Jeff Kohler's Trading BlogJeff Kohler's Trading BlogAddicted to options? Me too! So is my community. Read my daily commentary about market action, trading strategies, and follow real time examples of how to profit in the market. Articles
"Once PTEN Twice Shy"
2008-06-09 16:42:00 I was thinking about my PTEN trade earlier this morning, and I figured I would think out loud about a few things. In case you missed it, I bought the dip with an aggressive option selection last week. Click here if you want to see the original post. Now, I am a week closer to expiration, only $1 short of my price target, but nowhere close to the reward I figured I'd have. Dammit.Options are one of the few sports where you can ultimately be right in your forecast, and still lose money. If you are too aggressive or at times not aggressive enough, you won't retrieve adequate returns. Having said that, let's analyze the trade. Here is a quick snapshot of the chart...Even though I caught a 7% move in the stock so far, the problem is that I figured I would have been further along in the trade by now. In fact, without Friday's meltdown, I thought we'd be at the highs by today. Go figure.Because I was expecting the move to happen quickly, I was just in buying a short dated option. Howe...
Closing Bell: The World is a Ghetto
2008-06-06 22:06:00 I'll make this quick...I hope you did too.A special thanks to the folks at CMP, BUCY, ACI, IPI, and ARTC, for making a 400 point drop a pleasant feeling.A different kind of thanks to the folks at MS, CMG, URBN, RIO, ANF, LVS and CHL, for "pushing weight."Watch for a "phenom" watchlist this weekend, and a Black Monday....on Monday.Later,The Option Addict More About: World , The World , Bell , Ghetto
Gimme Some Puts
2008-06-06 17:31:00 June 70's on CHL...it is on life support.Remarkably, some of our recent calls are holding up today. What else do you got out there as far as puts are concerned?Do Tell. More About: Gimme
Disqus is down...
2008-06-06 17:02:00 Here is a short term solution. Feel free to leave comments here.
At the Open...
2008-06-06 06:10:00 I have a few more long ideas for tomorrow morning...ISRG- My favorite set-up of the week, no doubt. June 310's at the open.SOL- Tough price, but I am going totake June 25'sGGB- Jun 50's Honorable Mention: ARTC, RCH, WRC, and anything Semiconductor related. More About: Open
The PSS Saga
2008-06-04 18:51:00 Like any other day, I stumbled across some "reader mail" out of my overflowing mailbag yesterday. Now this particular note wasn't like most notes I get. It was kind, to the point, and pointed out an issue of interest. It is an issue I take seriously and want to discuss briefly. First, read the note. The submission will remain "anonymous" as I respect this persons opinions and do not want to offend said person.Yesterday you jokingly made a recommendation for PSS.Today you made it clear that you didn't really mean to recommend the trade, just having fun with the PSS symbol.While I enjoyed the joke and even played along, on further thought I felt I should drop you a note to remind you that as the "guru" to all the Option Addict's out there, you swing a big bat.This note is certainly not a suggestion to take the fun out of your blog, but just a reminder that in cyber space there are Option Addicts at all levels of talent, who hang on every word you ... More About: Saga
A Word of Caution
2008-06-04 16:36:00 Even some of the strongest trends are showing some signs of slowing. I know I am a little late to mention this (I prefer to wait until it is actionable), and seeing how many people are worried about "who said what first" around here, I would prefer you make a rectal deposit with your anecdotal comments, and focus on the subject matter.This most recent dip buying opportunity in energy related stocks is starting to generate signals that hint towards a possible weakness in some of these strong stocks and trends. Not all of them, but some. For example, yesterday I brought this up with RIO (which happens to be down another 2%). Also on that list; Water Transportation companies. Here are a few examples...GNK- It wasn't too long ago, I owned a healthy sized portion of calls. For a day. Now I am considering puts.A good dip buying opportunity gone bad in some instances points toward a short term "top." When support failed on GNK, the stage has been set for a lovely ... More About: Word
"What I've Got"
2008-06-04 01:55:00 Between the additions I have made over the last two days (Long: CMP, PTEN, GRMN / Short: MS, URBN, ANF, ARO, RIO), the trades I took over my vacation (Long: AXYS, HXM / Short: LEH, MS), and what I had already established before I left on vacation (everything else), here is a glimpse of my total holdings at the end of today.Long: CMP, PTEN, HXM, GMXR, AXYS, BUCY, PENN, JASO, ACI, AKS, GRMNShort: MS, LEH, LM, NDAQ, CMG, URBN, ANF, ARO, LVS, RIO, BOOM, WFR, RIOLosses Cut Along the Way: Several. I'd have to go look those up, which I am not willing to do at the moment.I meant to post this earlier, but I had a recording to generate this evening. See you tomorrow.
Buy, Sell, or Hold - RIO?
