Watch for volatility as news hit!

Small caps moving up alongside large
caps. More movement to the market today.
Be prepared for anything, as news may
bring volatility. Looking for bullish
movement indicators. Get the latest at
TradingTrainer.com.

Hey trading team,

This is A.J. on Thursday, September 29th with
your Trading Trainer web log. We are your
home of market insights for the serious options
trader. This web log will cover the events in the
market from today as well as prepare you for
watching the market tomorrow.

Well team, despite all the oil woes, today the
markets flexed their muscles. We saw some
nice performance from our small caps
especially. The small caps were the ones that
were lagging in the first half of the week behind
the large caps that were slowly building back up
– the bull coming up the stairs if you will. So,
although the newspaper article writers and even
some analysts are surprised by today’s action,
are we, team? I hope not. We have been
watching the technicals all week and I’ve been
saying, when we see price gap up an average of
1% among the indexes on heavier volume, we’ll
know that the market is ready to make another
bullish run of things. In fact, with the DOW and
the S&P 500 stretching up above their levels of
resistance, the DOW moving up above its 200
day average once again and the NASDAQ and
the S&P 500 moving up above there 50 day
averages once again… we seem to have passed
many of the short term tests I had put out there.
I have immediately bumped the bias up to
neutral today. Now we’re looking for some
more conviction like Chaikin and MACD
crossing and long trends. Keep your eyes peeled
team. Be ready for anything.

Team, we know we are in the fall season... we
have a healthy chunk of news being released
tomorrow morning to end the week on.

The bid price of my Autodesk November 45
Calls closed up at $2.50 per option. My return
on invested capital is 32% after 2 days. The bid
price of my Joy Global November 50 Calls
closed up at $2.10 per option. My return on
invested capital is 5% after 2 days.

Team; today we saw some respectable gains on
heavy volume. The question is, with all the
domestic disarray happening, can the market
follow through on today’s gains. And with the
news being released tomorrow morning, there’s
bound to be some volatility. Besides setting
some exit rules on my own positions, I think for
me, tomorrow will be a day to sit back, watch and
enjoy the show.

Okay, team. I'm done.

Till tomorrow, happy market watching, trading
and money making. Trading Trainer is here
helping you create your dream lifestyle.

Best regards always,
A.J.

Click on the below play button to hear
the blog as an audio from A.J. himself!



About the Author
A.J. Brown is a full time options trader, author,
speaker and consultant. Watch him review stock
charts on video each day, listen to his audio
newsletter where he leads you by the hand
through the end-to-end process of successful
options traders and get tips and tested strategies
proven to boost your return on your invested
capital by massive amounts in his membership
site at TradingTrainer.com today.

* You may reprint or distribute this article as
long as you leave the content, the links and the
resource box at the end intact.

Gold Prices Soaring!

Gold Prices reaching $500, showing its
value, but worrying some. Flat market
makes profits harder. Look for upcoming
movement on flat market. Also what I’m
involved in. Get the latest at
TradingTrainer.com.

Hey trading team,

This is A.J. on Wednesday, September 28th with
your Trading Trainer web log. We are your
home of market insights for the serious options
trader. This web log will cover the events in the
market from today as well as prepare you for
watching the market tomorrow.

Team, price is slowly creeping up in the broad
market. At least on the larger cap stocks. Oil
prices continue to appreciate taking with them
energy related stocks. Team, you have to see
that Gold is pushing the 500 dollar mark. Gold
is an indicator of people’s confidence. If people
aren’t confident, they buy gold… because if all
heck were to break loose, and all the currencies
out there today that are only backed by good
faith… like the U.S. dollar, and pretty much all
the rest… if they all became worthless, gold
would still be worth something because since it
is a precious metal, it inherently has value, it’s
scarce. So, we watch the price of gold. Right
now it’s going up and up and up and that has
some worried. For us team, would we worry if
the broad market started declining? No,
because we know how to use our options to
trade short positions. In fact, the most trying
time for us team is times like right now, where
the market’s indecision keeps the broad market
with a neutral stance and therefore doesn’t give
us any extra push on our stocks to really
supercharge our gains.

