MERRY CHRISTMAS

Luke 2:1-20

¹ In those days Caesar Augustus issued a decree that a census should be taken of the entire Roman world. ² (This was the first census that took place while Quirinius was governor of Syria.) ³ And everyone went to their own town to register.

⁴ So Joseph also went up from the town of Nazareth in Galilee to Judea, to Bethlehem the town of David, because he belonged to the house and line of David. ⁵ He went there to register with Mary, who was pledged to be married to him and was expecting a child. ⁶ While they were there, the time came for the baby to be born, ⁷ and she gave birth to her firstborn, a son. She wrapped him in cloths and placed him in a manger, because there was no guest room available for them.

⁸ And there were shepherds living out in the fields nearby, keeping watch over their flocks at night. ⁹ An angel of the Lord appeared to them, and the glory of the Lord shone around them, and they were terrified. ¹⁰ But the angel said to them, “Do not be afraid. I bring you good news that will cause great joy for all the people. ¹¹ Today in the town of David a Savior has been born to you; he is the Messiah, the Lord. ¹² This will be a sign to you: You will find a baby wrapped in cloths and lying in a manger.”

¹³ Suddenly a great company of the heavenly host appeared with the angel, praising God and saying,

¹⁴ “Glory to God in the highest heaven,
and on earth peace to those on whom his favor rests.”

¹⁵ When the angels had left them and gone into heaven, the shepherds said to one another, “Let’s go to Bethlehem and see this thing that has happened, which the Lord has told us about.”

¹⁶ So they hurried off and found Mary and Joseph, and the baby, who was lying in the manger. ¹⁷ When they had seen him, they spread the word concerning what had been told them about this child, ¹⁸ and all who heard it were amazed at what the shepherds said to them. ¹⁹ But Mary treasured up all these things and pondered them in her heart. ²⁰ The shepherds returned, glorifying and praising God for all the things they had heard and seen, which were just as they had been told.

John 3:16

For God so loved the world that he gave his one and only Son, that whoever believes in him shall not perish but have eternal life.

John 14:6

Jesus answered, “I am the way and the truth and the life. No one comes to the Father except through me.

Time to relax

I have on plenty of trades right now, maybe even a couple too many. In any event it's now time for me to chill out an enjoy the rest of the holiday season.

From here until about a week after the new year I'll take any profits the market wants to give me and I'll also monitor my trades, just no new trades here on out for awhile. The market slows this time of year and my injured fingers have been on fire with all these new entries.

Enjoy the holiday season!

New Trade - LEN

Proverbs 16:3 "Commit to the LORD whatever you do and your plans will succeed."

The market Triple Dogged Dare me to take this trade - so I'm taking it:

2 day's close above resistance - time to commit this to the LORD and relax and rake in the profit. Looking to the next level of resistance up as the target - $20.00 or so.

I bought the May 17 Calls for $2.73. Now just time to chill.

New Trade - HST

Proverbs 13:22 "...A good man leaves an inheritance for his children's children, but a sinner's wealth is stored up for the righteous..."

Don't be a Scrooge Mr. Market, give me a nice profit.

Here's a new entry - HST:

2 days close above resistance and I'm all aboard Long April 16 Calls for $2.35. The target is the next level of resistance above, gotta pull up a little longer chart to see it:

Target is $18.70ish. Got loads of time in our option to get there. Time to just sit and wait for the profit.

Thanks IP - Merry Christmas!

The market gave me another early Christmas present this year - 14% ROI in 3 days from IP - such nice market makers! This is a blessed Christmas indeed!

Here's the chart:

I could've stayed in for a bit longer to get more profit, BUT we are rapidly approaching Christmas and most likely stocks will just go sideways for a bit. So, instead of being greedy, I took my early gift and got out.

Sold my long Call Option originally bought for $3.85 and sold for $4.40, for a $0.55 profit, ROI% of 14% in 3 trading days.

Halleujah!!!

CBS - new trade

Abundant blessings for us!!

CBS chart:

Just your normal resistance break. 2 day's close above resistance. Also, this stock was upgraded the other day by multiple analysts.

