DEAL!

oh, sorry, wrong game.

IV high relatively speaking. Not too much time before the Mar ATM’s start losing real value. A break up would not yield as much of a return as a break down since the IV would probably drop. An initial 2 to 1 R/R before you shed the spare part…

I'll take the break when it happens.

Cheers!

John

Jeff

I know you were kidding, but I have a hard time letting you have the last word ;)

i just baughth POT 1 contract @ 6.10 for march 160 call..

what wouold be a good candidate to short. which ones are you guys observing. I am looking at HOLX

regarding strangle. will it move 15 bucks in 4 week is the question. thats lot of movement there. almost 10 % move in SPY.

"Last Word"

Jeff, LOVE the strangle ! Would buying April SPY's be a little safer than March ? ALSO. any thoughts on good ol' DRYS, looks like a lower low and higher high AND it is holding up rather nice today. BTW, great, great watchlist this week !!!!!

Ken,

It would be more expensive, and the return wouldn't be worth the risk.

CEOJWS (Jim),

I appreciate your enthusiasm...It certainly makes me feel better.

Maybe I can add to my streak...

AG puts, MICC puts (@ about 113, might not make it, but...EE), and our beloved VIP puts.

Could be a show, could be a dud. We'll see.

Thanks.

Berkshire

Scooter,

Are you buying CNX here at dia support?

CEOJWS,

Screw those....check out CNH puts.

Berkshire

Jeff, LOVE the strangle ! Would buying April SPY's be a little safer than March ? ALSO. any thoughts on good ol' DRYS, looks like a lower low and higher high AND it is holding up rather nice today. BTW, great, great watchlist this week !!!!!

Scooter, good point, I now see that. Thanks

New around here, but have been quietly lurking. I have to say, there is 10x's the info here than what I am paying $495/mo for right now! Jeff, that doesn't mean you should start charging though!!!! Thanks for all of the great info from all. I look forward to trading along side you!

Ken,

$10 premium cuts into the $15 move wouldn't you say? Not that time is bad if you can afford it.

Yes it would be safer though.

I think shipping is about to head lower. If you like DRYS check out GNK and EXM too.

Berkshire

AEM downgrade,,,sheesh.....how rude

Roadwarrior,

Glad to see you've poked your head out of the shell. Most of us don't bite...(Be careful around Raimo though...) It is hard to beat a good collaboration of minds. Glad to hear you are interested.

Next time quiet on the price thing though...
(I don't need Jeff to take any more of my money )

Berkshire

Berk, thanks ... DRYS is always a little temping going both ways for those 1-2 day hits.

Dirt, thanks for the AEM update as I had just 2 calls left to sell.

So, Jeff, is this just another analyst downgrade to pick up shares of AEM? I don't want to get shaken out just become some guys at a fund somewhere want to pick up cheaper shares before it moves higher.

AUXL.
This is a stock that proves to me that you shouldn't be buying options when the spreads are wide and the open interest is relatively light. I got in and it's not looking good for it to hold above it's support at just over $30. Sooooooo I thinks to myself that I'll just ditch the little skunk and be on my way. But the only way I can get out is to throw away an extra 50 cents on a $3.00 option because the spread's huge and no one wants my stinkin' paper.

Ooops, gotta run. Hillary wants some advice.

Hey Berk.
DRYS and GNK both seem to have inverse H&S patterns brewing... while EXM has twice hit it's head on a line I've had drawn at $39 for half a year. It's very, very strong resistance right now and when it reaches 38.50 I might take a pre-emptive strike on a put or ten. However this puts two very different spins on the patterns of three companies in the same sector. Which one's going to win?

Sledge,

As far as up and downgrades go, you have to know who watches the stock. As of right now the majority of Analysts say at buy, while the rest say hold.

If the numbers were less skewed you might need to worry.

I use analysts as contrarian indicators also, though I am not bullish on gold or miners.

Berkshire

Chris & Cat,

DRYS I can see your H/S (inverted), GNK I would argue H/S top retest...EXM is the weakest.

If you like DRYS bullish...how about a pairs trade. Long DRYS short EXM?

I see the entire transport sector weakening with the weakening economy. So I think most will fall.

If you want a bullish shipper...check out KEX.

At least it hasn't fallen yet.

Berkshire

I'm getting tighter and more nimble on my trades lately, shorter time frames, much less tolerance for losses, and doube down on winners.
I jumped out of AEM with a smallish profit.
NEXT.