The bid price of my Autodesk November 45
Calls closed up at $2.00 per option. My return
on invested capital is 5% after 1 day. The bid
price of my Joy Global November 50 Calls
closed down at $1.60 per option. My initial
investment is down 20% after 1 day.

Team; although we keep getting flat price
movement, it is on heavier volume. It reminds
me of a drag strip. Imagine when the drivers are
lined up ready to race down a quarter mile track.
What do they do while waiting for the start
signal? They rev their engines real high and spin
their rear wheels while having their brakes on.
They go no where… but as soon as the signal is
given, they rocket down the track. Right now,
with all the volume and no price movement, the
energy is building for a breakout. The million
dollar question on all our minds is in which
direction will it go. When the broad market
moves it will affect the underlying stocks. So…
we need to be prepared. Use stop loss orders on
open trades to protect investments and profits,
and when you see a confirmed signal, act on it.
Pre think your moves so you can act fast.

Okay, team. I'm done.

Till tomorrow, happy market watching, trading
and money making. Trading Trainer is here
helping you create your dream lifestyle.

Best regards always,
A.J.

Click on the below play button to hear
the blog as an audio from A.J. himself!



About the Author
A.J. Brown is a full time options trader, author,
speaker and consultant. Watch him review stock
charts on video each day, listen to his audio
newsletter where he leads you by the hand
through the end-to-end process of successful
options traders and get tips and tested strategies
proven to boost your return on your invested
capital by massive amounts in his membership
site at TradingTrainer.com today.

* You may reprint or distribute this article as
long as you leave the content, the links and the
resource box at the end intact.

Tread Lightly In Neutral Market

Equal pressure is shown in broad market.
Watch for bull market to keep going
despite movement. Lower profit targets
help in time of indecision. Also what I’m i
nvolved in. Get the latest at
TradingTrainer.com.

Hey trading team,

This is A.J. on Teusday, September 27th with
your Trading Trainer web log. We are your
home of market insights for the serious options
trader. This web log will cover the events in the
market from today as well as prepare you for
watching the market tomorrow.

An interesting phenomenon happened with the
broad market today. There was equal pressure
from the bulls and the bears. Volume and price
for the most part, across the indexes was flat.
So what does that mean? Well it means the
market just doesn’t know. And neither do us
so we need to tread lightly till a direction
becomes more evident.

I opened two long positions today by buying
calls. I bought the Autodesk November 45
Calls at 1.90 per option. The bid price closed at
1.80 eating into my initial investment by 5%. I
also bought the Joy Global November 50 Calls
at $2.00 per option. The bid price closed at
$1.80 eating into my initial investment by 10%.

Team; today with the flat movement of price,
you would almost think the market petered out
on its current bullish rally. But, team, a
petering out is accompanied by a reduction in
volume. Volume has not diminished. Today
was instead a day of indecision. To cap this
bullish rally off in the short term, what we are
looking to see before the week is out is a day
where price increases by 1% or more on heavy
volume. If we see that, we will be confident in
the rally’s staying power. In the mean time
team, I’ll be looking at stocks the way I did
today... to find those that can stand on their two
feet.

Don’t be afraid to at least paper trade a stock
that looks good despite the broad market’s
indecision. Just be aware that an underlying
push by the broad market is missing and
therefore you need to lower your profit targets
to a more realistic level like 25 to 50%.

Okay, team. I'm done.

Till tomorrow, happy market watching, trading
and money making. Trading Trainer is here
helping you create your dream lifestyle.

Best regards always,
A.J.

Click on the below play button to hear
the blog as an audio from A.J. himself!


About the Author
A.J. Brown is a full time options trader, author,
speaker and consultant. Watch him review stock
charts on video each day, listen to his audio
newsletter where he leads you by the hand
through the end-to-end process of successful
options traders and get tips and tested strategies
proven to boost your return on your invested
capital by massive amounts in his membership
site at TradingTrainer.com today.

* You may reprint or distribute this article as
long as you leave the content, the links and the
resource box at the end intact.

Keep Watching Indicators!

Oil market gets slight boost early, but
diminishes. Neutral bearish market
turning upward slightly. Give it a go on
paper trading today. Watch the volume
and Oscillators. Get the latest at
TradingTrainer.com.

