Thanks Jeff for the charts. Thanks for all your efforts. SFM

OXY and TM look good. Thanks for the heads up.

Can someone comment on DE. I am doing well with a JAN75Call (150 per split) that I bought, however I covered it a few days later by selling an DEC82.5 Call (165 per split). This reduced my delta more than I thought it would.

DE seems to be looking toppy on lower volume. Is this a volume divergence that is forming? I would love to ride that 82.5 back down to support.

Jeff/Bob -- Would you say short term support $85?

Thanks,
Calvin

UNP broke out with a cup & handle. It is said that that they are moving tons of MON, POT and Coal.

Earnings Jan 21. I've set a stop at $129 for a close-out, a 3 day continual move (or out), and target $150 (conservative), with a time frame of 90 days and out at earnings.

Jeff,
Did you mean LIFC or LFC? Because LIFC is a def. breakout.

And thank you for BGC and FSTR

Jeff, thanks for the triangle examples and the breakouts, working on my exits on these, would like to get in today.

Thanks,
Eric

Nice. Thanks, Jeff. Moved over from last post:

I looked through all greatest hits but couldn't find this info: when buying an ITM option for an S / R bounce, you mentioned in Case Study US Steel that you didn't buy the first ITM (ATM) strike b/c it had too little intrinsic value, too much time value.

My question: Do you have a rule of thumb here, e.g. at least 51% intrinsic value... 40%... ? Thanks for any input you may have on this. (I'm looking at an ITM put on CRDN, from Dwntrdg Stox w High MACD.)

Pleez excuse me. EVERTIME I TRY TO ENTER AT MID the MID price automatically gets move up. Why does this happen. Does the marketmaker see me entering my order or what...just venting...

With breakout of FLS why would the APR 90 put option volume be 10 times that of the APR 90 call, yet the Jan 90 call is 10 times volume of the Jan 10 put? Someone know something we don't? Guess this should be a short term play.

Sorry, ignore my post on FLS. Looking at wrong numbers.

J'Rene, the mid is halfway between the current bid and ask. When you enter a new order and do not hit the ask, you become the bid. So the new mid is between your bid and the ask. So what you are doing is waiting for a seller to come and hit your bid price. Since your new bid price is higher than the old bid price, the mid price between the bid and ask becomes higher as well.

Hope that helps you understand what is going on.

Jeff,
Would you consider AVTR to have broken out today? It broke thru the major support line of $42.50 yesterday but is bouncing up off a minor support line ($40) today. Although some of the ocillators are pointing down, there is some increased volume today on a somewhat neutral candle. Does this volume nullify the breakout?
Thx for your comment.

Thanks Trader JH, I guess I will just wait until it get filled. It almost feels like the marketmaker knew I was coming and they bumped up the price(crazy thoughts I know)

It is CRAZY trying to get in SCHN near close!

J'Rene - I have watched ISE on a number of occasions match both the price and number of contracts when I try to split the bid and ask (I really notice it when I am trying to sell between the two) and I am about 99% sure that it is done by their computers. The reaction time is just too fast (sub-second). You can watch this if you get access to OPRA real-time.

Anyone looking at XHB? It seems to be back up to a trendline for a good entry point, but I am curious about peoples thoughts of this recent surge due to the news. Any other thoughts?

J'Rene - I reread your post and I misunderstood with my first response.

Thanks for everything, Jeff.

AAPL question. I took a trade a few days ago, but the volume has me concerned. It's going down while the stock goes up. Do I overlook this and look at price alone because of the bullishness of this stock now?

Hey Jeff,

The brkt on OXY doesn't seem to have higher than average volume to my eyes--did you still hop in with a call? If so, what's your take on volume? Thanks!!

I guess we didn't see this bull rally coming? except for Trader JH.

Jeff

How do you see FSLR, it looks to me that it hit near the support level (30 day moving avg) and bounced today and could take about a 30 pt run up.

Rablesk,

I didn't see it coming but I listened when I was warned it was possible. I made a couple bucks today after taking a beating on Monday.

csiq

Jeff, would you consider reversal patterns like the 2/3 tops, head & shoulders, etc. short term or intermediate term reversal signals?

I notice a lot of topping formations seem to hit their target (if you are lucky) & then turn around & resume their trend prior to the reveral. Ergo, when it hits the target, get out & don't wait for the new reversal trend to continue.

DG- LIFC...I type too fast

Cassie- Was that question directed at me? If so I don't understand what you are asking.

SueD- No. A breakdown will be an event...the price will be down, the volume will be present, and the stock will be trading in new territory.

Laney- I'd worry about it if I were thinking about getting into the trade, but if you are already in it, defer to your exit plan.