2008-06-03 19:07:00 Listen here, I don't have time to play games. This type of interaction here is totally unacceptable. This place should be in a state of euphoria, celebrating the vast opportunities and generous profits that the market has been so kind as to throw our way. It seems that when this site lacks camaraderie and entertainment, the gains are not as enjoyable and the day is rather vanilla. In short, get out from under your rock and say something. Or else.In order to give you the "assist," I have a topic I want to discuss. I saw something peculiar in this chart and want to know if you see the same thing. The question: Buy, Sell , or Hold - RIO?PS- I was kidding around, never take me too seriously.
Greatest Hits: The Art of Entry
2008-05-29 02:34:00 In many ways, trading is an art. There is a beauty in identifying, planning and executing a trade. That being said, I am going to teach you how I became a Van Gogh of the stock market. In my opinion, a good entry takes away a lot of the stress that trading will encounter. For example, how to manage a loss, where to set a stop, and how to start off the trade with gains for a much better experience. Do you know how much easier life is when your trade makes money right out the gate? For me, decisions are much easier to make when I have a profitable cushion provided by the market, or I have insured an easy to manage loss that I am comfortable with. These things are all possible with a good entry.A few days ago, I taught you how I trade breakouts. The strategy I am going to discuss is different; this is how I trade trending stocks. There are a few simple rules I like to follow, and these are the rules I have taught day in and day out since I started trading, and since I started this... More About: Greatest Hits , Hits , Greatest , Entry
Greatest Hits: Pattern Failure
2008-05-29 02:32:00 Well, Friday is finally here and I will be taking in one more day of sandy beaches before I make my way home Saturday. This "Greatest Hit" I am re-publishing was a group trade that most readers of the site had been involved with. It was a trade that had ups and downs, but those who were able to stick to the plan that was outlined had wound up reaching the target price that had been established upon taking the trade. This particular post discusses price pattern failure. Enjoy. Too many e-mails rolled in to me today telling me how CTSH failed it's ascending triangle pattern. I beg to differ.In order to correctly identify entry and exits while trading patterns, you must be able to draw a line in the sand that states when a pattern has failed. Think of pattern failure as a way for a trader to determine the likelihood that the stock will still make a reasonable attempt to achieve it's target price. If it moves beyond a certain point in the pattern, this substantially reduces ... More About: Failure , Greatest Hits , Pattern , Hits
Greatest Hits: Risk Management
2008-05-29 02:26:00 Plenty of questions have been passed around recently about position sizing and money management. If you ever hear me use the words "play defensively" this is what I am referring to. Properly sizing your bets and how you manage your money is the key ingredient to being a successful trader. Allow me to elaborate.Successful trading is not always winning or losing. It is how you distribute your capital, withstand emotional decision making (psychology), and staying disciplined to your rules and financial goals. Money management is a defensive concept and keeps you alive to trade another day. Lets go over a few of the specifics in order to effectively plan your betting (position) size. Keep in mind if your ideas here are to be told exactly what YOU should do, close this window now. As usual, I try to promote original thought, and the reasons behind concepts, but since you and I are different people, what works well for one of us, might not be in the best interest of another (dis... More About: Management , Risk Management , Risk , Greatest Hits , Hits
Greatest Hits: Taking a Trade Start to Finish
2008-05-28 16:53:00 Last time we looked at this chart it was in my January archives. In fact if you click on Jan 2007, it is the first one to pop up. This was a trade I took back at $80 and been playing it ever since.Anyhow, I want to use this as a case study. If you decide to take this trade repeat after me..."I am a lunatic for taking anything Jeff says seriously. US Steel is my trade, and I assume the responsibility of adopting my analysis and my trading rules to this idea. "Oh yeah, don't forget..."I am an Option Addict."The art of taking a trade...Step 1: Identify the prospect.This should be part of your daily task is to check your watchlist and or run searches to find stocks to trade. The selection process should look for the cream of the crop, and never settle for things that look "ok." Never settle.I love the trend, I love the stock. I am moving to the next step.Step 2: TimingTiming will be a little different from one trader to the next. In an uptrending stock I l... More About: Start , Trade , Greatest Hits , Hits , Taking
Greatest Hits: Exit Ideas
