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Closing Bell: Cowboy
2008-02-28 21:49:00
A great tune to send off a great day. Now if you'll excuse me, I have a magazine article to write. Niner.
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A Few Short Ideas...
2008-02-28 15:26:00
In the efforts of seeking diversification...AMLN- This stock has treated my puts very well in the past...ARTC- Getting ready to snapBYI- Bear FlagXL- Here comes another entry pointI will be busy up until around lunch time, but feel free to leave any other ideas here in the comments.
More About: Ideas , Short

I Was Wrong
2008-02-27 19:27:00
Since I amused myself with lots of retarded images today regarding my fortune telling abilities, I figured I would chase it with a post that details what I was wrong about recently...Eat it up because I don't do this very often.I was wrong to downplay my "gut" instinct that the market had reached a bottom several days ago.I was wrong (sort of) about shorting the exchange stocks (CME, ICE, NMX)I was wrong (too early) about the 4 horsemen this weekI was wrong that the Tennessee Volunteers mens basketball team would finish the season as the #1 seed.I was wrong (too early) about buying 10 yr treasury note futuresI was wrong about HOLXI was wrong about CWebb being a "value play"To cheer myself up, I should write more about what I have been right about...but you and I know that would take several days to complete.
More About: Wrong

Late Night Reading...
2008-02-27 01:57:00
Check out the new article on Investopedia...Click Here
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And I Quote...
2008-02-27 01:11:00
"Just remember, without discipline, a clear strategy, and a concise plan, the speculator will fall into all the emotional pitfalls of the market and jump from one stock to another, hold a losing position too long, cut out of a winner too soon and for no reason other than fear of losing the profit.""Greed, Fear, Impatience, Ignorance, and Hope will all fight for mental dominance over the speculator. Then, after a few failures and catastrophes the speculator may become demoralized, depressed, despondent, and abandon the market and the chance to make a fortune from what the market has to offer."Jesse Livermore, How to Trade in Stocks
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Selecting Stocks to Buy Options On
2008-02-25 21:26:00
Note the title.Now note it again."Selecting Stocks to BUY Options On."I used the word buy instead of trade. That is important.You can trade options on any stock that offers options. When I say trade, I am talking any option strategy... Verticals, Diagonals, Horizontals, Calendars, Straddles, Strangles, Ratios, Butterflies, Condors, etc.As you well know, buying an option differs greatly from the aforementioned strategies.As the buyer of an option you are using the option to leverage a price move. This strategy should not be used on just any stock, but reserved for only those stocks that will make the biggest and best movements out there. Let me put it this way...there are plenty of trending stocks out there. There are even more stocks that offer good entry signals for a call or put. However, there is more to option buying than just finding stocks with good signals. A good signal and a good trade don't often coexist. There is a difference between the two.I turn down a lot o...

Put Me in the Mood
2008-02-25 20:57:00
I always find it hard to get into the mood to talk about the market on Mondays. I prefer to watch my account swell.While I have asked for ideas that will get me into the "blogging mood" I am acting on none of them. Yet.Note: Your suggestions have all been taken into consideration, but most of them are things you can read about by running a search on my site. Plus, I hate to compete against myself. I feel like I always have to let myself win.I'd prefer to talk about important things, like how I picked the University of Tennessee to finish the season as the number one seed in men's basketball. However, I have no written proof of this here, but several witnesses that can attest to this prediction back on my birthday in December.Speaking of which, this year we should have an Option Addict tournament pool. I am probably going to take off the Month of March in order to fully enjoy the festivities and to travel to at least the first and second round games. Depending on the leve...
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Bet Your Bottom Dollar
2008-02-22 05:37:00
I won't be around in the morning, but I figured I would give everyone something to talk about...or at least offer a place to household unrelated chat.It's about time for a bottom to be called in the refiners. I would have had these on my watchlist this week, but my favorite of the bunch didn't look like it would confirm prior to earnings. Since I was asked earlier for a "stock pick" that needs to do well over a period of time which is more than I am comfortable with (2 months), I figured the confirming bottoms in refiners ought to be a safe bet.(I spent 2 hours concluding as such)WNR- My fave...HES- A close 2ndTSO- A BeautyThere have been a lot of questions directed to me lately that I haven't yet had time to answer. I will try to post a "Q&A" to clear the que. Don't take it personally, I just haven't had the time this week.See you before the closing bell.
More About: Dollar , Bottom

