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_It's here! The new earnings module on Chaikin Analytics. If you like to play earnings with options, you have a great new edge. On Tuesday March 8th, there will be complete end to end module demo with guidance about how to trade earnings.
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Up .5% on the year. Less if you factor in commissions. Beating the market, yes, but mostly sitting on our hands until we clear the bearishness.
Utilities are in favor, an NI flashed a Money Flow Buy signal before gapping up on earnings. We'll see if we can get filled at a slightly lower price. Here's what the trade will look like based on the $9992 worth of $N1 shares I hope to buy. I'll be using the 30 days SMA as support.
Buy 456 Shares of NI
Hopefully, I can get filled at a lower price. I hate to chase stocks after earnings gaps.
We're not out of the woods yet. Next week, co-founder Sandy Chaikin will show you some ways to trade the market bearishly with Chaikin Analytics. Always better to be prepared in case the market rolls over. .
A classic Chaikin Analytics set up for a bearish trade on Anadarko Petroleum ($APC). Earnings are behind it,. It's overbought, with persistent recent negative money flow (though it turned weakly positive during its recent up move), weak relative strength and a very bearish power gauge. Today, Chaikin Analytics flashed a relative strength sell signal, which is a longer term signal. These don't always work out, but they are among the most powerful signals on the platform. I used a high probability call credit spread to give me a win even if the stock goes sideways or even up a little from here.. Breakeven is the short strike plus the credit received. If $APC closes below $40.68, I'll profit by at least a penny at expiration. Max gain is below $40. I plan on taking profits if the spread decays to $.34. Based on my portfolio size of just above $100k, I position size so I don't lose more than 1% of my account value if my trade blows up.
SOLD -5 VERTICAL APC 100 MAR 16 40/42.5 CALL @.68.
When you trade in the direction of a Bear Market and capitalize on high implied volatility, the profits tend to come faster. I prefer to define my risk because counter trend rallies tend to be unforgivingly sharp and intense.
After an earnings driven support break backed by a Very Bearish Power Gauge, we sold a $5 wide Bear Call Spread on NFLX on Jan 28th and rang the register at 50% max profit 6 days later. SOLD -3 VERTICAL NFLX 100 MAR 16 100/105 CALL @1.50; BOT +3 VERTICAL NFLX 100 MAR 16 100/105 CALL @.75
I have traded only 1 stock this year. The rest have been mostly credit spreads which have profited as the market goes down. We started with $100,000 on January 1, adding $1048 in gains (realized and unrealized) and paid over $112 in commissions (options are expensive to trade). So we stand at $100,935.68 for the year. Chaikin Analytics helps keep you out of bad markets. If we stick to the discipline of trading with price, money flow, power gauge, industry group strength and relative strength rules in place, we'll avoid the horrific bear market drawdowns that can wreak havoc on a portfolio.
When basic materials and energy spiked on Thursday, I took a bear call spread trade on EEM as it ran up into intermediate term resistance at around $31. SOLD -7 VERTICAL EEM 100 MAR 16 31.5/33.5 CALL @.55.
Breakeven on a call credit spread is the short strike, plus the credit received. So, we'll make a penny or more if EEM stays below $32.55 (short $31.5 strike + $.55 credit) between now and expiration. Chaikin Analytics data supports the trade: price below a downward trending long term Chaikin average, weak money flow and relative strength. The market rollover on Friday made the trade immediately profitable. We'll get out if the spread value decays to $.27.
Original trade taken January 11th on a Relative Strength Buy signal. SOLD -3 VERTICAL FSLR 100 FEB 16 62.5/60 PUT @.80 But given the bearish market conditions, I sized the trade at half my normal trade risk (.5% Max Loss) and opted for an option spread trade rather than stock. I was (and still am) in crash survival mode and wanted to precisely define my risk. The stock mostly went sideways and the spread decayed to the point where I could take 50% of my Max Gain. I got out of the trade on February 4th for small gain of $.41 per contract, $123 total profit. BOT +3 VERTICAL FSLR 100 FEB 16 62.5/60 PUT @.39
Relative Strength Breakdown signals are longer term Chaikin trading signals. Thanks to the strong performance of bonds and decreasing probability that the Fed will tighten shrinking the outlook for bank, the NASDAQ, gets double whammied as high flying tech companies in the index face fast multiple contraction. Weakening relative strength and Money Flow give me more confidence that The Q's are likely to under-perform and already downtrending stock market in the next weeks to months. So today we initiated a short option spread trade
SOLD -5 VERTICAL QQQ 100 MAR 16 100/103 CALL @.92. We make money as long as the Q's close lower than $101.92 between now and expiration. The trade has a 71% chance of making money and a return on risk of over 40%. That's better than the 29% theoretical risk of losing money. Probabilities, the directional edge of Chaikin Analytics and better payouts relative to risk during periods of high stock market volatility truly put the wind at our back.
Exit Plan: We'll take profits when and if the spread decays to $.46 or a week prior to expiration, whichever comes first.
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