Your Almost Daily Bit of Wall Street Wit & Wisdom

surfers

Swami’s Beach, Encinitas, CA, h/t californiabeaches.com

“Charting is a little like surfing. You don’t have to know a lot about the physics of tides, resonance, and fluid dynamics in order to catch a good wave. You just have to be able to sense when its happening and then have the drive to act at the right time.”
— Ed Seykota

 

Your Almost Daily Bit of Wall Street Wit & Wisdom

Evil queen

h/t Disney

“That monitor is not your friend.  It’s basically a mirror, looking at all the psychological imperfections it can find in you…it makes you want to do overtrading…you act on impulse, it leads to errors, it leads to exhaustion, and the worst thing that happens is it leads to frustration.  And the frustration is where it starts tearing at the old trader’s soul.  Try to plan the trades that you really want to do.”
— Larry Pesavento

Don’t stare at the market.

Don’t act on impulse.

Don’t overbuy a position.

Don’t add to a losing trade.

Don’t overtrade.

Plan your trade.

Know what you’ll do if you’re wrong.

Know what you’ll do if you’re right.

Subscribe to Options Hotline today to vie for fun and profit.

Happy Friday and enjoy your weekend!

Best regards,

Steve

A Note On Volume

Volume can be a useful tool for traders.  Trading volume tallies the number of shares (for equities) or contracts (for futures) traded on a given day.

Price is king, but volume can indicate the force behind a price move.  This provides valuable information.

For example, on our daily candlestick chart of JPM below, note that over the past few weeks, volume (overlaid on the chart) on down days (black bars) has been greater than volume on rebounds (red bars).

JPM chart

Chart by Steven Sarnoff h/t stockcharts.com

Low volume on a rebound is not a good sign.  It tells me the bounce is more of a short-covering rally and adds weight to the evidence in favor of a continuation lower.

As with all indicators, there is no certainty; there is only probability.

Subscribe to Options Hotline today to vie for fun and profit.

Best regards,

Steve

 

Don’t Chase

JPM price chart

Chart by Steven Sarnoff, h/t stockcharts.com

Options Hotline Update, FYI: Our JP Morgan Chase reco closed +41% in 1 day on a 2% move in the underlying shares, with an always known and strictly limited risk!

That’s Superleverage Power on Display.

Our recommended option trade for subscribers, the JPM December $110 put, triggered yesterday at $2.70 and closed today at $3.80.

JPM closed today’s session eyeing its recent low and a potential visit to the area of its August nadir.  The big banks are getting beaten down.

Resistance is now at $112.41-$114 and $116-$120.  Support is at $109-$110 and $103-$107.

Is that the type of options action you’re looking for?

I’m now in my 21st year at the helm, as the newsletter created by my father approaches its 31st year of publication.

Subscribe to Options Hotline today to vie for fun and profit.

Best regards,

Steve

Your Almost Daily Bit of Wall Street Wit & Wisdom

“Probability is not a mere computation of odds on the dice or more complicated variants; it is the acceptance of the lack of certainty in our knowledge and the development of methods for dealing with our ignorance.”
— Nassim Nicholas Taleb, Fooled By Randomness

You can’t tell the market what to do.  It goes where it wants.  You never have certainty, only probability.”

Subscribe to Options Hotline today to vie for fun and profit.

Best regards,

Steve