The Options Detective Blog

OptionsDetective site update

2008-01-09T08:57:00.001-05:00

Hi everyone--

Our website (www.OptionsDetective.com) is undergoing renovation--

As many of you know, OptionsXpress is moving away from the "JavaCharts" we've all come to know and love, and are moving toward their "FleX Charts" and "XPress Charts".

We'll be redoing our tutorials, and our website to reflect these changes so that you'll still be able to use these charting packages with our "TTC" templates (as well as the old "JavaCharts").

Thanks for your patience as we work through these changes.

In the interim, please stay tuned to our blog, and please feel free to email me at any time if you prefer (dan@optionsdetective.com)

d

3 lies we tell about money - MSN Money

2007-10-12T14:51:00.000-04:00

3 lies we tell about money - MSN Money

Some "Money Scripts" in a fashion...

Jim Cramer's bad bets - MSN Money

2007-08-22T10:59:00.000-04:00

Jim Cramer's bad bets - MSN Money
Hmmm...do the "experts" really "know"?

Top 10 money drains

2007-08-13T13:36:00.000-04:00

Top 10 money drains
It indeed is the little things that add up--or as your grandmother used to say "watch the pennies and the dollars will take care of themselves".

Credit cards can make you fat - MSN Money

2007-08-02T08:18:00.000-04:00

Credit cards can make you fat - MSN Money
Another really good reason to drop those extra credit cards!

Online Security Risks: Pharming

2007-06-25T08:53:00.000-04:00

Online Security Risks: Pharming
A new method of "stealing" online passwords (like to your broker account(!)) has started--"Pharming" is the practice of redirecting you to a phony website, even when you type in the correct address. Please take the time to read this notice.

Help Your Kids Become Millionaires

2007-06-15T11:47:00.000-04:00

Help Your Kids Become Millionaires
For those with children, this is yet another article showing the power of investing small amounts ($1/day) over a long time. Also reviews "DRIPS" (dividend reinvestment plans) available from some companies.

Why your kids expect to be rich - MSN Money

2007-06-13T12:47:00.000-04:00

Why your kids expect to be rich - MSN Money
Talk about "money scripts" and things we learn about money as we're young.

How to pay off $300,000 of debt - MSN Money

2007-05-16T10:39:00.000-04:00

How to pay off $300,000 of debt - MSN Money

Strategies for reducing/eliminating debt.

My Way Finance

2007-05-07T10:55:00.000-04:00

My Way Finance: "Her 29-year-old daughter, a graduate student with an annual income of less than $20,000, qualified for a mortgage of $600,000 with no money down, split into two different loans at 8.75 percent and 12.5 percent interest rates.
With income from tenants, which didn't come right away, Beatty's daughter thought she could afford monthly payments of nearly $5,000."

This is a bit of a shocking article...amazing that folks have been able to qualify for mortages with perhaps unrealistic expectations.

Why rent? To get richer - MSN Money

2007-05-07T08:41:00.000-04:00

Why rent? To get richer - MSN Money

This is a bit of a contrarian view, but it points out the power of the markets. Not sure I'm willing to jump off the real estate stream just yet, but it is good food for thought.

Money trouble? It's your own fault - MSN Money

2007-04-09T16:54:00.000-04:00

Money trouble? It's your own fault - MSN Money

An interesting take on personal responsiblity and finance.

5 audit red flags

2007-03-27T15:12:00.000-04:00

5 audit red flags

Another tax story--this time, some flags that might trigger an audit. Worth the time to review.

Should you do your own taxes - MSN Money

2007-03-26T09:37:00.000-04:00

Should you do your own taxes - MSN Money

As tax season approaches, there are always some good stories on the subject. This one relates how important it can be to have expert advice when preparing your tax return.

The 13 Most Overlooked Tax Deductions - Kiplinger.com

2007-02-04T15:53:00.000-05:00

The 13 Most Overlooked Tax Deductions - Kiplinger.com

Well, it's tax time, and here's a list of some common overlooked deductions. Make sure you're taking advantage of all the deductions to which you're entitled!

