GLD call update

After entering into a long call position yesterday on GLD, the stock opened lower but then reversed midmorning today. Our call option has now broken the 10% profit mark. I think there's more upside to this since gold has been a safety play the last few months and the rest of the market has taken a crap on itself today. There's some heavy resistance though around the $123 range though. You can see a few attempts to break and hold that but all failed. So I'm looking for a break and close above the $123 level. If it hits resistance and starts to reverse, then we will close our position and with a small profit. The target range is the green circle.

BP stock still falling? Hmmmm, wonder why....

BP's stock started forming a descending triangle on JUN 3. At point 1, BP found support at $29 even and then continued its tightening. At point 2, we got a close below the low of the triangle support. This gave us a clue as to where the next move was. As in most descnding triangles, the move is downard but you have to wait for confirmation. I initiated a position at the end of JUN 24 when I saw the close would be below $29. That put is now up 42% in 2 days. BP opened higher today but the bears pushed it back down. I still think there is more downside on this. Not too hard to come to that conclsusion becasue: IT'S STILL LEAKING LOSERS!!!!!!!

Bearish Trade Setup on Wells Fargo (WFC)

FYI: You can click on the chart to open a larger version.
Bearish Trade Setup for WFC: Wells Fargo
1. ADX is above 30 indicating a strong trend is in place.
2. WLR setup bar was on 6-21 closing below -80. It confirmed bearish the next day on 6-22 with a close below the previous day's low. This is highlighted with green circles.
Additionally, WFC is trading below the 20 (red line), 50 (blue line), and 200 (green line) daily moving averages. So the plan here is to wait a day or so for the stock to rise back up to the red 20 dma line and then purchase an August put. Currently looking at the 29 strike price in the $2 and change range. Later.
Trader Dad!

Bear setup on Lowes. LOW

Here's a bear setup I'm stalking on Lowe's. Home Depot is also in a downtrend but I like this setup better for a couple resaons. For one, LOW is already trading below the 200 dma, the green line. It confirmed bearish at point #1 and retested already at point #2 on the %R indicator. The ADX has broken above 30 which signals a strong trend is in place. So now I'm waiting for a retest on %R which would be a close above the -80 line or a retest of the 200 dma. I'm looking at a single put play on this with an August expiration.
Later.
Trader Dad!

Is it too late to trade BP?

Well since the oil well is still gushing until at least August, I think there's more downside to BP. On the BP daily chart above, you can see where the explosion was on April 20th and how it played out. So you can see the first green circles of the %R setup bar and then it confirmaing a few days later. During this time, the ADX was already above 30 and rising steadily. So now I'm ready to trade. The next retest at #2 green circle was a good day to by a put. Look at the huge drop the next 2 days. This was a 100% or so profit in 2 days. So we wait until #3 green circle and bot another put. Boom, big profit. So guess what I'm doing now. You got it. Waiting for the next retest day and will try to buy a put at the end of the day if it looks as if it will close above the -80 on %R. Until then, we wait. Whenever this retest occurs, you should close out of the trade if you get a close above the high of the retest day.
Later.
Trader Dad!

UNG Confirmation to the Upside

Yesterday, I posted a video about how UNG is breaking out to the upside. Deron Wagner has also confirmed this. He has his own trading service using mostly ETFs and I really like his thorough commentary. Check out his take on UNG and his commentary.
Trader Dad!
http://www.morpheustrading.com/short/z100615.html

DO WHAT YOU SAY!

A bit of advice, when you write up a trading plan including watchlists, entry and exit points, follow the plan. It sounds so simple but I myslef broke from that recently and got my face ripped off because I tried to get fancy and jump the gun on a couple trades. So follow your plan and stop watching CNBC!!!!! Ugh....
Trader Dad!

UNG Upside Breakout Video

The Bid/Ask Spread with Options

When people trade stocks and ETFs, the bid/ask spread is usually pretty tight. If its a heavily traded one, it can be as low as 1 cent. This spread is what you the buyer pays to get in and out of a trade to the market maker. This is in addition to the fee your broker charges. When trading options the bid/ask spread can get really wide on light volume optionable stocks. This means you will pay more to buy and then sell an option later and this can seriously eat into profits.

For example: right now the bid/ask spread on the QQQQ is 1 to 2 cents. To buy a call is .99 and to sell it is .98. So in this example the bid/ask spread is about 1% of your trade excluding commissions. Not bad huh?

Next Example: Toyota (TM), right now the bid/ask spread on TM is about 9 cents. To buy a call is .91 and to sell it is .83. So in this case the bid/ask spread is about 10% of the trade.

You really need to pay attention to the bid/ask spread and the option price to make sure you you're not killing your profit with this tax. In the Think Or Swim platform, which I use and love, there is a public Penny Increment Stock list which only includes about 250 stocks and ETFS. (Only!?, that's still alot) I've actually gone through each one and narrowed it down to just over 100 taking into consideration volume and open interest. I will post this list in a future post but I wanted to plant this seed on how to save you some serious bling when look for stocks with options.
Later.

Just Getting Started

For those people with 'Real Jobs', it can be hard to find time to do stock research and to even execute trades with accurate entry and exit points. If you want to pay some clown $$$ per month to make pics for you that's fine but you will soon learn that if you don't execute those trades when you get the text or email, you will probably miss most if not all of the profits. Being that this is the first post on this blog, if you stay tuned, I'm going to help you, the average Joe trade profitably by showing you how to do research at night and/or just on the weekend. I'm going to include watchlists, technical analysis, and option concepts to help all the other working dads out there to make some money. So stay tuned and let me know what you think as we progress and send in questions if you want a certain topic covered.
Thanks.