Sledge,
AEM broke out of an ascending triangle and is simply re-testing support at around 64. If a downgrade on a down day only drops the stock by 1.2% then you just KNOW that it's time to double up. Massive volume on ATM and OTM May calls so I'm thinking that this is a good time to buy. If you're selling... I'll take them off your hands.
IMHO.

Scooty

I just can't let it happen......it's totally a girl thing!

C2C
Great point, see what the est of the day brings.

Thanks to all regarding AEM. I'm still holding my calls. I've just been beaten up this week pretty badly, so I'm fighting emotions. Also, I need to quit taking anticipatory trades, I guess. Does the blog family here prefer confirmation versus anticipatory (pre-breakout) trades? I'd love to hear the input.

Also, Jeff, you're right, I'm about 75% cash right now, sidelining with some high quality H2O.

What worries me about AEM is that the break wasn't on higher than normal volume whereas todays down move is.

Sledge,

I'm sure a lot of us will take both sides of that question.

I prefer to enter a small position in anticipation. I will usually enter between 1/4 and 1/2 of my position pre-emptively. However, as we have seen many times confirmation is nearly priceless.

Depending on the size of the move, or speed of which I expect depends on how I trade it.

In this market though, I would err on the side of conformation, especially if you are getting emotional.

Hope it Helps.

Berkshire

Sledge
Emotion will kill you. The best way to get rid of it is to trade small for a while. Try POT. That can make things small.

As far as anticipation... I've always been a big proponant of it. Christmas was always the best about a week before. Dates... you name it. But I will only take an anticipatory trade if the options are real cheap and real liquid (like your "quality H2O".... is it 100 proof?) That way I can bail imediately if need be. After confirmation I'll take a more expensive option.

Berk,

Yes, that definitely helps. Thanks, buddy.

Chris and Catherine,

LOL. Nice. Thanks for the tip.

I do have to say I have made a bundle on trading the SPY up and down in this triangle, 4 trades over the past month in the green is nice. I am ready when this thing breaks.

Lets hope it breaks down.

Congrats Westy,

It ain't easy trading sideways.

Berkshire

Sledge,

I am 95% confirmational. Occasionally, on an ascending or descending triangle, I will take an anticipatory trade at support or resistance or I also will on a bull flag within a probable cup and handle (such as CREE today). One of the problems with waiting for confirmation is that you want volume to confirm the pattern which means the price moves fast and may get away from you. I am fine with that since I am frequently more comfortable picking it up on the retest.

CNX looks good for puts right here.

Sean M,

Thanks, man. I'm the same way when it comes to chasing extreme breakouts; I just don't do it if they are too far out. But now I find that I'm going the opposite extreme and grabbing anticipatory trades long before a breakout so that I don't have to rely on Alerts or scramble through charts at 2:00 and missing too many moves. Maybe I'll just start placing buy-stops above all my breakout points?

Scooter,
Yes I would take that trade!

Alpha

Hi Everyone,
AEM

seems like it's not holding up like the other Gold stocks..any thoughts?

Sue

Hi All,
Looks like GILD has broken down below it's support level (~44) with a high volume. What do you folks think?

That would work Sledge, if you could include volume in there.

Berkshire

Jeff,
Thanks for generating another great topic for discussion.

Seems to me that with the tightening triangle, we will get a move soon, so not too much loss of time value, so yes, I would take this trade.

Thanks also so mentioning lower all-around volume. I've let a couple of good setups get by me thinking they needed more volume.
Lori

Trader JH,
I'll admit my CNX calls are making me a bit nervous right now (like knowing that Raimo's out there somewhere when I'm walking in the woods) but I still see a higher high and a higher low. If you're buying puts I'd call it anticipatory. Buying calls would be a trend bounce. I'll arm wrestle you on this one... but I wouldn't be surprised to see it go either way. If I wasn't in it... I wouldn't be in it.

Jeff and all, what are the pros and cons of using mini index options (xsp, djx) instead of the spdrs and diamonds for this trade?

Right off Jeffs list, DWSN..love it here..

CSIQ could drop to 19.15 and I am still keeping my calls. Under 19.15 and I'm out. I'm encouraged that this selloff is on low volume today.

Can somebody who took the AKS upon its breakout please explain to me how they are trading it from here? Thanks.

Chris, CNX is breaking through a bunch of moving averages in the 76.10 area. That is the main thing that is making me bearish.

I just closed my AKS calls for a small loss. Gains from yesterday gone. It may bounce tomorrow or it may not. I don't like those odds so I'm getting out. I think it could retest the $47 area and I would rather not wait for that to happen.

Sam,
I like it a lot. And the options are cheap and plentiful. It's like thanksgiving... only different.