Super bull: Super Bowl myths debunked - Business of Super Bowl - MSNBC.com

2007-01-31T17:21:00.000-05:00

Super bull: Super Bowl myths debunked - Business of Super Bowl - MSNBC.com

Myth #1 predicts the direction of the stock markets--seemingly with an 80% success rate! What's in store for this year's game? Well, you'll have to read the article to see if we should be bearish with the Bears, or bullish with the Colts (or vice versa!)

Debit cards fuel overdraft outrages - The Red Tape Chronicles - MSNBC.com

2007-01-30T20:56:00.000-05:00

Debit cards fuel overdraft outrages - The Red Tape Chronicles - MSNBC.com

Article detailing some of the potential pitfalls of debit cards. While better for most than credit cards, debit cards are not totally risk free. Worth reading for those using debit cards.

The Simple Dollar » The FICO Battle: Ten Common Tactical Mistakes When Dealing With The Credit Score Blues

2007-01-23T14:42:00.000-05:00

The Simple Dollar » The FICO Battle: Ten Common Tactical Mistakes When Dealing With The Credit Score Blues

Another article on the strategies involved with Credit Score (FICO) and what helps your score, and what hinders your score.

Howstuffworks "Is my brain making me buy things I don't need?"

2007-01-23T12:44:00.000-05:00

Howstuffworks "Is my brain making me buy things I don't need?"

A VERY interesting study of the brain responses between "spenders" and "savers". Seems there MAY be a biological basis for at least some of our spending habits!

Craziest tax write-offs you've ever heard of (Page 1 of 3)

2007-01-23T12:14:00.000-05:00

Craziest tax write-offs you've ever heard of (Page 1 of 3)
As tax season approaches, we sometimes hear of humorous tax stories. This article is one of the more entertaining ones, detailing some tax write-offs that have been claimed. I'm sure some of these will bring a smile to your face.

Stock Market Criticality -- Physics News Update 765

2007-01-03T09:13:00.000-05:00

Stock Market Criticality -- Physics News Update 765An article for the true geeks...a comparison of market behavior prior to crashes and comparing it to the physics of some natural phenomenon. Very interesting, and potential for a predictive model.

How to Save Money - WikiHow

2007-01-02T13:58:00.000-05:00

How to Save Money - WikiHowSimple but effective tips on money management.

Perfect credit? You don't need it - MSN Money

2006-12-28T08:11:00.000-05:00

Perfect credit? You don't need it - MSN Money
A good article on the FICO score.

Weird stuff that hurts your credit - MSN Money

2006-12-10T10:01:00.000-05:00

Weird stuff that hurts your credit - MSN Money
Nice article on credit cards, FICO scores, and how some "quirks" in the system can hurt your score.

How to Raise Children to Be Rich - WikiHow

2006-11-27T12:30:00.000-05:00

How to Raise Children to Be Rich - WikiHow
Another article on monetary beliefs and how they shape our views (and our childrens' views) about money. As with any advice, some applies, and some does not, but it's always worth a few moments to read and digest.

Credit Card Lowdown: The Lazy Man's Guide to Budgeting: 101 Painless Ways to Cut Spending

2006-11-13T19:36:00.000-05:00

Credit Card Lowdown: The Lazy Man's Guide to Budgeting: 101 Painless Ways to Cut Spending
Interesting article on saving money and budgeting, with some good ideas.

WP: Hackers target online stock accounts - washingtonpost.com Highlights - MSNBC.com

2006-10-24T10:03:00.000-04:00

WP: Hackers target online stock accounts - washingtonpost.com Highlights - MSNBC.com
This is something every online investor should read--always pays to be vigilant when trading online!

Trading Spreadsheet

2006-10-17T09:00:00.000-04:00

Just wanted to post a note that we're almost finished with our trading spreadsheet--folks have been asking how to track trades and calculate profit, and we've decided to make the same spreadsheet we use to track our own trades available to our optionsdetective.com members.

We're also making some changes and updates to the website at the same time--we've moved some content, implemented a new "shopping cart" and will be adding the spreadsheet soon once we've finalized everything.

Please drop by for a click or two, then fill out our Feedback Form to let us know what you think or if you have any suggestions for the website or the blog.

Thanks for supporting OptionsDetective.com!

Today's ‘day traders’ do their homework - Stocks & Economy - MSNBC.com

2006-10-17T08:56:00.000-04:00

Today's ‘day traders’ do their homework - Stocks & Economy - MSNBC.com

Can day traders do well? Can "amateurs" beat the pros at their own game? This is a good article for those of us choosing to invest on our own.

