 326+ points, and after it has dropped further, typically up to 600 points, the first buying is now 100 points or more. The first upswing may be hesitant, over a day and half, but then average 170 points.

As the market rises deduct 50% to 60% from the overall rise. (If the market has moved up 150 points, it’s 75.) Wherever the Dow is right then is a place to potentially buy a call - between bid/ask.

Ex: After a drop, the market is at 13,820. It rises 150 points. 13,820+150=13,970. When the market moves back 75 points (half of the rise), or to 12,895 it’s a good call entry spot.

Assuming the trader buys at 13,890 during this whipsaw period we would add the first day of the initial drop (the 326 to 350 point moves) and 170, where the upswing average.

Ex: We are buying at 13,890. 326 +170 = 496 points. Using averages we’re then suggesting the top of the market might now be 14,386.

This same formula is what we’re now studying with all large market moves. It’s used in conjunction with support and resistance and ATR. ATR, on large swing days, should be recalculated intraday.

From an Advanced Mentoring client:

"Floyd,

Your commentary in the OEX alert was well overdue. Thank you for finally saying something....and saying it loud and clear. I got so tired of dealing with many of the OEX subscribers that I talked with via IM (along with others that we both know) blaming you instead of taking responsibility for their trades. And now you are on a streak of 19 of the last 20, and where are these guys? Still churning and wishing they had stuck it out!

Taking responsibility has been key along with learning. REALLY taking the time to LEARN has been key and has changed everything for me. Finally fun again. BTW, great profits on the puts!

Thanks," - S

Yesterday the market bottomed at 12,616, and may have an additional 100 points of downturn. Whipsaw and "bets" historically now trade the market in advance of next week's FOMC meeting.

We took first entry to the May630C at 14.70 first buy. We'll not continue to trade the put and will issue an intraday alert if conditions change.

When a New Trader Begins

2008-04-22T22:16:00.000-07:00

When a new trader begins with us I watch carefully for their emails and questions. Although at first I may not "know the subscriber", or the person's issues, soon, within the subscription period I can begin to recognize the type of trader. Who are you? Here's a type of trader setting themselves up to fail, and that will not last:

*Does not read any of our password protected material/manual or articles.

*"Browses" the rules and Floyd thinking

*Immediately begins trading, waiting for the signal provided, and writes right away with questions on the first trade that begins to go the wrong way

*Begins questioning "bad advice" or "why did you say it sold profitably, when I could not sell it"

*Loses a great amount of money quickly, and gets angry

*Makes a great deal of money, is ready to become a full time trader and quit their job because it's so "easy", and then loses three times their original gain and is devastated and says "option trading is not for me"

*Tries us for 30 or 60 days, says "it isn't what I expected" and quits

Is this you? If it is, you are at fault, and you will fail. You will fail at any stock or option trading method or system you try, and you will always blame others.

Stock and option trading is a high level skill that over 80% of individual investors fail at, and always it is the trader's fault. If this were easy:), everyone would do it.

This is a high level skill that can be learned, but must be learned....not simply traded.

You are who you decide.

Investors in today's market must carefully study our bell curve analysis count.

Seldom before have 300 point moves occurred two or three times in a week. There really are only four movements taking place: 1. Oversold 2. Overbought 3. Clear bias 4. Limited flat bias

Puts were profitable to 14.70 from Friday's buy. Calls were available at best buy and could have sold to highs of 3.60. We'll leave both signals open for today's trading.

Events Will Trigger Movement

2008-04-21T18:56:00.000-07:00

This is the same URL to the economic calendar we include in the morning alert:
http://www.bloomberg.com/markets/ecalendar/index.html

Astute traders with our service STUDY our alerts, and KNOW that events will trigger movement.

The market moved up in pure euphoria on Friday, showing why old Floyd could not read the market. Good old Google, a holding we have in Blue Chip Options (www.bluechipoptions.com) had excellent earnings, yet again displacing the "experts" opinions, while Citi showed 5.1 billion in losses, yet less than analysts had projected, and the market skyrocketed.

In early afternoon risk traders followed a new alert for a first buy at 12.20 or less to the May 640P, with buys made immediately at 11.70, and possible sales to 13.70 within two hours.

Astute traders took tight profits and ended the week with another nice gain. If you bought, and missed this gain, remember two things:
1. Our sell prices are recommendations of TOP sells. Always look for taking fast profits. Where else could one return $3.00 a contract, 25% returns, in less than two hours?
2. There is ALWAYS a chance to buy again.
Never fear, if you bought this higher risk trade...there will be time, as although it's likely now for more upside in the short term, all is not well, things are not better, and we are merely in an "upturn" cycle.

