I'll bid $25 for a piece of the OA IPO! What's a good way to jump into the gold market besides owning ABX?

Is there a reason you prefer gold to oil?

I'm looking at MON for an entry today. Its at horiz support...BUT, I'm wondering if I should wait and see if it's going to drop to horiz support at $104.
Anyone have a comment?

JH,

You prefer Oil to Gold?

I thought you never traded GOOG!

I have heard it argued that oil has industrial utility and gold is purely speculative with little inherent utilitarian value. I don't have a position in either right now.

I realize this is a bit of a fundamental argument, but with both making new highs I just wondered if you think gold has some advantage over oil. If I had to take a position, I would lean toward oil, but you can't argue with the strength in gold either.

Blake,

Rules are meant to be broken. Plus, it's only money :)

JH,

We could be on the cusp of a phenomenal argument here...I traded both through the end of last year, but holding onto Gold as an investment. I agree, it is speculative, but has been a rock solid investment.

VMC - broke out to the downside and I'm wondering if 65 is too optimistic a target. Thoughts please?

Jeff, it may be a good trade short term, but as a long term investment gold has underperformed stock indexes in nearly all time periods of more than 5 years. But you're a great trader, so I'm sure you'll get out with some nice profits.

DG,

VMC....Go to a 5yr chart and you will see a support level @ 70ish...if it breaks this than look for 65!

OT here:

I need some advice. I am a recovering long term buy em and hold em investor that is trying to find his way around the shorter term trading arena. The problem is I read a few blogs that all differ and I have not found my own rythm or style. In fact it seems that I have so much noise around me that I am trying to follow 3 to 5 different strategies and this isn't good for a type A, anal perfectionist that cannot concentrate on more than one thing at one time (ask my wife!).

This blog has quickly become my favorite but here's the help I need.

-What are the steps I need to take to find my own style? Do I take a class, read a book, dump all other blogs and just read this one?

I think the problem is in the end I want to learn how to fish for myself and not just sit in Jeff's boat and watch him fish. I get so many ideas from everyone here I cannot possible implement. I am looking forward to cintributing my own ideas here in time.

Thanks.

JB, Great question. I'm in the same boat.

JB,
This is a question that we all have struggled with. When it comes to options I have chosen The Wise One as my mentor and I have followed his teachings, drunk the orange juice, and built my own set of rules based loosely on what he preaches. But they are my own. I don't follow the way Jeff trades yet but I keep that on my horizon and fantasize about it when all the girls with margharitas leave me alone. I have dabbled with ITM options and OTM options. I have bought gold when Jeff told me to and sold gold when Catherine needed a new necklace. Some stuff works for me (like the new necklace) and some stuff doesn't. And I found that the only way to truly find what works is playing with your rules with real money. Paper trading was so easy I was a billionair in three months. Real money has a mind of it's own.

Study, study, study, and listen. The "drinking from a firehose" analogy has been used many, many times on this blog and it is entirely appropriate. All you can do is sit down, fasten your seatbelt, and hang on for the ride.

As I said to Catherine almost a year ago... some days I don't know if I'm going to pass out or throw up.

Don't know if this helps but it sure is a lot of words, isn't it?

I have 3 portfolios I manage with different attributes.

--The Wife's IRA is managed for long term diversification.

--One of my IRA's is a sector rotation type of portfolio with long term macro trends sprinkloed in think Gold, Water, Alt Energy, Agriculture ETF.

--The Third portfolio is what I am writing about. This portfolio I envision to be shorter term focused let's say as short as a week up to a few months or whenever a trend or price target is hit. I tend to follow to many things as well..price trednds, RSI, MACD, SlowStoch I seem to learn a new one and say ooh that's my new one. All this make sense?

For anyone that cares to care... today in my RRSP (equivalent to your 401k) I have three stocks. VIP, POT, and FSLR. All three were up today. In this account I am long term... looking to hold the stocks for 6 months to a year usually. Longer if appropriate. This requires a very different trading mentality. And the good thing is most people think I'm mental, so I have mentality to spare. And all kinds of different personalities so I can trade pretty much any way I want.

Comfortably.

We are a happy group today.

Jeff,

What say you about HON? It looks like a triple top to me, but can it be confirmed without a volume surge? I'm still plugging away at price patterns and would appreciate some guidance.

BTW, thank you for getting the watchlist back in video format. You are the greatest!