Top 10 investing scams - MSN Money

2006-10-17T08:55:00.000-04:00

Top 10 investing scams - MSN Money

Nice article detailing some of the things to watch out for in the investing world.

12,000 for the DOW?

2006-10-12T11:46:00.000-04:00

Our remarkable run up is continuing, with the DOW now seeming to be breaking from it's flag formation. We are over 11,900 now and with 12,000 just a short distance away. While we'll wait for the close to confirm holding 11,900 things look promising at this time.

12,000 does represent significant "round number" resistance--and we will be watching this very closely. We've not yet seen much of a "correction" during the DOW's bull run these past few weeks, and I suspect that we'll see some profit taking as this level is approached.

Watch you open long positions carefully for signs of faltering--remember--we're in "uncharted waters" here...and it will pay to remain ever vigilant.

Good trading!

The DOW did it! A new record!

2006-10-03T16:51:00.000-04:00

Well, we did it today! Closed above the previous high close, setting a new all-time record for the DOW (both in terms of closing level, as well as all-time intra-day high).

The DOW ended the session at 11,727.34, wiping out the previous record of 11,722.98.

All very good news for the bulls.

One more tidbit--WCG has finished up today, and is a VERY nice TTC-a long trade tomorrow, if both that stock and the markets are up. Keep an eye on this one!

Congrats to the DOW

2006-10-03T13:12:00.000-04:00

Well, the DOW went above its all-time high of 11,750 today--reaching (so far) a high of 11,755.

Next will be to see if we close above the all-time high close of 11,722 (we'll have to wait and see on that).

No matter how you look at it, this is good news for the bulls!

Not quite yet...

2006-09-29T09:57:00.000-04:00

Well, it seems we're trying for that record, but maybe running out of steam? Markets are down this Friday just after the open. We'll see if they recover, but I'm a bit pessimistic as it's a Friday after all...

In any event, next week is shaping up nicely. Here are some of my favorites to keep an eye on for next week:

ALB - forming a converging triangle, and perhaps triggering TTC...this one could go either way.

ACL - a nice TTC-a, but faltering a bit today. May be a nice entry next week.

AZO - this has moved very fast. Waiting for some profit taking, and a trigger, and then perhaps a new entry. A lot has to happen though for all of these events to "line up".

BDX - finishing a TTC-b and breaking resistance at the same time. Could be a very nice entry shortly.

COO - needs to confirm. If so, this is a wonderful looking chart and TTC-a.

EBAY - simiar to BDX--needs to break resistance, but is forming up to do so, and completing a TTC-b at the same time.

KSS - needs to confirm to complete a nice TTC-a. However, resistance is close, so you may need to be nimble on this one.

NVDA - hasn't quite triggered yet, but if it does so, and then confirms will be a nice TTC-a

JCP - a bit more speculative trade, this one has been in a wide channel for the past six months. It's now reached the top of the channel and may be headed back down. A possible short trade for the very brave.

SNDK - another that needs to confirm. This one has moved down quite a bit though, and it may be prudent to wait for a TTC-b on this rather than a TTC-a.

TXI - a channel breakout, and a likely good entry today or Monday.

UNH - similar to SNDK--has had quite a drop, and needs to confirm. Perhaps better as a TTC-b than a TTC-a.

WCG - a very nice TTC-a should it confirm. A very nice chart, and perhaps the best of the lot if it finishes above the 7 DSMA.

Good trading to all!

DOW All-Time Record Threatened

2006-09-26T15:17:00.000-04:00

Just something to note and watch--we're ready to make some history here. The DOW is very close to it's all-time high levels.

At this time (9-26-06) the DOW is sitting at 11,654 (with about 45 minutes left before the close). Looking at some important benchmarks:

The Dow's six-year closing high rests at 11,642 - if we stay put, we'll break that today.

Its absolute six-year high rests at 11,670 - certainly well within our sights and so far today we were up to 11,660...so that was threatened today.

Its all-time closing high rests at 11,722.
Its all-time high rests at 11,750.

Both of those are targets.

Stay put--it'll be an exciting few days.

Update - Markets are moving!

