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Resistance, Beat Or Retreat?

Indexes gained price. Volume is still light as key levels of resistance are being challenged. There is little economic news this week to stir institutional traders. What is the best strategy? Remain in a holding pattern till the broad market reacts. 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 Monday, November 7th 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.

What do you think team? Are we at the end of our latest rally?

You have to admit that we are on our way to levels of resistance that we have tested time in and time out before. And, as we approach those levels of resistance, our volume is decreasing showing less conviction.

Remember that human nature has people saying, “Wow, we haven’t been able to break up above level xyz before, so if I was smart I’d sell then before it drops again. I better place a limit sell order at level xyz.”

Now, team, what happens when we hit level xyz? All those limit sell orders fill, investors take their profits and shares are released in the market. There is concentrated selling with only scattered buying. Concentrated selling with scattered buying always goes along with price dropping. As price drops what do you think more investors will do out of fear? Sell to realize profits. You get a catch 22.

The only way to break through resistance? Have more concentrated buying then selling. Now, who can contradict the human nature scenario we just depicted? Not, you or I. If you said, institutional traders, you are correct. Will they do it this time around? Well… we’ll need to just wait and see. It doesn’t help that there is sparse economic news this week. Positive economic news is a factor in institutional movements if you haven’t noticed.

My Techne January 55 Calls closed flat with a bid price of $2.25 per option. I’m drawn down by 63% into my initial investment after 34 days. My Google January 350 Calls closed up with a bid price of $54.30 per option. My return on invested capital is 105% after 12 days. And, my Southwestern Energy December 70 Calls closed down with a bid price of $5.20 per option. I’m drawn down by 34% into my initial investment after 5 days. I was stopped out of my Apple January 55 Calls. I sold them today at $8.60 per option. My return on invested capital was 76% after 18 days.

Here is my recommendations team. I’m still in a holding pattern team till the indexes challenge and either beat or retreat from resistance. I’m simply going to focus on my own portfolio at this time.

Being flexible and being ready for anything is the name of the game this week.

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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