Long March 17 Call $2.50.

Gotta go back a ways to find next level of resistance for target:

As Tiny Tim would say "God bless us every one"!

DNR - new trade

Christmas is coming and it's time to receive our blessings.

DNR's chart:

A simple bounce trade off a higher low (possible ascending triangle). Just looking to go up and hit resistance.

Long March 18 Call $2.00

Merry Christmas!!

MGM - early profits

Took profits early. Had 3 days higher for about a 12% move in stock price, so took profits and will look for possible entry.

Here's Chart:

Net: $0.37

ROI%: 14%

Days: 10 trading days

If we get another close above this resistance area, then I'll look for a re-entry.

Thank you LORD!

injured!

About cut my finger off yesterday with a saw, so entries will be short.

New Trade - IP

John 10:10 "...I have come that they may have life, and have it to the full."

I'm looking for a Christmas gift from the stock market this season and I found it in IP. Check out the chart:

This is simply an entry in an uptrend (i.e. higher highs and higher lows) in an individual stock (i.e. IP) while an uptrend in the overall market. I'm simply going with the flow - "a rising tide lifts all boats".

So, IP had a recent pullback and we had the buyers come in today and started driving price back up again. What also helped was that IP had an upgrade.

I bought the April 23 Call for $3.85. Why April? Because it's closest to 90 days at 119. Why 23? Because it's closest to the delta of .70 and had over 500 open interest.

My target is simply the last most recent highs and my stop is 2 levels of support below (i.e. last 2 times the buyers pushed price back up).

From here I just wait for the stock price to hit my target so I can get my Christmas gift - maybe Santa will come early this year and I won't have to wait long.

MERRY CHRISTMAS - REMEMBER JESUS IS THE REASON FOR THE SEASON! Don't forget to send the ACLU a "Merry Christmas" card this year.

MRVL - loss

We got a loss today in MRVL:

As you can see, I've had 2 consecutive closes in my stop zone (which was 2 levels of support below my entry). No big deal, a loss is simply a loss - it's to be expected.

I originally bought my Call Option for $2.24 and sold it today for $0.92, so I took a $1.32 loss or a 59% ROI loss.

So, what do I do now? Cry? Get ticked off and kick the dog? Re-vamp my entire trading process? Quit trading altogether? Visit a Shrink?

No, I do what all profitable professional traders do - I look for the next trade.

CMCSA - target hit, profits taken

Thank you Lord - another good trade. Check out today's chart on CMCSA:

Today the target was hit. Yes, it took awhile to get there after some going sideways and pulling back, but today was a nice pop up to guess where???? RESISTANCE. I.e. the next line in the sand above for the sellers. Looking closely at this chart you can see that the bulls actually had price above resistance, but those sellers weren't about to put up with that mularky and they pushed that price back down to almost my line exactly. (resistance and support are AREAS not EXACTS - but it does make me look somewhat good on this chart, huh?).

Something else to take away from this trade - you GOTTA HAVE ENOUGH TIME in your option in order for the price to get to where it's going. If I would've purchased a shorter time frame option, then I most likely would have had either a loss or not as good as a profit. WHEN YOU BUY AN OPTION BUY AS CLOSE TO 90 DAYS AS POSSIBLE!

Enough of the speech, let's get onto the numbers:

Bought the option for $1.63

Sold the option for $2.19

Net Profit = $0.56

ROI = 34% in approx 6 weeks

Not the strongest of trades, but it IS profitable. So now, I'm looking for another good trade to put on. When the right one comes, I'll be ready for it.

Thanks Chuck!!

New Trade - MGM

2 Corinthians 8:9 "For you know the grace of our Lord Jesus Christ, that though he was rich, yet for your sakes he became poor, so that you through his poverty might become rich."

We've got a new trade. Check out today's chart on MGM:

This is a triangle pattern break out trade. Notice how the price consolidated making lower highs and higher lows since early/mid October. Look at how the volume has been increasing as the price has been going higher. Look at the relative lows in the stochs since early November and look at how the MACDs (especially the two lines) have been going up as well.