2006-09-13T09:16:00.000-04:00

Well, it's been another interesting week--DOW was up over 100 points yesterday, and is threatening 11,500. It may not be able to break and hold that for a few days, but "bullish" is our theme word.

Consequently, we're watching quite a few stocks for potential entries. As with all the suggestions here, many still need to confirm, or break resistance prior to getting in, but this is the list we're watching right now:

BDX - TTC-a needing to break resistance

CERN - ditto

ESRX - right at resistance. A good entry if it and the markets are up today

GILD - another TTC-a right at resistance

MHS - ditto

MSTR - this one brok resistance yesterday. Today's an entry if it's up along with the markets

DGX - finishing a TTC-a today. Perhaps the best of the lot if the template completes

RIMM - TTC-a at resistance

SYMC - nice, but a touch underpriced at $19

SHOO - again, a TTC-a at resistance

Good trading all! Lots to pay attention to this week!

The best online brokers - MSN Money

2006-09-01T13:11:00.000-04:00

The best online brokers - MSN Money

MEASURING THE ONLINE BROKERS

Guess which broker came out on top?

How many credit cards is too many? - MSN Money

2006-09-01T13:09:00.000-04:00

How many credit cards is too many? - MSN Money

Another article on credit card use, and "how many is too many".

Things we're watching...

2006-08-31T13:16:00.000-04:00

There are a number of good option entries shaping up...here's a list of a few we're watching now (some nice TTC-a longs--some still need to confirm, but good looking charts):

COO - has broken resistance after a TTC-a, but forming a bit of a "hat" now...will watch this to see if it moves up or down over the coming days.

ICE - nice chart that needs to make that final step above resistance prior to going long.

MER - another really nice TTC-a that needs to "confirm". Might be really nice next week.

PCAR - same with this--should a good confirm happen, this could be a nice entry next week.

TK - another waiting for a confirm. This has a bit more of a "channel" feel to it, but is one we'll be watching for an entry.

UBB - classic TTC-a. Some resistance coming up at $75 though.

Cards that hurt your credit rating - MSN Money

2006-08-31T09:41:00.000-04:00

Cards that hurt your credit rating - MSN Money

Another article on credit cards, and how your credit (FICO) score can be adversely affected just by owning a credit card. Worth reading, especially if you have one of the new "no limit" credit cards (even if you pay it off each month!)

Once more, it proves it pays to check your credit rating periodically.

5 lessons the rich can teach you - MSN Money

2006-08-31T08:43:00.000-04:00

5 lessons the rich can teach you - MSN Money

This is yet another good money management article from MSN. Worth the read.

NOTE: If you've not yet taken the "Personal Financial Basics" course from EMI/EWI you should consider it. It's given on Mondays at 7:00 PM EST and covers a good deal of sound money managment, debt control, long-term investing strategies, etc.

Tuesday's Tale

2006-08-29T08:32:00.000-04:00

Well, it's been another interesting week, and today should be entertaining. We have a Fed meeting today, and expectations will change should the Fed drop any "hints" as to future interest rate changes--no matter what, it'll likely cause some volatility. As most news is viewed as "bad news" look for a drop in prices... still things could move up with good news...stay tuned!

As for the markets--although we dropped below support at 11,300 on Friday, we're back above now, with a nice close yesterday (Monday) at 11,352. So long as we stay above 11,300 we remain bullish on the indices.

Likewise, the NASDAQ is now challenging resistance at 2,160 and moving above 2,175 would be a very bullish sign. Likewise the S&P is also challenging it's resistance level of 1,300 (and closed at 1,301 on Monday). Staying above this is also a good sign.

So in summary, things are looking up...we're at or above some significant resistance numbers. Our indices, after some large moves a short while back, look to be now completing their "flag" formations, and are indicating a likely move to the upside.

We're bullish, and will remain so, so long as our support levels are not broken. We are looking only for new longs, and any open shorts we're looking for an "excuse" to exit.

Wishing you a good week on the trading floor.

Watching this week

2006-08-22T08:29:00.000-04:00

We're feeling bullish this week, but remember the indices MUST be moving in our direction prior to entering any new long trades. There is a good possiblity the DOW is going to "digest" it's big move last week, and perhaps form a "flag" here for a few days.