2008-05-28 16:42:00 My internet connection is ridiculously slow. Therefore I am going to post one of my "Greatest Hits " for the next few days while I am on vacation. The market hasn't provided enough volatility to daytrade, so I am keeping stops on the few positions I have and going to go swim with the dolphins today. See you on Monday.Trading is unlike any other profession in the world. You wake up every morning to trade against the best of the best. In what other profession are you going up against individuals that in all honesty, are at a totally different skill set than you are?Jack Schwager said it best..."Trading provides one of the last great frontiers of opportunity in our economy. It is one of the very few ways in which an individual can start with a relatively small bankroll and actually become a multimillionaire.""Of course, only a handful of individuals succeed in turning this feat, but at least the opportunity exists."Face it, we are amateurs at this sport. I... More About: Ideas
Weekly Watchlist
2008-05-27 01:25:00 As I mentioned yesterday, the delivery of this weeks watchlist is not going to be in video format. Rather, I am just going to provide a few ticker symbols of interest that I am going to watch tomorrow morning to get "long" or to get "short." Loading charts is an unbelievable pain in the ass with this spotty internet connection, so let's make a simple list of tickers work for us this week.I am often asked how I come up with the stocks on my watchlist each week, so now would be a good time to give those of you who don't know an idea of how my ideas come about. First, I keep watchlists of stocks. Roughly 50 "lists," organized by sector/group, with about 100-150 stocks on average. How do I pick them each week? I review them via thumbnail charts. I can visually look over all these stocks in under an hour. All I am looking for are good technical strengths, such as trend, volume, and relative support and resistance levels. My eyes can locate a good set-up in... More About: Weekly
Memorial Day
2008-05-26 00:53:00 I have planted my feet in the hot sandy beaches of Mexico, and am looking forward to a week of trading from my new warn and sunny environment. Not to mention, I will be wearing a nice set of "Option Addict" unmentionables, for good luck. I will be publishing a smaller watchlist this week using the IBD top 100 as my pre-screener. Ideally, I'll be creating a group of 5-10 long positions and 5-10 short positions. I don't want to "over do it." Look for this list sometime tomorrow evening.Until then I hope you all have had a safe weekend and spent good quality time away from the market. If not you still have tomorrow to release from the pressures of the market, so relax and be with those that are important to you. Also, please observe the meaning of this holiday and do your part to pay tribute for those who have sacrificed so much to give us the freedoms we enjoy. I hope I will see you all back here on Tuesday, ready and willing to "have you... More About: Memorial Day , Memorial
A Tale of Two Traders
2008-05-23 17:51:00 As I have packed and prepared for a nice long vacation over the next 10 days, I can't help but sit back and reflect over the calamitous occurrences that have come about over the last week. As I mentioned yesterday, I think a lot of it has to do with when markets change. Nobody has a perfect recipe for predicting these things consistently. In fact, I have been touted plenty for my bullish sentiment as the Dow got 2,000 points richer over the last few months. You'll grow to find that trading becomes less entertaining when the focus deviates from making money in droves. I read a story last night on the Marketcast from Steenbarger's book "Enhancing Trader Performance." I won't tell the story, but I will give a quick summary... Two traders, both professionals, both trading the ES futures contract under Dr Brett's supervision. "Trader A" has a long bias in the morning, the trade goes against him, calmly stops and reverses, gets on the short side, scalps a few buck... More About: Traders , Tale
Taking Profits...
2008-05-22 21:07:00 A good question came about in the comments section of my last post that asked "when do you take profits?"It is nice to talk about trading for a change, so let's use an example...First, you have to examine the style of trader you are...do you swing trade or trend trade?In this market it is much easier to be a swing trader. In fact, with the exception of last year, I have always been a swing trader. As a swing trader, the objective is to "swing" within a trade from a top to a bottom, or vice versa. Like so...Buy a dip, sell a rip, and try to pick a reasonable spot to take profits. This proves difficult for some, since emotion beats us up for not having the sense to pick the absolute top or bottom in our efforts. If you feel that way, you should try to move on. As a swing trader, I have become quite comfortable with a portion of the move.As you look at the chart above, doesn't it look like a relatively simple process in hindsight?As you move forward, think ab... More About: Profits , Taking
"Perhaps You Need a Refresher?"
2008-05-22 16:32:00 Listen, I am only going to do this once, so pay attention. I realize that market tops and market bottoms have always provided the best forms of entertainment and drama. It is at these points where people will disagree the most. I remember dealing with this back in the summer of last year. I constantly made the comment that "The Recession of 2008 Starts in 2008," and was very open about how extremely bearish I was near the market highs. Conversely, I got a lot of shit back then too. I don't expect these trends to change. It's the price you pay for putting yourself out there. It's worth every penny.However, it seems as if over the last week or two things have come to a slow grind around here. You all know that I refuse to put up with that, so let it be. I could care less about your opinions, I care about making money and providing that luxury to my readers. No more bullshit comments about this ridiculous "Melrose Place" atmosphere. ...