An Underpriced Pattern
2008-02-21 19:01:00
Everyone around here, including myself has been waiting for the most important price pattern to confirm; which is the triangle on all the indices. Here is a 6 month chart of the SPX, to illustrate the pattern.If you drill down this same pattern on the SPY, we are talking an 15 point move. If this recent consolidation of price is a leading indicator to a possible 17 point move, why not throw some money at it? By the way, for all the chatter about the lack of volume confirming trades recently, look at the chart below to see why. Let's be honest....you aren't fully invested right now... and neither are fund managers.How much money would you pay to be in front of this trade? What would you consider a decent price to pay to be involved? This is similar to trading an earnings announcement or FDA approval, right? You know a move is coming, but don't know which way prices are going.       ;      &nbs p;    ...
More About: Pattern

Long Treasuries
2008-02-21 18:16:00
I am covering my short, and going long...
More About: Long , Treasuries

Buying the Breakouts...
2008-02-20 23:54:00
CALM- If you missed the orignial breakout three weeks ago, or the the re-test over the last two weeks, CALM was begging you to buy here today.HOLX- Ready to breakdown...as soon as the market gives the go-ahead.MOS- Don't fight the cycle...POT- My point exactly.
More About: Buying

Sector Spotlight: Short the Exchanges
2008-02-20 17:12:00
This post was supposed to go out yesterday, but I like the downside potential in the exchanges right now. Take a look at a few charts...CME- Long putsICE- SameNMXAs the market continues lower, these stocks will continue to bleed. If you think prices have moved too much already, at least consider selling a few vertical call spreads. With implied volatility as high as it is, my opinion is that the market is expecting more turbulence than you will see out of these stocks over the life of March options. Consider selling them.
More About: Spotlight , Short

Weekly Watchlist
2008-02-20 05:44:00
Rather than create the impression that I had been working on this all day, truth be told...I had a dinner date this evening that I am just now returning from. Otherwise I would have updated this hours ago. Such is life. Anyway, enjoy. There are plenty of ideas inside.
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Alert! Watchlist Forthcoming
2008-02-20 04:44:00
Status: UploadingDetails pending...
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Closing Bell: Where's the Option Addict?
2008-02-19 22:32:00
So I broke the Monday watchlist tradition, and then disappear all day without a mention of cause. C'mon! It was the nicest day of the year and I had important stuff to do... like get my car detailed, play video games, and work on my mid range jump shot. Besides, with all the efforts I have endured over the last few weeks, I deserved a day off...even though a "day off" is the furthest thing from reality I've heard all day. What's funny is now the e-mails are piling up asking "Where's the Watchlist," and asking me whenever it is convenient, if I could stop what ever it is I am doing over here to cater to the needs of thousands.Be patient.The good news is that a watchlist will surface before the market open tomorrow. Check back later, and in the meantime visit one of my sponsors while you are bored to pay for my ever increasing bandwidth. In other words, have a coke and a smile and ....See you soon. In the meantime, here is a tribute to nice sunny days...
More About: Bell , Addict

Forbes Article
2008-02-19 17:34:00
For those that wanted to read my article about "Spreading the Homies" on Forbes .com, click here to check it out.
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Guess What?
2008-02-19 15:38:00
Boy, I am sure glad I own GLD this morning...While I gather my thoughts this morning, I thought you might want to know that due to unforeseen issues, this weeks watchlist has been delayed until much later today. Maybe even tonight.In the meantime, I am going hunting. I'll be back with a few ideas this afternoon. 
More About: Guess

Get Some
2008-02-14 21:56:00
Happy Valentines Day.I shrugged off my morning moodiness, and finished the day strong. In case you didn't know, I had hurricane style winds last night along with loads of snow. This knocked out my power, my tivo, and my mood since I had to pack up and settle elsewhere. Since market hours are fairly early for me out here in the mid west, it was a pain in the neck to get settled this morning.Anyway...The Bernanke testament ripped the market today, which proved to be pretty useful. UBS reported the mother of all losses, and Moody's cut a few bond ratings. Speaking of Bonds, MBI and ABK finished the day up nearly 12% respectively.The day wasn't totally wasted, since I used my time to buy a few dips and sell a few rips. Take a look at a few of my bear picks...BIDU, ICE, CME, ZNH, ENR, AMZN, BYI, CAM, CMG, DECK, PCLNYesterday I had encouraged you to add/buy GLD, DBA and UNG (BTW- Those moves in DBA and UNG were S-I-C-K!) ...but here are a few other bull picks y...