While it does so, we'll monitor it, but once it starts to move again (either up or down) from the flag, we'll look for new entries. We're expecting a few days of rest, and then a continuation of the up trend. Consequently, some new longs we're keeping our eyes on include:

TXU - a very nice TTC-a entry. We'll need this and the markets to be up to enter a new long.

RAI - a nice breakout above resistance on clearly higher volume happened on Friday. A move up is expected shortly. Another nice long.

FCX - a breakout from a converging channel, on nice volume. Yes indeed, another nice long entry.

WCG - one to watch, but last time I checked it had little open interest. Be careful to look at that, and the spreads on price prior to considering this. Still, a nice looking chart.

A few others we're keeping our eye on: HAR, RAIL, CAM, BUCY

One more needs to confirm, but the trend on this chart is very nice--CEO.

Those will be enough to keep us busy this week, but again, the key is that the markets MUST be moving in our direction. Given the schizophrenic nature of the markets lately, we'll want to be sure all our ducks are marching in the same direction prior to entering new trades.

Good trading to all this week!

Two more addtions, both "channel breakouts": NEU and TRMB. Both of these might be new entries today. Very nice breakouts on strong volume! Both have made big moves (so we'll need to be wary of profit taking) but ones to watch certainly.

End of the Week Update

2006-08-18T08:04:00.000-04:00

Well, it's been a bit of a different week, so perhaps a "different" update at the end of the week (rather than at the beginning or the middle) fits.

At our last update, we'd just seen another rapid drop in the DOW (and other indices) from 11,200 to below 11,100. At that time, we'd set those as important levels--sustained trading below 11,100 as a bearish sign, and a movement above 11,200 as a bullish sign. However, I'd expected us to channel between these levels for a while.

Instead, the markets made a major move this week, completely blowing past 11,200 and in fact moving above and closing(!) above 11,300. While I expect we may give back some of those profits today (Friday) this is nevertheless a strongly bullish sign.

We are now firmly above previous resistance levels, and have essentially completed a "double-bottom" in the DOW. These are all good signs for long traders.

So what now? Well, now that we've broken resistance, those levels now becomes support. So:

DOW
For the DOW, 11,300 is now our support level. We don't want to see a fall below this. Should that happen and we fall below 11,300 we'll hold off any new longs until we move back up. Certainly 11,200 is now a solid floor--breaking that level will now be a strong bearish sign. Again, look for some profit taking today, but next week will likely be a "green light" for new longs, and we'll be "shopping" on our watch list today, looking for potential entries.

NASDAQ
The NASDAQ had been in a nice descending channel. That pattern has been broken these past few days. On Tuesday we moved above one level of resistance at 2,100; on Wednesday we broke a secondary resistance level around 2,140; and then on Thursday we moved and closed above 2,150--a very strong showing for this index.

What's next? QAgain, probably some profit taking, but clearly the "character" of this chart has changed. Again, we're looking for the green light next week for new longs. A move above 2,175 would be a wonderful confirmation.

S&P
Again, all resistance levels for the S&P have been broken. Profit taking will be expected, and then a move up next week.

Of course, we could always get "bad" news (in the Middle East, etc.) that could put a damper on this, but right now, we're looking forward to next week. I'd also expect that this may be a bit of an extended run, so looking for positions that expire later (say the end of the year) rather than sooner make sense.

Good trading!

Website error - our apologies!

2006-08-17T21:16:00.000-04:00

Sorry folks, but it seems we had a database error on our website (http://www.optionsdetective.com) and folks were unable to register for a time.

It seems that we've had so many folks signing up, that we'd exceeded the capacity of our original database design, and it wouldn't allow any additional entries. While that was inconvenient, it was (in a way) good news!

In any event, please accept our sincere apologies--the site has been repaired, and should be working normally now.

In the future, if you ever notice any issues (or have any questions) please email us at help@optionsdetective.com

Thanks!

Mid-week Update

2006-08-10T13:18:00.000-04:00

Just a quick note--with the cautious words from Mr. Bernanke, the price of oil, the Mideast and the London terrorist activity, the markets have reacted negatively.

We're now significantly under our "bullish" level of support (which was at 11,200) and have fallen past 11,100 and are threatening 11,000.

Consequently, we are now neutral-bear in our trading bias. We'll need to be above 11,100 to even consider any new longs, and realistically we'll need to break and hold 11,200 to be truly comfortable with new calls.