If you look closely you can see the earnings (noted by a small telephone on the chart), which came out MUCH better than expected (big white candle), should be helping this stock go up as well.

The target is the next level of resistance above - approx $15.70ish or so.

I bought the March (100 days to expiration or so - which was the closest options to 90 days) 12 Calls for $2.63.

So, as you might know by know, one of the following will occur with this trade:

1. The stock will hit my target and I'll take profits

2. I'll take my profit before the stock hits my target due to weakness or time,

or

3. The stock will hit my stop.

Either way, it's all good.

DOW Update

Took early profits today in DOW, check out the chart:

Why did I take profits? It was still going in my intended direction, it didn't hit my stop, and I still had plenty of time left until expiration. So why?

I took early profits because even though I have a target, it doesn't mean that the price is going to make a bee line right up to it. Instead there will be some ebb and flow. Today I seen a bit of a gap and a small doji candle. This tells me that we're running out of steam, that the gap was a bit too big and the bulls are now weak at these prices. In addition to that gap and doji I've noticed the volume has been dropping as we've been going up. The bulls are loosing their gusto.

So, I took profits and will keep DOW on my watchlist for a possible re-entry.

There are 2 other things to keep in mind when trading:

1. "A bird in the hand is better than two in the bush." (i.e. take profits when you can), and

2. There are many other great set ups either ready to trade or coming up which will give me a better edge than this current position. (i.e. you want to always get the greatest bang out of your trading dollars).

I sold this option for $4.00, after buying it for $3.25 approx a month ago. That gave me a net of $0.75 ($75 per share) for the trade. Again, doesn't sound like much, however the ROI was 23% in one month. If you annualized that out it would be 276% per year gain.

From here, it goes back on the watchlist for a possible re-entry - however if there are better set-ups, then that's where the trading dollars will go.

New Trade Time - MRVL

Okay, okay, okay Mr. Stock Market, I'll take the money on this trade.

Check out the chart on MRVL:

As you can see, this stock was in a consolidation (or symmetrical) triangle. It broke out of the triangle yesterday on rising volume. The volume increased today with higher prices. Also, it broke a prior level of resistance for 2 consecutive days.

In addition to all that sweetness, the stochs are going higher, the MACD histogram is getting more bullish, and the MACD lines look like they're ready for a cross up.

MRVL is in the technology sector, which is currently stronger than the SPX.

So, what I'm trying to say is that this looks like a good solid trade with a nice edge.

I bought a February 19 Call Option for $2.24. My target is approx $21.70, which lines up nicely on 2 different fronts (see the chart below):

1. It's the next level of resistance above, and

2. The measurement of the triangle pattern predicts this movement to get to this level.

So, there you have it, time to take the nice gift of money from Mr. Market - maybe he'll get it to us in time for Christmas. He better not be a Scrooge!

Glory to God!!!

CMCSA - update

This stock decided to get into full on pullback mode after I entered the trade - CONSPIRACY I DECLARE!!

Just kidding. I noticed a couple of days ago that it pulled back in a classic channel, when you get a channel (either on a trade that you are currently in, or looking for a new trade) you always look for a break out of that trade in the original direction of the stock before it started the channel.

In our case, CMCSA pulled back into a channel and today it had a nice substantial break of that channel along with volume that has been increasing over the past few days. I.e. - odds are we go up from here, and possibly quickly.

We're just sitting tight for now - just relaxing and letting this thing either make us profit or give us a loss.

XLU & DOW

Nothing major to report. The targets have not been hit and the stops have not been hit. XLU has had quite the pullback and even had a one day close in the stop zone - however it did not get 2 CONSECUTIVE days in the stop zone.

So, it's all part of trading, either we'll get a profit or a loss - nothing scary or dangerous, it's just trading folks.

PCX - took early profits

Here's the chart:

I took profits early on this trade. I got out around 16.81ish and was looking for about 70 more cents of a move.