"Hey Floyd, Nice alert! Got in the May640P at $11.60 and sold at $13.30. didn't want to hold open over the weekend. Thanks.” - D

"Joined Level 3 four months ago. Paper traded for 90 days. I have profited over $9k in the past month, and after finding you realized that I've spent way too much money in the past buying signal services and failing. You are truly a mentor, feel free to use me as a reference. Thanks” -B

Now, is this a bull market rally, OR a bear market rally? The key question. Floyd remains suspicious. There is no real REASON for the rally. Fundamentally, nothing has changed. From a technical standpoint, Mike Gibbons, the Hawaii breakout trader analyst, says it well:

"The markets gapped-up at the open twice this week (Wednesday and Friday) and delivered accumulation days on each of them. A gap up often indicates a bullish change in sentiment so it’s possible that this week marks a real turnaround. Another indication that there may be mood shift is the number of breakouts seen this week. The successful breakout count jumped to 30 after just 12 last week and an average of 14 over the last 13 weeks. This was the highest number of breakouts for the year. The average gain by these breakouts until Friday's close was 5.15% compared the gain of 4.9% for the NASDAQ Composite, 4.8% for the Russell 2000, 4.3% for the S&P 500 and 4.3% for the DJI.

Friday's gains were significant but constrained by resistance at 2419 for the NASDAQ and 1396 for the S&P 500. We commented two weeks ago that the major indexes were on the point of a double-bottom breakout and that remains true for the NASDAQ, S&P 500 and Russell 2000 while the DJI, led by energy stocks, did close above its pivot this week. Due to the influence of energy on the DOW this breakout is suspect until the broader market follows-through. A breakout above the respective pivots for the other two indexes would be a further indication that the current rally has legs. We would like to see higher volumes though. NASDAQ and Russell 2000 volumes have been anemic and have barely reached the 50 day average even on accumulation days. DJI and S&P 500 volumes have only been marginally better"

Too Many Compliments

2008-04-18T23:29:00.000-07:00

Yesterday the market hesitated again because reality set in. Our profits have been solid 17 of the last 18 trades, and we've hit all Dow projections.

So many compliments have come from subscribers that I know the risk is higher. By this I mean that the bias is now so unclear I am now guessing, and when I begin to do this, I know the risk is higher, and our chance of loss greater.

Friday is historically more of a down day. It's not wise to hold a May option over the weekend with time erosion, and I personally am uncomfortable recommending any new trade.

Our higher risk call trade yesterday was profitable for an average of 1.50 a contract, but very light trading, and only for traders watching the market carefully.
Interesting commentary from a new Level 3 trader says this well:
"I could have bought at $6.80 and sold at $8.70 at day’s end, though you are right probably wouldn’t have waited til day’s end.

Doesn’t it make more sense for us “still little guy” investors to NOT trade in a “non-bias” tight market like today and wait for better more-indications markets to be more sure. . . . ?

If I would have bought 2 contracts today and risked $1300 I would have made $150.
I made $500 on ALY while I watched. . . . Asking.” - R

And, from a day trader:
"Hit 1.50 on the call, and got out but the market simply too flat. I'm out"-PW
Sorry, all, but it's time to fish. No new trades yet.

Good Old Euphoria

2008-04-17T20:02:00.000-07:00

Ahh, good old euphoria. Everything is better now:) The bulls began the run. Nervous traders that bought with us last Friday on the May 620C were finally able to sigh with relief, as the option went right to our top projections for over a 60% return, selling to highs of 19.20.

It does not matter what took the market up, or what the talking heads will say. Astute traders knew already that the market was potentially near a bottom from our Dow projections, and that there were several possible moves up.
Yesterday we hit 12,675, above our midrange 12,560 top, and below our 12,780 higher top. Upside could well now continue, but just as soon as we've read what every talking head and child financial analyst has to say the market will shift again, and we'll hit new lows.

Nothing is better, and nothing has changed. It's simply in how the market breathes.

"Floyd, I have learned to not even think about what the news says,and I religiously follow your projections on the Dow, recalculate the support and resistance lines, and keep my emotions out. I'm profitable now 17 of your last 18 recommendations.”
JP, Denver

"My winning streak continues. It’s been nice. I now understand my issue was not trading, it was my belief about money. Now that I am trading 1 or 2 contracts at a time, I have no problem holding for profits and letting things come to me. When I was trading 40 contracts I was always on edge and eager to preserve that which I thought I had. Now I just need to work on my belief that its OK for me to make lots of money, and its no different trading 1 contract than it is 100. I will continue trading and learning. I did actually play the put on the time prior to this that you said you missed. I just used the same concepts you have taught and just felt within that range that we were due for some downturn. I am also now looking to take entry into the put soon as we are now midway through the DOW projections. Thanks for the knowledge."
-Trader PC, Advanced Mentoring

What's next? With the count now biased irrationally to the call market moves upturn could continue, based on whatever "news" and "earnings" affects the market. Thusly, the market remains very high risk to trading.

Our higher risk put trade recommended earlier this week was sold profitably Monday and Tuesday. Traders should NOT have taken inventory in this signal in yesterday's trading if watching futures.