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More Loss Today From Katrina!

Market down due to economics, debt, and
political positions. Katrina wrecking more
havoc on markets. May be a good day to
sell tomorrow. Get the latest at
TradingTrainer.com.

Hey trading team,

This is A.J. on Sunday, August 28th with your
Trading Trainer web log. We are your home of
market insights for the serious option trader.
This web log will cover the events in the market
from last Friday as well as prepare you for watching
the market tomorrow.

We had a mixed day of trading this past Friday.
Greenspan’s comments warning about painful
economic corrections having to do with the
housing markets, the skyrocketing debt and the
protectionism toward China that some politicians
are embracing, set the mood for a down day.
Throw into that a little smattering of a
Hurricane Katrina threatening all the oil
refineries in the Gulf and you’ve got a recipe
for yet another broad market distribution day.
All the indexes are below their 50 day averages.
The Dow is below its 200 day average as well. The
Dow on Friday also broke through an ascending line
of support and closed at a level of horizontal
support down at $10,400. Our bias, being set at
neutral, is still fitting but with an added
caveat: we need to refrain from opening long
positions based on trend following templates.
Until the broad market confirms a bias, our trend
following templates have been rendered somewhat
ineffective.

I was one of those that took profits on Friday by
closing my Premcor position. I sold my Premcor
September 75 Calls for $5.60 an option only
getting an 8% return on my investment after being
in the trade for 22 days. I also opened a new
position. I bought the Tenaris October 105
Calls. I bought those options for $7.90 each.
My Encana October 42.50 calls closed lower at
$3.90 an option. I’m in the black with a return
on my investment of 34% after being in the trade
for 35 days. My EOG Resources October 60 Calls
closed lower at $3.60 an option. I’m in the red
with a return on my investment of -42% after being
in the trade for 35 days. My Pacificare Health
Systems November 75 calls closed flat again at
$3.40 an option. I’m in the black with a return
on my investment of 17% after being in the trade
for 35 days. And, finally, my Quicksilver
September 40 Puts closed up at $2.05. I’m in the
black with a return on my investment of 28% after
being in the trade for 9 days.

This is my plan for tomorrow. I’m going to
seriously look at unloading from my portfolio.
After amateur hour, I’m setting limit sell orders
on options in my portfolio, good for the day,
setup to catch profit. I’ll watch Pacificare
Health Systems, Cerner Corp and Genetech with
respect to their Bollinger Bands. I again will
place limit buy orders for Calls to trigger
should price break above the Bollinger Bands and
a limit buy orders for Puts to trigger should
price break below the Bollinger Bands. Those
limit buy orders will only be good for the day.
Besides that team, I’m just interested in where
the broad market is going. So, for the most part
tomorrow, I’ll be watching from the sidelines.
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.

About the Author
A.J. Brown is a full time options trader, author,
speaker and consultant. Watch him review stocks
charts on video each week, listen to his audio
newsletter where he leads you by the hand through
the end-to-end process of successful option
traders and get tips and tested strategies proven
to boost your return on your invested capital by
massive amounts in his membership site at
TradingTrainer.com today.

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TradingTrainer.com Web Log

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