Jeff,

I agree that i need to move some off my Stock holding into more defensive plays, but do you think today is the day to make the move? Or should I wait until somewhat of a bounce?

My main stock i want to get out of is BA, because it has trouble in bad economic times.

This could not have come at a better time for me. If I can be completely honest, I began this trading year with *gulp* $1,100. Yes, I lost a lot of money last year because i was stoopid and acted like a trading maverick with no rules. Bad, bad, bad.

Right now I am up over 1,600, which is pretty good considering I have so little to trade with. I have shortened time frames, am completely diversified and am following my rules as if you were standing over my with a heavy object ready to bonk me on the head. I am dtermined that this will be the year I learn more and lose less.

I hope this encourages someone, although I simply can't imagine anyone else here has a trading account as po' as mine.

Thank you, Jeff, for the reminder about ETFs. I just bailed out of a few loser stock positions and was looking for something to replace them with. I also took most off the table in the way of profits on CMED and FPL. I am starting to be overly bearish and am thinking we need a relief bounce real soon.

Is buying SPY calls here at the close for a short pop using synthetics a reasonable idea?

Jeff, thanks for this post. I've been waiting on some more "direction" from you... you know, like you gave back in November. It saved my butt then, and I'm going to make some more drastic changes now.

Laney, I could sign MY name to your post and much of it would still be true. I farted away more money last year than the law should allow.

Jeff-
What are your thoughts on using the ol' IT three green arrow entry/ exit approach for longer term holdings/ investments in ETFs. I know the thought is probably about as un-sexy to you as, well, I'll leave it at that.
Thanks,

Whew-what a day.Just when you think it's safe to buy calls and you've taken all the profits in your puts--bang!
Jeff, thanks for the thunk on the head. I'm actually reading "ETFs for Dummies" right now, seems appropriate. As I said the end of Dec, my April DBA has kept my account afloat since November. Slow and steady sounds like a great ride.

ALPHA!

Thanks Jeff!

Laney,

Don't worry about it. I started the year with $1800 after losing $400 last year (well since June 07). I'm around $2000 so far including today's action. The only thing I wish I could do was day trade. Day traders have such an advantage when things go the wrong way compared to us little guys. Hang in there. Perhaps you or I could be the next Timothy Sykes (turned 14k to 1.6 mil)!

Jeff,
Thanks so much for putting caution again right in my face. I know you and Eric (we miss Eric!!!!) said on the Cast a while back that everyone loses money in a bear market (well, except for our ALPHA leader) and the trick is to lose less. I've been overtrading and need to scale back and this timely message will save my butt.

Laney, good for you to have a 45% return based on a small account. Your results must stem from being disciplined to follow your rules. And more importantly, you didn't give up and fixed what you did wrong. Your message really inspires me.

The only problem I've seen so far, after doing a little poking around in the ETF arena about a week ago (I may or may not yet evaluated the ones the Jeff has just shared with us today)... was that I found very little "open interest" and significantly wide bid/ask prices... this scared me.. so I tried a couple of papertrades in the meantime... and I'm still waiting out those plays.

But thanks for the topic, none the less...

Jeff I know you said we could thank you later but I wanted to thank you now. Today was the first really down day that I can remember where my account did not take a boot stomp! I was actually up about 1% today. I have tried very hard to become delta neutral after some costly days back in October where I was way over leveraged to the up side. I think I am finally starting to figure it out and give the glory to the blog.

I am long PG and AYE, underlying, both up today. I took down my first ever spread in DRYS, liked the setup, thanks for highlighting it.

Wow. I left with about 1 hour remaining in the trading day to pick up my youngest when the market was slightly down. I come back and the Dow is down 238 and the S&P is down 26. My account is up today thanks to SHLD, LFC and JOYG....Thanks Jeff!! I don't think I can leave you kids in charge of the store anymore while I am gone. Wait until your mother's get home!!

Jeff,
ETFs always sound so mysterious and scary when I hear folks talk about them. Not having ever traded them...can you shed any light for the newbie on appropriate tactics? Do you evaluate, buy and sell them the same as any other option?
Thx.

