Monopoly wants you to play with plastic - What Were They Thinking - MSNBC.com

Monopoly wants you to play with plastic - What Were They Thinking - MSNBC.com
What a strange world, and a commentary on our monetary sytem--seems that the game Monopoly is being redesigned to do away with the "Monopoly Money" and instead will use a debit card for the transactions....

11,200 and the DOW

Well, color me optimistic...the levels of support (with one exception) were broken and held by the end of last week.

We were waiting for the DOW to break 11,200 and Friday we closed at 11,219. For the NASDAQ we had nearby resistance at 2,080 with 2,100 as our level we were watching. Friday, we broke the first level, but fell just shy of 2,100 closing at 2094. For the S&P we were watching 1,275 and we closed at 1,278.

So what's all this mean? Not much if we don't hold these levels, but certainly the rapid turnaround is a surprise. I'd expected this move above 11,200 to take at least a week (or two or three). This is good news for the bulls.

However, don't be surprised if we give back some of these gains over the next few days...it's a tough time right now--we could easily drop back down, and (essentially) bounce off these major levels of support/resistance. But if we don't, and we continue to move up, then we'll be riding the bulls' backs for some time.

This morning, I'm going to go "shopping" for new longs...we'll see what the charts look like. Unless the markets drop this morning, we're bullish moving forward.

Good trading!

10 nasty money habits to kick - MSN Money

10 nasty money habits to kick - MSN Money
Excellent review of good money management principles!

Important Market Levels

As an addendum of sorts to our Market Update, we're watching the following support / resistance levels closely:

DOW

11,000 is a key level (now support). We do not want to break below this in order to have sustained confidence in our bull rally.

11,100 is another key level--and we're above that right now. It would be very encouraging to see us hold this level. Essentially if we stay above this we're back into our horizontal channel.

11,200 is the big number--a move above this will signify that we've turned the corner. We'll have completed a "double-bottom" in the DOW, and things will be encouraging for long traders. While this may not happen for some time, this is a level we'll be watching very closely.

NASDAQ

2,000 is a huge number, and while we don't expect this to be threatened, a move below this would be significant.

2,030 is near-term support. We'd prefer to stay above this floor

2,080 is near-term resistance. We'd like to see the NASDAQ move above this level, preferrably on higher volume, and close on the high side of this number.

2,100 is another round number with psychological importance--a move and close above this would be further evidence we've turned the corner.

2,200 is the next big level--when we break this, we'll certainly be bullish, and will (like the DOW) have completed our double-bottom. However, this is likely some time away.

S&P

1,275 is the key number we're watching here--we'd like to see this index move above this level.

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There you have it--lots to pay attention to over the coming days and weeks--it'll certainly be an interesting ride!

Midweek Update

Well, to borrow a famous quotation: "What a long strange trip it's been..." Yes, the markets have continued their schizophrenic behavior, and are up strongly this week.

Anyone who doubts that the Fed Chairman is the most powerful man in the world need only look at how the markets respond to a few words from Mr. Bernanke...simply amazing.

A few folks have asked how to trade in such a volatile market. Well, it takes a strong stomach, and rules that you stick to no questions asked. Volatile markets tend to amplify our emotions, and it's easy to "bend" our rules--and that's precisely the wrong thing to do.

A trader also must remain nimble, and be willing to take less profit and have tighter stops. It's very much a balancing act.

If the emotions are difficult for you, I'd also recommend placing stops and contingent orders ahead of time--then you can avoid the temptation to give it "just one more day".

So where do we stand this week? Well our short trade on SBUX got stopped out at a small loss. Looking back at this chart, we see an inverted pennant--the stock dropped, and then formed a channel. We then wait for a breakout from the channel, which occurred on 7/24 as SBUX move above resistance. Unfortunately for us, we'd have preferred a downside break...but with our exits in place, no harm no foul.

Our other short trade is FAST, and that one is right at resistance today, and may also break out of its channel to the upside as did SBUX. If so, we'll be exiting that one as well.

On the other side, a new long is DAKT. It's right at resistance now--and it may drop, or break up further. Certainly a tight stop on this is warranted.

So there you have it--a very volatile market, and to compound it all we're in "earnings season" and we have turmoil in the Middle East...certainly not a recipe for stability, but there's always profit in volatility--the challenge is to find a way to harvest it.

