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Are The Bears Back?

Oil prices dropped again. The indexes dropped as well on lighter volume. Today we had a correction in which an opening for a new market leader sector became available. Are the bears back? Trade cautiously tille a trend develops. Click here to get today’s free options advice; have A.J. explain option trading to you in everyday language.

Hey trading team,

This is A.J. on Thursday, October 20th with your Trading Trainer web log. We are your home of market insights for the serious options trader. This web log will cover the events in the market from today as well as prepare you for watching the market tomorrow.

So, what happened? Why did the bears come back out? Take a moment team and do an investigation. Let me give you hint. Look at the commodities. Look at raw materials and energy stocks. They pulled back significantly today.

The large cap leaders were composed for the most part by these commodity related companies. So, when they took a dive today, so did the broad market. But look closely, especially at the latest update of the TradingTrainer.com watch list. If you look at just the number of advancers versus decliners, it wasn’t all bearish. In fact, technology stocks had some what of a good day.

So do we reverse our bias? That’s the million dollar question. At this point, I say no. Here’s why. Volume was lighter today telling me that the sell off was a correction. Also, by delving deeper and seeing that it was the commodity related stocks that were being sold off, that is actually something of merit if you are a bull.

See, we’re talking about the U.S. market here. And, for the last nine months or so commodity type stocks have been leading the broad market. That’s really not the U.S. forte. In fact commodities can really be done better elsewhere. The U.S. strength is in innovation and cutting edge technology. So, if anything, today’s churn in the broad market, a correction if you will can be seen as getting the U.S. back on track with what they’re good at. It’ll be interesting to see who the upcoming leaders will be now that this pull back occurred.

My Techne January 55 Call closed flat at $3.50 per option. I’m 42% into my initial investment after 16 days. Today I did some bargain shopping and opened two new long positions. I purchased Apple January 55 Calls at $4.90 per option. At close, the bid price was up at $5.20 per option. My return on invested capital is 6% already. Today, I also purchased Google December 310 Calls at $14.10 per option. At close, the bid price was down at $12.60 per option. I’m 11% into my initial investment already. With Google shares appreciating massive ammounts after hours on them beating earnings expectations, it’ll be interesting to see where the option price opens tomorrow.

Here are my recommendations team; we definetly can’t predict anything at this time. So, if this volatility is driving you stir crazy, play it cool and take a break. Sit tomorrow out.

However, if you have the insight to dig a little deeper, like we did today, to find out what was driving the indexes down and how that would affect our thought process, you can play this market strategically.

My thoughts… look long versus short.

Okay, team. I’m done.

Till tomorrow, happy market watching, trading and money making. Trading
Trainer is here helping you create your dream lifestyle.

Best regards always,
A.J.

Click on the below play button to hear the blog as an audio from A.J. himself!

Do you want to learn option trading? Full time options trader, A.J. Brown, reveals option trading secrets in his daily audio / video newsletter that are guaranteed to make you massive profits in less than 30 minutes a day. Visit TradingTrainer.com now.

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