Watchlist Follow Up
2008-02-13 17:03:00
I am encouraging the writers of Option Addict to get together with my trading desk and compile a formal "Watchlist Update" throughout the week. The terms are still being ironed out, but I think this ought to be a great idea for several reasons. Most importantly, to showcase my track record. Less importantly, to generate discussions around the watchlist stocks. This will help readers to understand the importance of trading with trends, understanding price patterns, grasping the entry/exit rule, etc. In addition, I am tired of letting the unsung heroes that have surfaced from the last several lists go unnoticed without discussion. Time to switch gears.Anyway, this week had no severe losses, which was surprising based on the bullish bias of the market. Here are the highlights...CMI- +6%NEU- +8%CNX- +2%STJ- +7.3%SLB- +8%CLF- +9.4%ITC- +5.1%HOS- +6%EOG- +11%AUXL- +11%IBKR- +4%ILMN- +6%The returns are based on stock prices (from Monday until current), so you can imagin...

Another Day, Another Dollar (Plenty)
2008-02-12 21:56:00
Perhaps my early morning optimism was premature. The environment is very fitting for a bottom, but the market beheaded the bulls as usual, despite a late day comeback. My prediction of a rally was short lived...so far. What volatility though! Looking back, I giggle that I "mistook this rally for another bump in the comfortable drift lower." My thoughts were that we might have a little rally this week, as a move higher is overdue...but in the end, the tape doesn't lie, and it looks like hell on the 60 day chart...Not to mention the results I got when looking at call/put volumes on the SPY Feb paper...     &nb sp;In closing, I am all smiles, and in dire need of a good tune to send this day into the archives. The video below is pretty weird, but it's the song behind it that makes me smile today. Very fitting.
More About: Dollar , Plenty

Selecting an Option... With a Hint of Gamma
2008-02-12 18:43:00
Everyone has a different methodology of selecting an option; most of which are wrong. Most option buyers will tell you it all comes down to their forecast, while most option sellers will tell you it all comes down to the probability of success. I have plenty of experience in both camps, and as most of you know: I am an option buyer. As such, it is tougher to pick the right option since they are wasting assets, and naturally they favor the seller. Over changing market climates my strategy has always been the same...I pick them short & sweet. Short meaning short dated... specifically, front month or second month expirys preferred. Anything longer dated messes with my ADD. I say "sweet" meaning that in order to get the right outcome, strike selection is critical. When trading breakouts or stocks I have predicted to make big price moves over a short period of time...I trade OTM options. Normally only one strike out on cheap stocks, maybe as much as two strik...

Well Folks...That Was the Bottom.
2008-02-12 16:22:00
Before you start to panic, or mistake this rally for another bump in the comfortable drift lower, realize that the news of Warren Buffet backing the bond insurers, and offering stops to the ailing credit market bodes very well for the stock market right now. It is likely we rally here for the rest of the week. Keep in mind that the market has digested everything that has been thrown at it...and as a result, it is moving higher.Before you start to veer the course of your own ship, allow me to share this with you. Apparently what nobody realizes around here is that when I say I am bullish or bearish on the market...that is a form of casual conversation for me. It's like asking me who will win the Warriors game tomorrow night. As a trader I have never put the fate of my money in a position to be compromised; especially by an untrustworthy source like the contaminated stock market. So while some people might use my casual and "off the cuff" opinions about "...
More About: Bottom

Industry Group Spotlight: Rollin With the Homies
2008-02-11 17:38:00
I talked about this set-up last week...in fact, if luck is in the air, you might see this idea published on Forbes.com today. I like this set-up in the builders. It looks like a confirmed trend reversal pattern. In the short term, I like the possibilities.XHB- Watch it at $20. If you are going to do any bottom fishing here, it makes sense to use these old resistance levels as new support. You know...the "entry/exit" strategy. If these old levels fail, get out.More ideas forthcoming.
More About: Industry , Spotlight , Group

Looks Like He Was Right
2008-02-08 23:35:00
I am going to flee the scene from another great week. Rest assured that the upcoming content I promised will be delivered shortly. This includes some controversial option topics, watchlist videos, and a daytrading video. I am going to make a conscious effort to beef up content; especially with "big brother" watching. In the meantime, go relax and get hyped for an awesome week next week. Sincerely, The Option Addict

