Posted by Martin May 15, 2018
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Is the market going to fall or rise next?


When we broke the resistance level last week and rallied up to 2742 level on Monday, we basically reached my previous rally target.

 
Next S&P 500 trend
 

There fore I added a “buy” signal to my chart.

Of course, it is not a buy signal meaning I would be rushing to be buying everything and anything at that time but that expresses my bullish bias. I use it to eventually navigate my trades and it helps me to reverse the existing trades if the trend reverses.

 
Yesterday, I hoped for renewed rally although I knew we reached a Fib target and thus it would be unlikely.

Yet I believed…

And I added my “buy” signal to the chart. Today, I was proven that my original expectations were correct and my new enthusiastic beliefs were wrong.

I am expecting retracement now, so I reversed to “sell” (and I also reversed a few of my put trades into call spreads) to ride this thing down.

But it wasn’t as easy as I would thought. The market was a bit choppy during the day and I noticed that I had a bullish bias although I saw the market as being “bearish” for the time being.

Note that “bearish” doesn’t mean that I expect a bear market or any other catastrophe to happen. This is just a normal short term reversal, retracement, or a pullback after a week long rally. This market needs to take a rest before it continues higher, And I still see this market as bullish which is on its path to make yet another all time high. I do not know when it happens and how long it would last, but I expect it to happen.
 

And due to a lack of conviction on my side, I was reversing my trades a few times before I decided to leave it as is and trust my observations.

 
Next S&P 500 trend
 

Above you can see my “craziness” reversing my trades from put spreads into call spreads, back to put spreads and call spreads again.

 

So what’s next?

 

Well, to my disappointment, the market decided to hold the 2700 (actually 2707) level. It can be promising for the market. We held the level, we stayed above the previous resistance, now a new support… so, we should be good. We may go a bit lower to retest that upper trend of the original triangle we broke from but then we should resume the uptrend, or shouldn’t we?

It is thus promising to see the buyers stepping in and hold this market up. If we were poised for a selloff, we would already crash and followed violently down. It didn’t happen.

 
Next S&P 500 trend
 

My only concern is that we have returned into the sideways channel (see the dashed lines in the above chart). If that’s the case, this breakout will be a fake breakout. Then we will be returning back to 2585 level. And my trades are not prepared for that eventuality. Reversing them would cost some buying power I am becoming short of.




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Posted by Martin May 13, 2018
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Weekly results May 12, 2018


S&P 500  2,727.72 +4.65 (+0.17%)  Dow 30  24,831.17 +470.97 (+0.37%)  Nasdaq  7,402.88 -2.09 (-0.03%)
 

Market fearLast week was good. Our net-liq grew up again as the market went up. We did a few adjustments only of the existing trades. Last week we could close a few “long term” trades (trades which I was dragging along for some time), there fore last week was successful and I was happy about it.

The market was behaving well, we broke out of the triangle and rallied. This could be good for the market and we could rally further although as of Friday we were a bit overbought. On Monday, we may see a small retreat, which hopefully won’t turn into a new sell off. We are on the resistance level and it may not hold. Time will show.

 
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Posted by Martin May 09, 2018
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What’s next?


The market created a reversal hammer candle last Friday and retesting the 2600 support. Since then the markets rallied higher.

Today, we broke a triangle resistance and we also broke above the previous lower highs resistance which I deem as a very good sign for this market.

Now we still have a few resistances to break.

One is a resistance slightly below 2720 and a larger triangle at 2705. If both resistance get broken I expect a rapid move higher to 2800 level. This will be fueled by short squeeze as unbelievers will rush closing their losing positions and those who sold the market (sold low) will rush to chase the market (and buy high).

 
Next S&P 500 trend
 

This can take another month to develop in my opinion which would mark a third or fourth month of recovery (remember my older posts where I posted that in the last 20 years, it took the market 1 to 6 months (or 1 to 3 months in average) to recover a 10% correction and create a new all time highs. If this develops as expected, it would be 4 months of recovery.

However, I also expect that this market has about 2 years (well now only about a year and a half) of bull trend, then we may see a bear market rolling in. One reason is economic data as the world economy is showing signs of slowing down.

I think beginning or half of 2019 the market may look completely different. But who knows, my crystal ball is a bit foggy to predict the market…




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Posted by Martin May 08, 2018
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Can you trade options super-safe?


Recently, a fellow investor and trader asked me the following question:
 

Warren Buffett“I don’t want to trade any longer. It’s not that I don’t have time as I am retired and have all the time in the world. But just lately, I have been giving up everything that I am making, and sometimes more. I understand why this is happening and its all due to the volatility. I have a plan and that plan is based on Tasty trade style of trading but doesn’t seem to work right now and so I am fed up. I want to make 1.5% per month, or about 18% per annum. Is that too much to ask for? I think I can get by with 1% per month (12% per annum) as all it will mean is that I inject more capital in my account. With this modified requirement, I think I can get away by looking at the screen less frequently than I am doing now, what do you think? I am thinking of spending few hours a week, if that’s going to enough but it would have to be a strategy that does not require me to “trade”.”
 