To JB & Peter:

I am finishing a compilation of "Jeff's Greatest Pearls of Wisdom". It is simply information taken 100% off of this blog that I am going to use to study with - only 104 pages so far. Just a few minutes ago I came across a great letter from Lisa that is pertinent to your question about our own trading styles. I suggest that you read it:

http://www.optionaddict.net/archives/2007/7/10/dear-jeff.html

I don't have the answer yet either, I am still looking for my style but I know that I can no longer try to just ride the coattails of others. Yes that does work, sometimes. But I'm ready to advance to the next level. I feel that I have all of the tools necessary to do this, I just need to connect all of the dots.

Best of luck,

Jim

2020
A very good point. You certainly can't sit on the coattails of others because no one can tell you the second to buy, which option, what target, and which second to get out. Everyone here uses the stocks that are thrown out on the blog.. and especially Jeff's but only YOU can figure out which option, which month, and whether or not the trade should be taken now, tomorrow, or next week... all of which will impact your profitability (or extreme lack thereof) dramatically. I think that everyone who's been on this blog for a while will tell you that the number one most important thing you can do is determine your own rules and STICK TO THEM!!!

Jeff,

I attended the last I-Tools Open House you did on Advanced Options (great job, but that goes without saying) and liked the idea of Synthetics to battle the issue of high IV. I have to say trading spreads does not seem to fit my personality – I feel it is just a little less interesting then watching grass grow. However, I want to make sure I’m not just gravitating towards the Synthetics due to personality issues and putting my account in greater peril for no good reason.

I will continue to trade some spreads as I realize they are higher probability trades, but want to know if leaning more to Synthetics in times of higher IV is a reasonable choice.

Thanks,

Denver

2020, Thanks a lot for the link. That was a GREAT post.

I've reached the point where I am starting to actually trade (paper trading went well, but if I lost, it didn't really hurt as much as a real trade loss would hurt). So, basically I am trying a little of Lisa's strategy (longer term) and a little bit of the shorter term trades. The hardest part (as everyone has mentioned) seems to be trusting your charting abilities. Those support/resistance lines seem to sit there and create doubt! After lurking on this site for a month or two, its easy to realize your weaknesses. Good thing my options account is basically play money!

One question I do have is for short term trades (under a month) what indicators to people like to use to supplement the basic support/resistance lines? I've seen the MA10 and MA50 mentioned in the past along with MACD etc. What is everyone's favorite? Why?

Peter,
My favorite other two indicators besides support and resistance are diagonal support and resitance. But that is just me!

Cheers,
Arty

Peter,

I only use trend lines (my own) and volume. I do not use moving averages or any type of oscillator. I used to, but I am more comfortable without them.

Jeff, GOOG to $1000, since I am in it, and gold as well. I dont care which gets there first, I'll be happy if they both go there!! GG was very nice to me today, as well as some other nuggets.

BOOM seems to be at a good REE. What do the rest of you think?

Thanks,
Doug

Jeff, this account will be an opportunistic account that will use both options and outright purchase of underlying stock. Since I expect the volatility to be higher than my other accounts I will adhere to reasonable position sizes. I will probably not want to have anymore than 10% of account value in anyone stock/option. This is also the smaller of my two IRA's, cannot be commingled with the current IRA.

Options interest me a little more than the underlying stock due to the size of this IRA. At times thought it seems like all my winnners are when I purchase the stock and the losers are the options. I digress.

I thank everyone here for their imput. I have really learned quite a bit in the last few posts. Some good stuff.

Doug,

Here is my chart of BOOM..

http://img252.imageshack.us/img252/5526/boom9mo010208nl6.gif

The lower high....a triangle setting up....possible HZ support at $57.50....certainly support coming in off the yellow trend line...H,mmm now where is REE?? Not saying you are right or wrong....REE is different for each trader....so I throw this chart out here for discussion amongst us!!!

If you got in at todays close, and tomorrow the price gapped down and closed at $57.50, what would you do? If your answer is get out, then you got in at your REE. But if your answer is you would hold to see if $57.50 holds, or perhaps see if the longer term yellow line holds, then you are not getting in at your REE if you got in today....

So, for me, I won't get in this trade. Does not fit my style or comfort level. But for others, this could be the perfect setup!

Anyway, thought this might be a good chart for discussion!!

