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Reversal Or Testing Rally?

Indexes lost today. Volume was light. Price volume characteristics are similar to ‘getting over hump’ behavior. Home builders admitted today that they are experiencing a real estate slow down. Are we experiencing a test of the current rally, or, are we experiencing a reversal? 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 Tuesday, November 8th 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, yesterday we questioned… Are we at the end of this rally? Today our question is… Are we just testing or are we going to go bear again?

In all of our index charts we approached resistance… those levels of resistance that we just haven’t been able to blow through yet, and, as is characteristic, we had a drop in volume and we rebounded off of resistance.

Now, what do I mean by testing. Quite often a stock will back away from a rally for a day, or two or three, to test and then proceed right on through. Is that possible in our case? Of course it is. How can we tell whether to stay in or not right now? We can’t.

It would be a treat if we could see into the future, right team? If we could get tomorrow’s paper, today. It would be the magic bullet. It would be the secret that Wall Street would pay millions for. We can’t. We can only trade based on what we see. We see a pull back. Our bias is now neutral. If it is a test and we start uptrending again, we’ll adjust the bias.

Is that a deal team?

My Techne January 55 Calls closed down with a bid price of $2.00 per option. I’m drawn down by 67% into my initial investment after 35 days. My Southwestern Energy December 70 Calls closed up with a bid price of $5.60 per option. I’m drawn down by 29% into my initial investment after 6 days. I followed my own recommendation from yesterday on my Google January 350 Calls and sold today for $52.60 per option. My return on invested capital was 98% after 13 days.

Here is my recommendations team. I’m in a holding pattern team till the indexes test the rally or build momentum on their current decline. 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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