Here is what I think can be a great strategy for this investor and everyone who wants to boost their income but not to trade:
 

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Posted by Martin May 05, 2018
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Weekly results May 04, 2018


S&P 500  2,663.42 +33.69 (+1.28%)  Dow 30  24,262.51 +332.36 (+1.39%)  Nasdaq  7,209.62 +121.47 (+1.71%)
 

Market fearI am trying to get back on track posting regularly our trading and investing results.

Why are we posting our results and financials when we are not a publicly traded company? Can it hurt our business and me personally? Does it make sense and can our readers be interested in these posts which some people consider boasting? And if it is a boasting, should we continue?

What do you think the stock market is going to do next? My outlook is mixed though. I can see bullish pressures but I also see bearishness in the market. Who will win this battle? Bulls or bears?

And at the end review our investing and trading results for the last week.

 
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Posted by Martin April 29, 2018
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April 2018 trading, investing, results


S&P 500  2,669.91 +2.97 (+0.11%)  Dow 30  24,311.19 -11.15 (-0.05%)  Nasdaq  7,119.80 +1.12 (+0.02%)
 

Market fearApril is over and it is once again a time to review our investing and trading through the month. It was a volatile month when our accounts were tosses around like a small boat in a stormy ocean.

But it was just a temporary storm like it usually is in the stock market. No sell off lasts forever and it will eventually recover one day. All it takes for a small retail investor is to have a plan and stick to it.

And I have such a plan and I strive sticking to it. Although our net-liq is still down, we had a great income this month.
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Posted by Martin April 21, 2018
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Weekly results April 20, 2018


S&P 500  2,670.14 -22.99 (-0.85%)  Dow 30  24,462.94 -201.95 (-0.82%)  Nasdaq  7,146.13 -91.93 (-1.27%)
 

Market fearMarkets were again struck by fear selling and media were coming up with tons of reasons why. At first, it was tech stocks such as AAPL driving the markets down, then semiconductors, later oil… all in one day. You could play the miney, miny… game to pick the reason. Granted, they do it all to entertain. However, the selling appeared to be purely technical, as I will present in this article, and quite predictable. Not that I predict the markets, I still have expectations but I do not trade to fulfill those predictions but use them to help me navigate the trade.

Overall, I am still bullish in this market, although my convictions is getting slimmer seeing how weak the bulls are. Look at it this way, media were all in excited expectations of earnings season pushing this market higher. So far, it is not happening.

 
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Posted by Martin April 16, 2018
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Syria not an issue anymore (hopefully), now let’s earnings move the market


S&P 500  2,677.84 +21.54 (+0.81%)  Dow 30  24,573.04 +212.90 (+0.87%)  Nasdaq  7,156.28 +49.63 (+0.70%)
 

Bright FutureInvestors and traders were afraid of what the stock market would do over the weekend due to an air strike in Syria. Myself included. I too was worried about the reaction on Monday. But there was no impact. The air strike ended on Saturday evening and as Trump said: “Mission accomplished” (we have heard this about Iraq once); the markets actually rallied. The S&P 500 futures opened more than 15 points up on Sunday and the market ended Monday trading 21 points up. Is there anything else coming on us we should be worried? I hope not. And if we are good now, no more Trump’s political escapades, no more wars, no other issues, then it will only be earnings season determining the next move. The banking earnings started lukewarm on Friday last week but today a few companies, reported good earnings. I hope this will continue and prop the market.

 
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Posted by Martin April 14, 2018
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Weekly results April 14, 2018


S&P 500  2,656.30 -7.69 (-0.29%)  Dow 30  24,360.14 -122.91 (-0.50%)  Nasdaq  7,106.65 -33.60 (-0.47%)
 

Bombing SyriaThe second week of April was better and provided a good recovery from the lows. We brought in a nice income offsetting previous week loss. Our net liquidation value is still down due to open trades consuming it, although it recovered somewhat this week.

However, Trump’s administration keeps disrupting the markets and eventually the entire US economy. China and Europe is slowing down, the US economy too shows a slow down and the earnings season seems to started as not expected – some say badly. What impact is this going to have to the markets next week?

 
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Posted by Martin April 11, 2018
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Stock market consolidating for the next move


S&P 500  2,642.19 -14.68 (-0.55%)  Dow 30  24,189.45 -218.55 (-0.90%)  Nasdaq  7,069.03 -25.27 (-0.36%)
 

Sell BuyThe stock market went down today on a fear of the US going into an air strike against Syria. Trump tweeted about nice, new, and smart missiles coming to Syria and Russians if they keep supporting Syria. Again, Trump opened his big mouth and the market reacted on his blabbing. Not facts, just his tweets. However, it was surprising to see that investors and traders didn’t over react on those “news” and the market remained relatively calm. The loss was only about 5 points. Then FOMC meeting notes were released and the market slid almost 15 points. Overall, it was still a quiet day.

 
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