Thanks for the chart, Raimo. It's helpful to see from your point of view.

Not sure my comment worked.. just a test.

I have a question.

Looking at the Dow I see what appears to be a Diamond top formation, the swame sort of formation you see with the Dow back in 1999 - 2000. It can be seen even more clearly with the Dow30. Should this be looked at as a warning?

Doug, Raimo et al,
I don't give a lot of credence to the yellow support line. It's getting pretty old and I think there's a new trend in town... that being the blue dotted one of Raimo's graph. However... that whole top thing is showing a lower high (although marginal... it could be an equal high given the right marker you use to draw the line) but to me it looks like the worst case scenario is a symetrical triangle with a $5 move from where it is now to where the next top would be. This should happen in the next couple of weeks so you could get away with buying a Jan $60 call. It's delta is .51 so a $5 move will pay just over $2.50 and it costs $2.48 to buy. This means you double your money...not a bad reward and with it being right at REE you can bail if it loses next to nothing.

Once again... a trade I wouldn't take at this point of my trading career... but I think there's potential for someone with something more substantial than my crystal balls.

I like BOOM as a long term investment. It's a well-managed international company (http://finance.yahoo.com/q/pr?s=BOOM) and the industry leader in a field with a high barrier to entry.

Jeremiah,
Not trying to ignore you... I just have no idea what a diamond formation is and quite frankly I'm not too concerned about which direction the Dow's heading. Today's results in VIP, POT, and FSLR show that the direction of the market doesn't necessarily mean what's going to happen to my stocks. Yes it's nice to know what... if any... direction the markets are headed but the stock graph is my main indicator.

Just my nickle's worth on a topic I'm not in much of a position to comment on.

Raimo, thanks for posting that chart. I took a trade in BOOM on Dec 18 when it bounced off support. I exited on the 27th when it not only failed to make a higher high, but also closed lower and with increased volume from the prior 2 days. A smaller profit than I would have liked to see but a profit nonetheless. I still like the stock but not here, not now. I have a primary trend drawn where you have your yellow line but I also have a secondary, more recent trendline drawn that comes in about about 57 now. I'd consider it then.

BOOM - My .02

The yellow trend line is not old, imo, but it is a stronger support level than the more recent blue dotted line. That being said...in the Murphy book he talks about new trends being formed at the point where the stock begins to take a steeper trajectory with a 3 point touch philosophy.

The blue dotted trend line could be an indicator of increased price momentum in the stock, hence it would be at REE. But I also do not like the slightly lower high. I saw this in many uptrending stocks I researched today.

The end result. I'd wait on this trade. Kim

Jeremiah,

Did you read about the diamond top formation on Tim Knight's site? He posted it there today. Just curious. Kim

Chris,
Thanks for your assessmennt. I have the exact trendlines that Raimo has. My exit would be if it fell below the current intermediate trendline. Are you saying you wouldn't take the trade until it broke out from the symmetrical triangle? I'm not sure I understand why you wouldn't take this trade? Why not go out to Mar 60's?

Raimo,
Thank you for your chart. If I see REE at today's low (58.90ish). My exit would be around $57.50. Why would you not take this trade?

What am I missing?

Doug

VA Beach Girl
Nope, I was actually over at http://www.trending123.com/patterns/index.html
looking over bearish, bullish patterns and just dumb luck that I noticed it on the dow so I looked back and found it again back around 2000.

Doug and Raimo,
Enjoying your chat about Boom, but what does "REE" stand for?

DC..... REE is a term coined by Raimo. It stands for "Raimo Entry Exit" point. This meaning that you enter the trade as close to your exit (support/resistance) as possible. This minimizes your loss if the trade fails.

Calvin

Sue D
Monsanto reports earnings Thursday morning--fyi

What is REE?

Doji Girl-
I am green, but see a trend here. The stock rallies 10pts then drops 15. If it continues like this, it will rally from 75 back up to 85 before the next big fall.

Doji Girl
The last post was re: VMC

FTK question for OAs or CEO Jeff-
Please help to read the chart and advise whether to merely dump this laggard or help me see a reason to invest in the downside. Thank you.

Hi-
Do you think NILE has broken the support and heading down?
Sam

Sam,

My two cents is that NILE retested old support / current resistance in the $73-$75 range last week and is heading downtown now. Don't try and catch it unless you like and enjoy the risk.

John