That is the first time I have heard the words ETF and scary in the same sentance.

ETFs are stocks. Nothing is different about them...except they are diversified and are less volatile.

Consider owning a trust account, and buying up every stock in an index within your trust acct. Then sell a share of your trust to someone else. That is what an ETF is.

Man Kohler!!! There is NO BETTER explanation of an ETF than your trust account example above ... You get better with age and you're still way young! :)))

Thanks for the ETF warning .... I listened and am doing my due diligence ....

Jeff, thanks for the laugh.. "never heard the words ETF and scary in the same sentence".

As long as we're on the ETF subject, just want to mention to those of you who can't short the market in various accounts, there are my faves, QID, SDS, & TWM which are inverse and double the QQQQs, the SPY and IWM. Meaning, if the index goes down, these will go up roughly double. My TWM shares were my biggest winner today by far. I see that they now have options on them as well. That might be too much volatility and leverage for me though.

Off topic-- When I'm drawing trend lines and patterns, should I be using a log scale or not? Does one give better results than another consistently?

The MarketCast just posted a little while ago. Jeff is on it tonight. www.investools.com look at the bottom right corner.

Doji Girl,

Great info. Thanks for the post!

Jeff,

Thanks for the answer on bull/bear ratio. I'm playing the charts as they confirm so I'm ranging from being neutral to slightly bearish at any given point. I am really enjoying the plethora of pattern confirmation opportunities this week.

Now to go look at some ETF's as a nitecap.

Jeff,
The IBB chart looks great on 5 year. But when I look at it on shorter term chart, it looks like a descending triangle to me. What do you think?

Anyone else notice that AFL finally broke through resistance at 63 yesterday (with volume) after several failed attempts? It stayed above new support today. I bought the May 55 call (no april available) in anticipation of a move to 69 in ~ 8 weeks. The Big Chart is very favorable, industry is in an uptrend and closing at an all time high.
Don't know if I can hold a position that long if is moves slowly, but we will see.

Nate,

Log versus no-log is really personal preference. The last time Jeff was asked on the blog he said he's using no-log. The key is consistency. Kim

Jeff

Liked today's Marketcast.

Seem to have good chemistry with Ben.

Century mark Puts interesting.

Jeff,

Thanks for pointing out your use of thumbnails end of day for deciding what to exit or keep. Do you have to mentally picture your own diagonal and horizontal lines of support/resistance in a thumbnail chart since you can't draw on a thumbnail chart like you can in Prophet Charts? Or do you simply use the only available S/R line there is on a thumbnail, i.e., the 30-day MA in red as a substitute for the lines you normally draw? I want to streamline my end of day process like you, but I don't know how you go about S/R lines on a thumbnail chart on IT.

Thanks, man,

Sledge

To Lanny;
Re: "I simply can't imagine anyone else here has a trading account as po' as mine."

Lanny, you're not alone.

With log you get the distance in percentage values whereas the same distance in two areas on a non-log chart will cover different percentage values. Since you should really only care about percentage values for the most part anyhow I think log is better.

Jeff -

Just listened to the 'cast for the first time in a while. You put more useful info in there in 20 minutes than I've seen in all the times without you. Not sure that sentence made sense but I think you get what I'm trying to say. I love those century mark ideas. Thank you!

Kim - Did I miss Jeff's answer to your bullish/bearish question? What him say?

Doji, Jeff said 60/40 leaning bearish.

After ditching a few calls today, I am about the same.

John

A good news GENZ story… Last night (Monday) I set a limit order to buy a couple contracts at about yesterday’s breakout point. With the gap down, I was filled when the equity was at $75 for an amount well below my limit order! Since the power was out this morning (Oregon mountain weather has been out of hand), I didn’t get to see my lucky fate until 9:15 PST when I got to work. Some times you get a lucky fill.

