Written by admin

Profit Taking After Yesterday’s Rally

Consumer confidence came in lower against expectations. Oil ticked higher on forecasts of cold north-east. The indexes closed lower on slightly heavier volume. Will we give back yesterday’s rally? Look for the indexes to maintain levels above psycological support. free options advice; have A.J. explain option trading to you in everyday language.

Hey trading team,

This is A.J. on Tuesday, October 25th 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.

Team, despite the less than stellar consumer confidence report and some poor earnings coming from HMO insurers, the broad market held on remarkably well to the gains from yesterday.

Today could be hardly called a distribution day. There wasn’t enough downward price movement. And, volume was only up slightly.

What looked like happened to me was, the market opened with profit takers looking to cash in on the price gains from yesterday. As they sold their shares, prices dropped and the broad market retreated. But, as the day rolled on, it seems like the bulls roared again and although they didn’t buy enough to keep the broad market from loosing, they did buy enough that the indexes for the most part closed only slightly lower versus really low which is where their afternoon lows were.

And, if the bulls showed up toward the end of today, then it will be probable that they will show up tomorrow morning and continue raising the market higher. We’d like to see the small caps lead again. In fact, we would like to see the DOW sustain above $10,400, the NASDAQ sustain above $2,100 (which it is) and the S&P 500 sustains above $1,200 – all psychological levels of resistance. Then, and only then, will we feel that the gains from Monday were permanent. Fair, team?

My Techne January 55 Call closed up with a bid price of $4.40 per option. I’m drawn down by 27% into my initial investment after 21 days. My Apple January 55 Calls closed down with a bid price of $5.00 per option. My return on invested capital is 2% after 5 days. I sold my Google December 310 Calls at $42.50 per option. My return on invested capital came to 201% after 5 days.

Here is my recommendations team. We need to look for the broad market to attain and maintain those psychological levels of support before we look to open any more long trades. Again, those levels are - $10,400 for the DOW, $2,100 for the NASDAQ and $1200 for the S&P 500. Till those levels are attained, for me, sitting on the sidelines is a really comforting thought.

For stocks in my portfolio, I’m looking to liquidate them at a profit using stop losses for profitable trades and limit sell orders for unprofitable trades. That’s my strategy for tomorrow.

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.

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

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 »