Your Almost Daily Bit of Wall Street Wit & Wisdom

UCSD Geisel Library

UC San Diego’s Geisel Library, h/t sandiegomagazine.com

“You will come to a place where the streets are not marked.
Some windows are lighted. But mostly they’re darked.
A place you could sprain both your elbow and chin!
Do you dare stay out? Do you dare go in?
How much can you lose? How much can you win?

And IF you go in, should you turn left or right…
or right-and-three-quarters? Or, maybe, not quite?
Or go around back and sneak in from behind?
Simple it’s not, I’m afraid you will find,
for a mind-maker-upper to make up his mind.”
— Dr. Seuss, Oh The Places You’ll Go!

Your Almost Daily Bit of Wall Street Wit & Wisdom

William O'Neil warning about bear markets

h/t Joseph Fahmy, @jfahmy

“Be patient, keep studying, and be 100% prepared.  Later, at the least expected time, when all the news is terrible, winter will ultimately pass and a great new bull market will suddenly spring to life…So get prepared and do your homework.  Create your own buy and sell rules that you will constantly use.”

That’s some bear market investing wisdom from William O’Neil.

Your Almost Daily Bit of Wall Street Wit & Wisdom

“Embrace selloffs because that’s when the market gives you its best clues.”
— Joseph Fahmy, @jfahmy

Keeping your eyes open to developing divergence between the action of individual stocks and the market can provide powerful information.

If a stock is holding up well while all around are down sharply, that tells you something good.

Best regards,

Steve

Your Almost Daily Bit of Wall Street Wit & Wisdom

be prepared

h/t John Lee Post

“Over prepare.  Do the work with intensity and focus – it’s that attitude that starts attracting people/opportunities.  You start believing in yourself.  You start accomplishing things you weren’t supposed to accomplish.”
— Ian Cassel, @iancassel

I was not a Boy Scout, but I believe they’ve got a good motto, “Be Prepared.”

You should have a complete game plan for each trade.  You know what to do if you’re right and what to do if you’re wrong.

You are in a state of readiness so that surprises don’t surprise you.  Negative surprises won’t take you out.  You’ll be there to reap the rewards when positive surprises come your way.

Have a great weekend!

Best regards,

Steve

DIS Here

Last Sunday’s Options Hotline headline for our Disney play was, “Content is King.”  This morning, Disney (DIS) shares gapped up 5%, up to next resistance, following yesterday afternoon’s positive earnings report.

This gave Options Hotline subscribers the opportunity to multiply their money on our recommended call options, triggered 11-04-19 at $3.15, traded 11-08-19 at $6.87, +118% in 4 days, with an always known and strictly limited risk!

That is Superleverage Power on Display.

Warren Buffett and Charlie Munger describe Disney as, “…kinda like having an oil field where you pump out all the oil and sell it and then it all seeps back in over seven or eight years.”

I can’t guarantee that all my recos will become multipliers, but I do my best each week to find option winners for you, my great subscribers.

Subscribe today to vie for fun and profit and stay a step ahead of the crowd.

Relax 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