However, there's a few reasons why I got out today:

1. It popped up above it's recent little resistance area with a small candle - to me it just feels like it's backside is sitting out in the open ready to get hit hard by the sellers tomorrow or the next day. If so, it will probably have a much larger pullback - and time is a tickin'.

2. The market has been pulling back/sideways lately and even though it had a nice pop up today, I can't help thinking that it may now go sideways until the end of the year. Hand in hand with this, I feel that there are most likely better setups giving me a better percentage return at this point in which to best utilize my trading moolah.

3. A bird in the hand...

I sold my long January 14 Call Option that I originally purchase for $2.15 for $3.25. A profit of $1.10 and more importantly an ROI of 51% in approx 4 weeks.

Not too shabby. Now I will use this trading capital and look for a pretty setup.

Thank you LORD!

New Trade - DOW

"The blessing of the LORD brings wealth, and he adds no trouble to it."

Proverbs 10:22

I've gotten into another blessed trade, and there'll be no trouble getting profits from it.

Here's the chart for DOW:

Ideally, I should have gotten in on Friday instead of Monday - however, since I don't live in an ideal world I had issues - namely internet connection issues. This brings up a very relevant topic. Once you are trading LARGE AMOUNTS OF CAPITAL, then it would be most necessary to have at least one, if not two, wireless air cards for your computer. I would lean towards having two different air cards from two different wireless providers IN ADDITION to your normal internet connection.

This may sound insane, but I have had MULTIPLE instances where I was either in a trade that I desperately wanted out of, or wanted to get into a trade and could not because my wireless connection was going bezerk.

I personally know of a few traders that have multiple wireless services so they never get into a bad situation. The feeling of complete helplessness is not a happy experience and once you are trading large amounts of capital you could be at risk to lose major money if you can't trade properly due to something as stupid as internet connectivity.

Okay, back on the topic of this trade. So, I got in because we had 2 (actually 3) closes above the last significant high. This tells me that where the sellers USED to be (i.e. the last significant high) that they are no longer a force at that price because the buyers were able to have 2 consecutive closes above that price. Yes, the sellers are still around, however the majority are probably backing up and going to possibly defend the next "line in the sand" (i.e. resistance). We've gotta pull up a 3 year chart to find this next line of resistance. Here's the chart:

The next level of resistance is approx $36. So, I'm going to look to take profit just shy of that - around 35.75ish.

I bought a January Call Option for $3.25. My target is around $35.75, my stop is 2 levels below, around $28.80.

Since NOBODY but GOD knows what's going to happen, then we just wait and see what happens. Remember, we have the edge of probabilities in our favor, and more importantly, we've got GOD!

My Trading Style and Philosophy

If you've either followed this blog since day 1 (you poor soul) or if you've just scanned through the trades here and there, I'm certain you noticed that overall my trading style seems to be schizophrenic at best.

You are completely correct, however it's been that way since I first started trading. I learned many different styles of trading and it's taken a VERY LONG time to determine my overall trading style and philosophy.

But, I've come into some MAJOR REVELATIONS over the past six months or so. First of all, I believe that the high/low system that I trade is a gift from GOD. If you don't believe in GOD, then I'm sorry - but you're wrong, as there most definitely is a GOD and he wants us to be blessed.

Secondly, I needed something to go with my high/low system that would work "in between" my high/low entries. This second style of trading can be called "flags" or "pullback" trading.

So, I got my trading systems finally in order. At some point in this blog I will expand on each system. However, if you pay close attention, you should be able to understand most of each system before I explain them.

But what I really want to harp on right now is the BIGGEST SECRET TO TRADING SUCCESS OR FAILURE: YOUR MENTAL STATE!!

What's your mental state for the pictures below? I.e. - what do you see??

I just got done reading an e-book titled "Trading In The Zone" by Mark Douglas. I WISH I READ THIS BOOK BEFORE I EVEN STARTED LEARNING ABOUT TRADING.

By and large, this is the absolute best book I have read about trading. It does NOT teach you how to trade - there are plenty of places elsewhere to go for that. What it DOES DO is teach you how to get your mind right, just like this guy was trying to do in the movie:

Anyway, here's the bottom line of the book - you WILL NEVER know what direction the market, and your trade, is going to go. Only GOD Himself knows that. You may THINK you know, but you don't.