Re-Boot
2008-05-22 16:15:00 Enough already. I am going to stop reading this blog along with the few retards that heckle. Let's refresh, shall we?Focus.Regards,The Option Addict More About: Boot
Market Commentary
2008-05-22 01:37:00 Market Commentary from Investools.comInflation, Oil prices, and weakness in the financials has finally caught up with the entire recent optimism dwelling within the market. The bears have clawed their way back into the market place leaving the market with the biggest 2 day sell-off that we’ve seen in months. The Dow Jones finished the day 227 points cheaper, closing at 12,601. The NASDAQ left 44 points behind, closing at 2,448, and the S&P 500 burned off 22 points, finishing the day at 1,390.The biggest driver behind the abandonment in stocks came from the Federal Reserve, as they released the minutes from their last meeting. This report indicated that the vote to cut rates by .25 basis points was likely to be their last. In their discussions, there were three main ingredients that fueled the market sell off today. First, the Fed raised their forecast on inflation. Prior expectations were calling for inflation to come in between 2.1-2.4% this year, but earlier today it was... More About: Market
Refreshing....
2008-05-21 22:00:00 I finally "cooled off" a little today, the hard way. A nice contraction in unrealized gains has got me closing out a ton of positions that I did not want to close. More on that later. I have been involved in a few meetings this afternoon, hence my absence. I will adress my viewpoints in the "Market Commentary" which I will upload in a couple hours. See you then.
I'm Watching Shippers
2008-05-21 15:50:00 Keep an eye on the price action of these stocks, especially near these trend support levels. For a precision entry point, focus on intra-day charts. Most importantly, watch how they trade over the next hour or so. They exploded out the gates, but have sold off a little. If prices stabilize, I will buy this dip.DRYS- June 110'sGNK- June 80'sTBSI- June 60'sShort and sweet with a target price of no less that a prior high. Very feasible.Feel free to argue my idea, I am not listening. More About: Watching
Bad News...
2008-05-20 21:10:00 That is right, for my critics out there I am here to confess that I lost money today.The good news is that it is only on one trade. Here is a snapshot of NYX, in which I took a long position at a horrible price last week. Today, with the Dow getting milked for 200+, I am at a point where I might have to send this one to the "shed."I hate to be the one giving losses a lot of rope, but as the buyer of an OTM call, I position my trade for a 100% loss of premium. I pleasantly get a few bucks back when I close at a loss, but this method I have described here numerous times helps to keep my losses in check. In regards to the price action you see today, NYX is at a critical level. When trading a triangle, it is likely to see prices use the "apex" as support. However, the rising trendline support was totally disregarded today, albeit on average volume. The decision to hold here would be the equivalent of a coin toss, so I am going to hold. After all, my position size in ... More About: News , Bad News
Get Shorty
2008-05-20 16:51:00 The overbought condition of stock prices offers an opportunity to replenish the bearish side of your portfolio. Not to mention that the further the market falls, this will allow you to buy strong stocks at cheaper prices. However, If you are overweight in bullish positions, you are doing a disservice by not diversifying. I'll be the first to admit that over the last several weeks, I have not been as diversified as I should. I have been trading multiple names in certain groups, and I have been over positioned in bullish trades; at one point by nearly 3:1. While I broke my personal rules in regards to diversification, the reason was simple. Opportunity. You know, opportunity is a risk if you don't take advantage of it.On to the market..."Down and down she goes, where she"ll stop...no one knows."I think 1400 makes the most sense...I did a little shopping this morning and here were a few ideas I came up with...TSO- Refiners looking pretty ragged...CMG- Been a ...
Market Commentary
2008-05-20 00:37:00 Market Commentary from Investools.com...Jeff KohlerI can’t recall the last time my commentary didn’t start with talks of high oil prices, and how the market reacts to it. Because of this, I will save that dialogue for the second paragraph. Today’s big news story came from reports that the economy might still be growing. At the day’s end, the broader market escapes the day with a few gains, despite a mid-day sell-off. The Dow finishes 41 points stronger at 13,028, while the NASDAQ finishes 12 points lighter, closing at 2516. The S&P 500 added a point, finishing at 1426. However, if you didn’t notice the fact the market was up quite a bit in the morning, these gains might not sound as reassuring as you might think.Figure 1: 1 Day Chart of the S&P.Oil prices extend their gains to yet another new high, as prices moved above $127 for the first time. In response to high oil prices, the national average for gas prices has now hit $4 per gallon. Good lu... More About: Market
In Response to all the "Slope" References Today...
2008-05-19 21:46:00 More About: Today , References , Response
The Door is Open...
More articles from this author:2008-05-19 21:21:00 Enough of your bad attitudes already. If a little intra-day turbulence has you this pissy, I hate to see what happens when I have a "bad week." Too bad that will never happen (read: arrogant and condescending).While I ignore your hateful remarks, I will be buying into the market with this dip. Here is a 10 day chart...Now be nice, or I shall be forced to "make a market" on the other side of your trade. More About: Open , Door 1, 2, 3, 4, 5, 6, 7 |
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