Short-term puts are more likely at this stage, although given the schizophrenic markets, we may consider trades on their own merits (especially channel breakouts).

A difficult week to be sure.

Mid-Week Update

2006-08-08T08:35:00.000-04:00

Well the big news this week is today's announcement from Mr. Bernanke on interest rates. Most expect that this will be when we "pause" the rate increases (in fact some have speculated that a rate reduction may be in the works, but frankly I think this is very unlikely).

The markets will react no matter what the news, but should another increase occur, expect a rapid drop in the markets. However, I (like most) now expect rate increases to stop. Signs are showing the economy has slowed (some might say too much) and unless there's a major surprise, Mr. Bernanke is likely to pause with the increases.

The key will be whether he hints at future direction. Will this be a "pause" with rates to increase at the next meeting, or will he hint that we're done with increases for the forseeable future (or possibly have a rate drop)?

All speculation at this point, but what is certain is that the markets will react.

As for the markets, the DOW has done a nice job holding above 11,200--our previous level of resistance (and now support). Consequently, we're bullish on the DOW, so long as it remains above 11,200.

We're a bit less bullish on the NASDAQ--it's had trouble with 2,100--a major line of resistance. We bounced off this recently. However, good news today from the Fed may provide the momentum to break this level. Stay tuned--but for now, caution is the word on the NASDAQ, as we're neutral to bearish here.

Similarly, the S&P is right at resistance (1,275). We need to move above (and hold) this level to confirm our bullish tendencies. Watch for a bounce off this level though, and be prepared to close open longs should the markets quickly reverse themselves should they bounce off resistance. Right now, we're neutral on the S&P.

Clearly, we're at a "tipping point" here--and the Fed is the key. If we get good news, look for good volume breaking resistance on all the indices. If the news is bad, expect the indices to bounce off resistance levels and head back down.

The other big news this week is (of course) oil, and the closing of the BP pipeline in Alaska. It remains unclear whether this will have a major affect on the markets in the future, but as oil has been a driving force lately, we expect some repurcussions to show in the markets. Bad news from the Middle East may compound any effects from the BP pipeline, so there are many potential interactions here. The key is to stay "nimble" with any open trades.

A final note this week will be to look at CME--this stock has shown a nice breakout on clearly higher volume--a result of the announcement that CME will be added to the S&P 500 index (which means that institutional investment firms will need to buy this stock for their index funds). This may move up nicely over the coming weeks, especially should Mr. Bernanke's news be favorable. One to watch, certainly.

Good trading to all this week!

Top of the channel?

2006-08-01T09:48:00.000-04:00

A word of caution--it seems the markets (and the DOW in particular) maybe bouncing off resistance at 11,200 and are heading back down.

Again, we'll reiterate that we need to see another move over 11,200 and a close above this level prior to establishing new long positions.

Patience is the key word this week, although aggressive traders may be trading short now. If you choose to do so, set your stops tight!

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

2006-07-31T09:25:00.000-04:00

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

2006-07-31T08:39:00.000-04:00

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

2006-07-26T14:06:00.000-04:00

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

Important Market Levels

2006-07-26T08:36:00.000-04:00

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.

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

Midweek Update

2006-07-26T08:21:00.000-04:00

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

2006-07-18T13:19:00.000-04:00

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

2006-07-17T13:27:00.000-04:00

How to Save Money on Auto Insurance - WikiHow

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

Market Update

2006-07-12T11:07:00.000-04:00

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

2006-07-11T15:10:00.000-04:00

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

2006-07-06T10:03:00.000-04:00

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

2006-07-05T11:18:00.000-04:00

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

2006-07-03T08:54:00.000-04:00

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!

Week of June 26

2006-06-27T09:47:00.000-04:00

Market Overview

The key event this week is Mr. Bernanke's discussions on Thursday. It seems that the markets are waiting to see what happens there--if the news is positive, then I expect we'll have seen the end of the bear's run.

If however the news is negative, and Bernake "hints" of (or worse states) more interest rate hikes in the future, the markets will likely drop. Even if the news is neutral, the markets may likely react negatively. Certainly an interesting week is coming up!

