Written by admin

Oil Prices Hiking Up Energy Stocks!

Market closed fairly flat, except for energy
stocks Fed’s might pause it’s rate hikes.
Take a look at volume charts if you don’t

already. Get the latest at
TradingTrainer.com.

Hey trading team,

This is A.J. on Thursday, September 1st 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 today as well as prepare you for watching
the market tomorrow.

Today the market closed fairly flat. High energy
prices, even before Hurricane Katrina, have been
taking the wind out of a lot of sails; today, most
notably the retail sector. Energy stocks, just
due to the crazy high price of oil, gained. But
offset that with the retail sector losses and the
market moved pretty much nowhere. So, if you’re
short in retail you were happy today. If you were
long in energy, like me - for the most part at
least - you were happy. We need to be on our toes
because this situation, will come to equilibrium
quite fast and we need to have our exit strategies
in place or all these paper gains will vanish.
The market today seemed more interested in the
speculation that the Fed will pause its rate
hikes. In fact the market believes this story -
true or not. The short bond’s yield dropped to
below that of the Fed overnight borrowing rate.
The long bond was just about flat. This is an
interesting predicament that we need to watch
team.

Team, one chart I like to look at is one I call my
volume template. What I have is four ways to look
at the inflow and outflow of volume on a single
chart; the On Balance Volume, the Accumulation /
Distribution of Volume, the RSI, and a Volume
Chart with a 100 day average annotated in.
Generally, what we want to see is all four of
these charts to be in alignment with each other
and with price movement. Today, on a chart for
EXP I saw the following… Price was up today.
On Balance Volume was up. But Accumulation
Distribution dog legged down. RSI went flat on us
and volume dipped after yesterday’s spike. The
lack of alignment is a red flag team. A big fat
red flag

The point to this analysis team is that you need
to be leery on extremely high volume breakouts.
It is unusual that they continue. It is more
usual that they collapse on themselves. So if you
see that happen and you aren’t in the trade
already, stay away. If you get in long after the
break out you will be sorry. On the same token,
you can’t just assume you can go short after a
breakout either. It’s good to just bypass these
altogether for one’s that fit our templates
better. Unless you’re comfortable with loosing
more than gaining. But that really isn’t a way to
run a business now is it?

My EOG resources October 60 Calls closed higher at
$7.80 an option. I’m out of the hole with a
return on my invested capital of 26%. I’ve been
in that trade for 41 days. My Pacificare Health
Systems November 75 Calls closed higher at $3.30
an option. I’m out of the hole with a return on
my invested capital of 14% after being in the
trade for 41 days. My Quicksilver September 40
Puts closed way down even more at 20 cents an
option. I’m in the red with a return on my
invested capital of -88% after being in the trade
for 15 days. And my Tenaris October 105 Calls
closed up at a wild $15.70 an option. I’m in the
black with a return on my invested capital of 99%
after 6 days in the trade. Yehaw!

This is my plan for tomorrow. I’m ratcheting up my
stop loss alerts to trigger off the bid price
should either EOG Resources or Pacificare Health
Systems go below 5% return on my invested capital.
With respect to Tenaris I’m beginning my trailing
stop loss strategy at this point with a 15%
difference between bid price and where I start.
Team, I’m looking to close out of my portfolio.
There is too much speculation in the market right
now. I’m uncomfortable and would like to take my
massive profits and run. For the rest of the day,
it’ll be fun to watch the markets reaction to the
early morning employment data.

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!


About the Author
A.J. Brown is a full time options trader, author,
speaker and consultant. Watch him review stock
charts on video each day, listen to his audio
newsletter where he leads you by the hand
through the end-to-end process of successful
options 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.

* You may reprint or distribute this article as
long as you leave the content, the links and the
resource box at the end intact.

TradingTrainer.com Web Log

Categories: Blog

Leave a Reply




Video: Covered Call Writing  

Learn How to Write Covered Calls

In this series of 6 videos, I show you how to execute my covered call writing strategy from start to finish. Watch the first video instantly when you click for more information. Click for more »