Portfolio Update: More Profits
2008-02-08 19:16:00
I love being diversified. It really subtracts the whole "market direction" thingy out of the equation. Thanks to the weakness in financials and a few retailers... we are heading lower. But we were heading lower regardless of them participating or not. In fact, I think the S&P tastes 1275 next week...want to bet?Looking back on the week, my industry group spotlights on Wednesday are working well (miners, coal stocks and ultra shorts). Combine those trades with a few "hot commodities" such as DBA, UNG and GLD and you could say it has been a fruitful week. Note: I closed out my initial UNG position last week, but nibbled on a few shares today.Other than that, I will start to take a few profits, sell a few contracts into strength, and take a few mandatory losses towards the close. I am looking forward to big gains next week via Mondays watchlist and some telling economic data.Since Fridays are typically used to bask in my own glory, I will take a little...
More About: Portfolio , Update , Profits

Nice Try
2008-02-08 01:20:00
Unfortunately, if you are a bull...today's tape had to have left you feeling very unfulfilled. After losing nearly 550 points on the Dow, you chose to buy back only 40. Nice work. I applaud your efforts.I can still see the market testing it's lows, and have stood by that claim ever since the Dow opened up over 400 points lower. As you can see, this swing higher is pretty insignificant in the midst of this awful trend...I've warned since July on last year that bear markets are tougher to trade in. Once you've experienced the psychology that takes place...the fear of a market drifting steadily lower and the optimism on each weak move higher that the "bottom" is in... then the harsh realization that you don't know what the hell will happen next... you've seen what I mean.My opinion is that the volatility will steady, and things will get a little easier in the short term. Don't bank on this long term though. If you want to be a productive trader, you will learn how to a...

Plenty O' Price Patterns
2008-02-07 17:23:00
As the market gears up to digest the "overly optimistic" today, I figured I would share a few price patterns I am watching. CLF- You should already know about this one. CTRP- This one will be a daisy... HANS- Once it finds a way to break support, it will be a $30 dollar stock. Unless Coke steps in, of course. MON- I scaled out of this stock last month; one of my top three positions of 2007, and am waiting to get short.. STRA- Last time we saw a pattern like this in an Education stock, the outcome was unreal Interesting to see that the market has taken the CSCO results, retail sales, pending home sales and the Jobless claims like a champ today. But don't fret...we are going lower. That is all I have to say right now.
More About: Price , Patterns , Plenty

New Release
2008-02-06 22:47:00
After a long day of treating the market like an ATM machine, counting money, blogging, and writing fortune telling doctrine for Forbes; I am going to spend the rest of the day relaxing with my thoughts. Before I leave, I should let you know that I updated the "Trading Videos" tab with a new video titled "Drawing Trendlines."Pull up a Monster Java and click here to view.As Rick James would say...Enjoy yourself. 
More About: Release

Alert: Short the Option Addict Blog
2008-02-06 19:15:00
WTF? I am amazed by the hush and lack of participation here on this blog lately. Where are all the traders? Why are you so quiet? You'd think this would be where all the chatter takes place, and the ideas would be flowing. This is where the speculation between bulls and bears should be peaked over who is right in a possible change or continuation of recent trends. Apparently the opposite is true. If we don't get this place to liven up, I might give into the acquisition demands that have been circling my inbox.In short; this would be bad for you. I know about your other "resources" and they suck ass. But you already know that.As Snoop Dogg would say..."Step Yo Game Up."Long: Motivational Speeches, Threatening Blog Posts, Acquisitions and Strengthening CommunitiesShort : Silence and Lack of ParticipationDisclaimer: "Gladiators, I Salute You..." 
More About: Alert , Addict

Industry Group Spotlight: Ultra Short "The Market"
2008-02-06 17:15:00
Yesterdays "beat down" was a good opportunity, if you are a bull, or a buyer of Ultra Short ETFs. Why? Well, yesterday obviously offered cheaper prices in Ultra Short ETFs, and I guess you could say ETFs in general. However, if you didn't buy these stocks into their weakness yesterday, you are going to be forced to buy them into strength today. Well, I guess you are not forced to buy anything... but you are going to be held accountable if you are not properly diversified, and last time I checked, gold mining stocks were the easiest uptrend to make money in right now.If you do not have a watchlist of ETFs that act as a barometer of the overall market, get one. And when you do, make sure you add Ultra Short ETFs to it. It will be a great way to measure the inverse performance of the overall market.]I could keep going, but I think you get the point. I don't think this trend will last forever, but in the short term ...
More About: Industry , Market , Spotlight , Group