Since you don't know for ABSOLUTE CERTAIN which way the market, and your trade, is going to go, then the best thing you can do is trade with an edge. "An edge" is your specific trading system (like the one I'll explain here at some later point in time). Once you have an edge, then you know that over time, your edge will give you profit. You MAY NOT PROFIT on every single trade. You SHOULD EXPECT losses. However, over time and with lots of trading, your edge will continue to steadily put profit into your trading account and that account should be growing CONSISTENTLY.

So, when you trade, just remember these things:

1. You don't know where the price is going to go

2. You may profit or you may lose money on any trade

3. In the long run, with many trades, you'll have net profit

4. Don't worry about "being right"

5. Take every trade you can that meets your system's rules

6. Don't get emotional, either way, on the outcome of any trade

This may sound a bit odd, but experienced traders reading this know what I'm talking about. As humans, we want to "be right". However, as we try to "be right" we get hurt emotionally and financially when things don't go our way and this leaves mental trading scars which hinders us in the long run. We have to quit trying to be right and instead focus on following our system (that has an edge) and look to consistently making profit in the long run.

Think about any casino. Sometimes their edge is really small. For example, sometimes you can find slot machines that payout 97% of what they bring in. This means that the casino's edge is only 3%. However, think about the volume of money that goes through one of these machines. It must be THOUSANDS of dollars a day if not more - and that's just ONE machine. No wonder Las Vegas can offer such cheap hotels, food, entertainment and comp you when you are playing - they are making their money in the long run. They want people to stay at those machines because in the long run they win with their edge.

Put in the opposite view - if you ran $100 through that same machine, then statistically, you'll come out with $97. Not bad, but you still lost $3. Yes, some people hit jackpots on their first pull of the slot machine, but you don't know how many people before and after will go away losing massive money to those same 97% machines. It's all about the long term.

And that's the way you need to think as a trader - long term trading with an edge.

BBY - target hit, profits taken

BBY hit it's target today:

Since it hit the target, I took profits. I originally bought the January 39 Call Option for $4.69 and sold it today for $6.30.

This gave me a profit of $162, and more importantly, an ROI of 34%, in 16 trading days.

Just the type of trades I'm looking for. Nice and steady.

New Trade - PCX

After taking profit on BBY today, I looked for a new trade and found one - PCX:

As you can see, the prices were in a downtrend, then reversed and now are in an uptrend. Yesterday, the stock broke it's resistance. One of my rules is a 2 day's close above resistance to get into a bullish trade - I got that today and therefore took my entry.

I bought a January 14 Call for $2.15 and am looking for price to get up to it's target - the next level of resistance overhead around $17.50 or so.

I always put my mental stops (NEVER physical stops) 2 support levels below the current price. My definition of "support levels" basically means - where the bulls came in the last 2 times to drive up price. Sometimes it's tough to decipher, however in this example it's fairly obvious.

So, from this point, I've got my target and I've got my stop. There are a few other things that would get me out such as:

1. A significant pop up in the stock within a very short time period, thus resulting in decent ROI obtained quickly.

2. Prolonged stagnation (sideways movement) over a period of weeks. If this were to happen and I got within a month of expiration, then I'd close the trade at some point before hitting the target or stop.

3. If I have profit and the markets start to either physically start into a downtrend, OR there's a major stoch or MACD divergence on all 4 major markets.

Of course, I don't know what's going to happen, but I've got the edge on my side for a profit - so that's where my money is.

New Trade - CMCSA

Until I took profits in SMH today, I had the max amount of trades on for my account according to my rules. After taking profits in SMH, I quickly looked for my next trade and went with CMCSA - you gotta take the trades as soon as you can, it's the way to keep active and build your account. Here's the chart:

I actually had a valid trigger for an entry on the 2nd close above the old resistance/new support, about 4 days ago - however at that time, I was maxed out on my trades. If I could have gotten in on that day, I would have been profitable today and on my way to greater profits.