Cheers and goodnight,

John

MarkP

I to am with you on the (AFL) AT. Looks like a 6 pt ride with 5 left. However, did you mean you bought the May 65 call? The May 55 call is ITMx2 & 250% of the May 65 call.

Jim

Jeff:

Your 01-07 watchlist reflected FCX as a ST which it appears to have broken down from yesterday as well as the XLB SPDR. PCU is at old/new support x 3, does the FCX and XLB charts have a bearish bias on PCU and would follow suit in your opinion?

Thanks, Jim

I created a watch list of the holdings in each of the ETF's Jeff listed . Since the ETF is made up of different stocks now I can track the best performing ones. Then if I want I can enter trades on the best performing ones...IF they fit my rules.

CEOJWS

I have also been looking at FCX. Lost a lot of money last year on this one, but this looks to be a good entry. Also their estimates are based on $700 gold.With Gold above $850, they should bring in a good return. I HOPE!

On ETF's I have invested in ETF's for many years. A few that I won in my long term account are well long term themes I want to hold well long term.

Those include PHO-Powershares Water. This is my favorite water based play of the 3 that are out. Huge opps here.

I also own PBW - Powershares Alternative Energy.

And one I purchased last year when it first came out is MOO-Market Vectors Agri Business. DBA is another in the Agri space.

I might be learning about trading and swing trading but if anyone wants to know about long term investing, products, diversification and financial management I could help since it's been my career for over 12 years.

^^Should read "own" not "won" above^^ Though it would be kinda cool to win an ETF.

Anyone wanting a thorough discussion of log vs. no-log should review Jeff's Greatest Hits - The Goldman Trade.

John

Mike;

Right on with FCX, it's been wavering at the 1yr trendline now for the last two days. Direction should surface soon.....

Jim

MarkP:

It appears as though you nailed AFL at the break out, "Good Shot".

Jim

I don't post much but just wanted to say this is good thanks for your thoughts. I don't know if you remember me but I work at Invest. and I have been on Family leave. I asked you about spreds and you said you did like them as much. I have found them very profitable during this time and was wondering, do you see them as a good play during this bear market?

Not just AFL, but also GILD, OMG and GENZ are breaking out of an ascending triangles from this weeks list.

Don't forget SHLD, SYNT, DRYS, LFC, and BA that are also confirmed price patterns in play from the watchlist.

It's been a great week for price patterns.

For the record, I really don't mind playing the market down but, for my psychic, I would much rather have a positive and happy market trend. Right now, this market is like associating with negative people - I just want to get away and find something positive.

Brandon,

Were you hoping I would give you a different answer? Sorry...but my opinions are still the same.

Regardless of the market, I have been able to find good trending stocks, which has always been the secret to my success. I'll never agree with trading in an unlimited reward strategy for limited gains, larger loss strategies.

When I see the credit that a spread offers, I always think to myself that I would be a pretty lousy trader if I wasn't able to make more money buying an option or stock than a credit spread offers. If I can't do better than the credit, I won't take a trade.

This doesn't mean that the strategy isn't profitable, it doesn't mean it is an aceptable way to make money, or a much higher probability trade. In fact, all these things are true. They are just not for me. they don't suit my personality or style very well.

Jeff,
Would you consider EDU a failed breakout or still consolidating?

DRYS - making my day in a very big way.

Jeff -
LFC - are you considering this just a retest? I'd rather not see this go all the way back up to meet the descending resistance line. I played this as a desc. tri. breakout.

Jeff or other OA's

To log or not to log. Check out the chart on CSUN, with the log on it has hit its head on the trendline at about $18 and proceeded to fall sharply. With the log off it has come back to its trendline support. There is a big difference on this chart. When using log on other charts there is usually not this much a difference. So my question is would you play this as a support bounce?

Jon

DG,
I second the DRYS move. I chickened out and took profits.

On the subject of MOS,
Came out with great earnings before the bell, was up in pre hours trading, got an analyst upgrade, gapped up, stayed high, and then tanked. I don't think this was a sell the news because it was down big the last 2 days. I am not invested in it but I'm trying to understand the price action. Can anyone explain?