Cassie- I took the trade anyway.

opttrac- I see it as an uptrend but might be leveling off with the rest of the group. A break below 213 or so and I am done with it.

Gumbo Ya Ya- Yes, I do see them as such.

Jeff,

I left an early message for you...What do you think of the volume of DE. In your opinion, is it loosing stream? Is this a divergence?

Hi Jeff,

My question is whether you have a rule of thumb for Intrinsic Value in an ITM option for a support / resistance bounce trade. (e.g. intrinsic value that's at least 51% of ask... etc.)
Hope that's clearer! Thanks!

I got into 4 of the 6 listed... before you posted.. (started to get the hang of this!) Got into FSTR yesterday, and FLS, ISRG, and CMG today just before close.

And I've been in OXY for a while, and double-down'd a week ago. The 1st play was a series of compounding mistake's, the 2nd was cost-average, but in both cases it appears I may have bought enough time for this to still be profitable.

Now... do a see a huge H&S on RIMM just waiting to break? If it breaks, how would you play it? (notice earnings in January too.)

What the hell? The blog says you posted at noon?

This just showed up on my RSS feed. HONEST...

I picked and bought before I saw this.

:D

Calvin- With DE trading at its highs, I wouldn't worry about it too much.

Cassie- No, I don't have a rule of thumb. Typically I go one strike in or one strike out, depending on the trade set up. I don't get to pick and choose intrinsic value ratios.

Hi Jeff,

Thanks a lot for your answers today. Follow up question, if I may:

Is it fair to say that a reason you might buy the second ITM strike for a BOUNCE trade is if the first ITM option is almost totally time value... ?

Thanks again. Learning lots.

GS is forming symetrical triangle... what do you think?

Cassie,

No...I wouldn't say that. I don't like to buy high delta options. Those hurt when you are on the wrong side of a price move.

Like I said initially...I normally go one in or one out.

Jeff,

You're still looking after us? You are the best. What are your thoughts on GOLD? Are you still bullish?

Jeff

I research Couble Bottomes in "Encyclopedia of Chart Patterns" by Thomas Bulkowski (and your vedio). Very interesting about distance between bottom and % rise between bottoms. Thank you.

Question - The book said "Confirmation price is said "A twin bottom pattern is not a valid doulbe bottom until price closes above the high between the two bottoms." Would you see that now @ 61.33 or would you wait until after 62.50?

Thanks
Gary H

Sorry Double Bottoms not Couble

Gary H

Jeff -- Do you agree?

USD/JPY -- looks like an inverse H&S on the yen. Is this showing an increased appetite for risk going back into the carry trade? This had been a MarketCast favorite indicator for market direction (usually seen in the FXY). You may want to put this one back on the radar.

Calvin

Jeff - sorry the stock is MER

You can also use ticker YUK to track the USD/JPY.

Hey all,
I'm new to posting but having been following this awesome blog for several weeks.What do you guys and girls think about CELG breaking through support at 60 and currently retesting it as resistance? Volume is average, though.

Jeff, after listening to Thursdays 7 minute cast, I am just broken hearted for the way it used to be. I guess I have to shut about it but really it was fun and I learned a lot. Can you ask those other guys to have a little more personality and not make everything sound so dull.

Thanks Jeff - I took a chunk of ISRG - nice!

Misner - CELG could be setting up nicely for a put but it looks like it might continue to run up before rolling over - I would wait a bit for a better entry point. Another way to look at it is I see resistance as the diagonal line drawn through the last two rollover points - I would want to see it hit that and bounce down - rather than relying on the horizontal support at 60 - which it hasn't used in some time.

Hope that helps.

Joe

Sniffin Tears,

I'm working on something that will out do the Marketcast. You will love it I promise. Be patient...stay tuned.

Jeff,
Whatever you do please keep in mind those of us who are not investools customers. :-)

I hope so Jeff. You two seem done with the current format.

I have to agree with sniffin tears. Miss the old marketcast. You and Eric helped me tremendously. It helped me define my style and risk management system. thanks. I will look forward to something that might "out do" marketcast. The other presenters on the cast are slowly getting better.

Can i get an opinion on CROX? Looks like it is breaking out of an ascending triangle but the volume is really low. Would have expected it to go up yesterday. Also, the AT at the bottom of a down trend would possibly indicate a bottoming of the down trend?

Thanks,
Steve

Thanks for your reply Jeff. I feel very happy to hear that. That makes me feel a lot better.

Steve,
I have never heard/read that an AT at the bottom of a down trend signals a bottom. I know Jeff has said several times that where these patterns are located within the trend is key. As far as I know, ascending triangles are only valid in an up trend. Also, as you indicated, no volume either.