However, I liked today's entry because it's a combo of both my styles of trading. It's a combo of 2 day's close above resistance (or a recent significant high - for bullish), and it's a close above the high of the low day (i.e. sort of like a bull flag or simply a pullback).

My target is only about $1 away, but that should be enough room to give me a decent ROI. I have to go out to a 3 year chart to find the next level of resistance above this current price action. Here's the chart and the target:

I went long a January 20 Call, which cost me $1.63. I put my mental stop (I don't use physical stops) on in yellow. So now, with plenty of time, we let the price go where ever it may. And, I just sit back in patience and peacefulness.

SMH - target hit, profits taken

SMH wasted little time in hitting the target - thank you LORD. Took profits today.

In 6 trading days this trade made $94.00 for a 42% ROI. Like I've stated before, I don't concentrate on dollar amounts. I concentrate primarily on target areas and I gauge my trading my %ROI.

I'm satisfied with this trade. I'll keep SMH on my watchlist to look for the next entry.

New Trade - XLU

Here's a new trade - XLU:

Just looking for a bounce off support up to recent highs. Easy enough.

Bought a January 30 Call for $2.03.

I'll take profit once we get to those recent highs, or will take a loss once the trend changes. Either way, I'm in like....

New Trade - SMH

One of my favorites to trade - SMH. I like SMH because it "acts right" and is highly liquid.

Overall XLK (technology sector spyder) is the leader in the market sectors. Couple that with the QQQQ's leading the markets higher, points to SMH (semi-conductors) going higher. Also remember, even though Halloween is just a few days away, that Christmas is ramping up. I'm sure you've noticed a few Christmas items here and there already (or even as early as September) - so this means that computer manufacturer's are ramping up production for the Christmas season and they need those semi-conductors!

Enough of that, let's just look at the chart:

First of all you can see where I recently profited from this trade. I always watch SMH and will trade it again and again. This trade will be different from the last as we broke a resistance level for 2 consecutive days - with increasing volume to boot.

So, my target is the next level of resistance up, which is seen on this chart around the $30.60 level or so. And, I'll look for the target just shy of that before any major sellers step in.

I bought the January 28 Call Option for $2.21. I'll watch this closely and might take profits early if we get a nice big pop (then will look for a re-entry). Or if we get any funny business, then I'll also take profit early.

Time to make the donuts.

LDK - took quick profits.

Took a quick profit today in LDK. This was a nice and quick 3 day move.

I got out today for a couple of reasons:

1. My ROI today was 24% - in just 3 days

2. We have a doji - after a little gap up, so some gusto was used up

I think it will continue up to the target, however I don't know how long it will take to get up there. I'd rather take quick and easy profits in this market rather than just leaving it on to get a few extra dollars.

I made $58 in 3 days resulting in a 24% ROI. Not too shabby. I'll take that every day if I can.

LDK - new trade

Time to punish those market makers again with a new trade.

This time it's a long call on LDK. Here's the chart:

A couple of weeks ago LDK broke above a level of resistance. It then went on to some nice recent highs before it pulled back, retested the old resistance/new support and now it's ready to bounce back up to those recent new highs.

It's a cheap stock and the move will only be about $1.50 or so, however that roughly a 12% move for the stock. So, it's a good move, and it should happen fairly quickly.

I've tweaked my long options just a bit by making sure I'm close to 90 days (or more) until expiration. This market isn't moving really well and I need plenty of time to hit targets. Even though this trade should only be a week or so, you just never know, better more time than less.

So, I bought the January 10 Call Option for $2.35. I'm looking to hit the recent highs, and if it goes against me, then I'm looking for it to break 2 levels of support: the first is the purple line on the chart, the second is just below that where the bulls were keeping the stock price from going lower before the breakout.

Another good thing for LDK is news - because we ALREADY KNOW what the news is: solar stocks overall are heating up and getting good reviews. LDK is a solar stock so this positive news should help us as well.

For now, we remove all emotion, we follow our trading plan above and I'm looking to hit our target in plenty of time before the option