Stocks to Watch

The stocks we're watching this week include:

BEN (Franklin Res. Inc.) - this is a short trade. Currently in a descending channel, it's bounced off the top of that channel and is headed back down. This may be a short-term trade, as it may move up again as it approches the bottom of the channel.
OII (Oceaneering Intl. Inc.) - a nice trending chart, even after it's split on 6/19. Currently breaking resistance and setting a new high. A nice long entry.
R (Ryder System Inc.) - another nice trending chart that has recently broken resistance. Expect the trend on this one to continue up
SHLD (Sears Holdings Corporation) - this is one we're watching for a confirmation and a move back to the upside. While not a trade yet, this one is poised to make a move--if it does, it'll be a nice long entry. If it doesn't and it breaks support at $152, look for a short entry.

Welcome to the OptionsDetective.com Blog!

2006-06-26T11:42:00.000-04:00

The OptionsDetective.com blog will be used primarily as a forum to review and track our stock options selections.

If you've ever wondered if you could make money in the stock market, then you've come to the right place. Each week we'll be reviewing the stock market and posting our "hot list" of stocks to watch for the week.

Each stock will have passed our "screening process" and then a position entry (a "buy" order) will be signaled using a "technical analysis" and a review of that stock's chart.

For more information on our selection and evaluation process, please see our website at: http://www.optionsdetective.com

Then we'll track the performance of each stock as the days and weeks progress. By following our selections, and by using our techniques, you can learn to use these strategies to make money in the stock market!

It isn't complicated, it just takes a bit of time to learn, and just a few minutes a day to review your stocks. That, and a bit of practice, and you too can be successful--and that's what our blog is for--to help our students hone their skills, and become successful stock option traders!

So--we hope you enjoy your visit, and we hope you'll learn a bit about options trading while you're here. Please visit often (or better yet--subscribe to our RSS feed!) and thanks for stopping by.

Here's to your success!

The Options Detective Blog

OptionsDetective site update

3 lies we tell about money - MSN Money

Jim Cramer's bad bets - MSN Money

Top 10 money drains

Credit cards can make you fat - MSN Money

Online Security Risks: Pharming

Help Your Kids Become Millionaires

Why your kids expect to be rich - MSN Money

How to pay off $300,000 of debt - MSN Money

My Way Finance

Why rent? To get richer - MSN Money

Money trouble? It's your own fault - MSN Money

5 audit red flags

Should you do your own taxes - MSN Money

The 13 Most Overlooked Tax Deductions - Kiplinger.com

Super bull: Super Bowl myths debunked - Business of Super Bowl - MSNBC.com

Debit cards fuel overdraft outrages - The Red Tape Chronicles - MSNBC.com

The Simple Dollar » The FICO Battle: Ten Common Tactical Mistakes When Dealing With The Credit Score Blues

Howstuffworks "Is my brain making me buy things I don't need?"

Craziest tax write-offs you've ever heard of (Page 1 of 3)

Stock Market Criticality -- Physics News Update 765

How to Save Money - WikiHow

Perfect credit? You don't need it - MSN Money

Weird stuff that hurts your credit - MSN Money

How to Raise Children to Be Rich - WikiHow

Credit Card Lowdown: The Lazy Man's Guide to Budgeting: 101 Painless Ways to Cut Spending

WP: Hackers target online stock accounts - washingtonpost.com Highlights - MSNBC.com

Trading Spreadsheet

Today's ‘day traders’ do their homework - Stocks & Economy - MSNBC.com

Top 10 investing scams - MSN Money

Recommended Reading List

12,000 for the DOW?

The DOW did it! A new record!

Congrats to the DOW

Not quite yet...

DOW All-Time Record Threatened

Update - Markets are moving!

The best online brokers - MSN Money

How many credit cards is too many? - MSN Money

Things we're watching...

Cards that hurt your credit rating - MSN Money

5 lessons the rich can teach you - MSN Money

Tuesday's Tale

Watching this week

End of the Week Update

Website error - our apologies!

Mid-week Update

Mid-Week Update

Top of the channel?

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

11,200 and the DOW

10 nasty money habits to kick - MSN Money

Important Market Levels

Midweek Update

Market Update

How to Save Money on Auto Insurance - WikiHow

Market Update

New parents' top 10 money mistakes - MSN Money

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

Mid-week update

Week of July 3

Week of June 26

Welcome to the OptionsDetective.com Blog!