Good trading!

Market Update

Well, it's been a great week for us so far, all on the short side. Our selections from last week (BDK, CNC, ESV, FRK and GGC) have all been very nice short trades. We did have our stops set tight on most of these and have locked in solid gains. All in all, we're up 30% on our entire trading account this week--not bad!

In addition, we've entered 2 other short trades, FAST and SBUX that are doing quite well so far.

Currently the DOW is holding firm at 10,700 resistance. If we break that, we may be in for another strong move down. Likewise, the NASDAQ is forming a bear flag now, with a close below 2,025 likely leading to further drops. With 2,000 closeby, we'll be watching that index very carefully.

At this point, we're no longer looking at any long trades. We'll be bearish until the DOW begins to move up (and we may wait until we have a close above 11,000).

With the skittishness in the markets, the turmoil in the Middle East, and comments due from Mr. Bernanke this week, the word of the week is "nimble". We're more likely than normal to lock in profits (where in a more stable market we may give our trades a bit more leash). These days are not for the faint of heart, but profits are there for the taking, for those bold enough to trade.

How to Save Money on Auto Insurance - WikiHow

How to Save Money on Auto Insurance - WikiHow

A good article on insurance in general, and car insurance in particular.

Market Update

The DOW is once again running under 11,100. A close below this level of support will be significant. Likewise the NASDAQ is threatening 2,100.

Should these levels be broken at the close, then expect the markets to sour quickly. We've changed our short-term bias to neutral/bear and are looking for potential puts--we're not entering short trades yet--we need to break those support levels first, but if we do, we'd like to be prepared. Certainly we'll not be looking for new longs.

Shorts we're watching include: BDK, CNC, ESV, FRK and GGC (for now). We'll see how things shape up over the next few days.

New parents' top 10 money mistakes - MSN Money

New parents' top 10 money mistakes - MSN Money

A good article detailing common investing mistakes for parents (but applicable to everyone, even those without children).

Review of important insurance concepts, retirement, wills, etc.

Is a 7-year-old too young for credit? - MSN Money

Is a 7-year-old too young for credit? - MSN Money

This is an incredible(!) story detailing a couple's thoughts about getting their 7-year-old a credit card.

While we at OptionsDetective don't necessarily feel credit cards are "bad", it is clear that irresponsible credit card use (and the subsequent increase in personal debt) is a major concern for the American public.

Certainly teaching your children proper money management is critical to your child's future financial freedom. However we're not sure that providing easy access to credit is the best way to accomplish this goal.

Worth reading, and thinking about the implications....

Mid-week update

The markets are a bit skittish today, especially after the Korean missle tests. Consequently with the markets' drop today we've been stopped out of our long positions. Even so, we've locked in a nice gain in OII, and a reasonable gain in R. On the other hand SHLD was closed at a small loss. On the whole, a good week.

We'll now be poised looking for a rebound in the markets, and new trades for the coming week.

Week of July 3

Market Overview

Well, it seems Mr. Bernanke had some good news for the markets last week as we were up strongly for the week, with the DOW closing at 11,150 and the NASDAQ at 2,172. We'll need to hold the 11,100 and 2,150 levels as they've now become lines of support.

At this point, we're cautiously optimistic--and are now considering new long positions. However, a drop below the above support levels will quickly squelch that optimism, and put us back into a neutral stance.

Note that today (Monday) will be a "short" trading session (ending at 1:00 PM EST) due to the holiday. Expect low volume as well, as most traders are off for the holiday.

Review of Last Week

Last week was a good week for us, with our recommended positions performing quite well. Our first open position, BEN was made on the 27th--and was the only position opened that day. (Remember our rules--if the markets are down, only shorts are viable entries.) BEN turned out to be a short duration trade, as we exited on the 28th on the reverse Lincoln't hat formation.

OII faired exceptionally well, with an entry on the 28th (or the 29th if you were a bit more conservative). This stock is now up tremendously. We'll be watching this one closely to protect our profits.

R also was up smartly, and again we're looking now to protect our profits.

SHLD started up quickly, but has since retraced its position. We may exit this one should it drop below the 7 DSMA--we'll be watching this one closely today.

All things considered an excellent week!