Hey trading team,

This is A.J. on Monday, September 26th with
your Trading Trainer web log. We are your
home of market insights for the serious options
trader. This web log will cover the events in the
market from today as well as prepare you for
watching the market tomorrow.

The fact that Rita was well prepared for, lost a
lot of energy before hitting land, and spared a
lot of the oil rigs and refiners sparked an early
morning rally. But then, the long term effects
of oil being tight set in and the rally was
quenched. The small caps led the way today.
The small-cap S&P 600 as well as the Russell
2000 made some very nice gains. Looking from
a technicals perspective the broad market looks
to have hit a bottom last Thursday and since
then has been on a pseudo rally. Some things to
look out for in the short term to confirm the
rally might be a price movement of over 1% on
volume that is heavier than the 200 day average,
price being above the 200 day average and the
Chaikin Oscillator crossing up above its zero.
For the long term, we’re looking for the 7 day
moving averages to cross up above the 30 day
moving averages, that MACD to cross up above
its MACD average, and for the 30 and 40 day
averages to trend up for 20 day straight. Right
now we’ll be keeping our trading bias at neutral
bearish.

Team, like I said in the opening comments, there
are some short term indication I am looking for
with respect to the broad market trend. Till I see
those indications, and I am seeing evidence from
the individual stocks that, till they see those
indications, you can’t put any confidence into
any movement. Remember, volume guides our
movements. If we don’t see heavy volume,
staying on the side lines is a healthy alternative
to loosing money. If you want to try a
speculative trade, by all means, give it a go… in
your paper trading.

Okay, team. I'm done.

Till tomorrow, happy market watching, trading
and money making. Trading Trainer is here
helping you create your dream lifestyle.

Best regards always,
A.J.

Click on the below play button to hear
the blog as an audio from A.J. himself!


About the Author
A.J. Brown is a full time options trader, author,
speaker and consultant. Watch him review stock
charts on video each day, listen to his audio
newsletter where he leads you by the hand
through the end-to-end process of successful
options traders and get tips and tested strategies
proven to boost your return on your invested
capital by massive amounts in his membership
site at TradingTrainer.com today.

* You may reprint or distribute this article as
long as you leave the content, the links and the
resource box at the end intact.

Watch out for Rita!

Oil prices show initial decline, but closed
up. Launching new members only
newsletter. Watch out for now as Rita hits.
Watch the volume and Oscillators.
Get the latest at tradingtrainer.com.

Hey trading team,

This is A.J. on Sunday, September 25th with
your Trading Trainer web log. We are your
home of market insights for the serious option
trader. This web log will cover the events in the
market from this past Friday as well as prepare
you for watching the market tomorrow.

Again, the calmer Rita caused oil prices to
decline, and the initial opening plunge in the
market was reversed to close up. What we’ll
really need to see is how the market reacts to the
damage post Rita come tomorrow. Monday
morning will be all telling. Depending on the
outcome, things will be wild one way or
another. So, if you are in any trades, buckle up,
you’re in for a ride. If you aren’t, it might be
safest to watch from the sidelines.

More exciting I think is the new members-only
newsletter we’re launching today. First, we,
here at TradingTrainer.com are just about to tie
the knot with both the Investors Business Daily
newspaper and the Dow Jones Market Watch
Online service to have their news feeds, exactly
when they are released, plugged directly into our
newsletter. Now if those aren’t the best sources
of news highlights, I don’t know what is.
Second, the Trading Index Stats section has been
redesigned. We are watching six indexes now,
not just three. In addition to the Dow, the
Nasdaq and the large-cap S&P 500, we’ll be
watching the mid-cap S&P 400, the small-cap
S&P 600 and the Russell 2000. And, for each
index we now have a graphic dashboard that
will quickly tell you how the index is doing for
the day and the week. Finally, in the trading
index stats section, we have moved away from
static charts and audio. There is a single button
now that says, “View the indexes analysis right
now…” When you click that button you will be
brought to a flash video where instead of having
you look at a static chart while I talk, you can
look over my shoulder on to my computer and
see how I analyze the indexes. Third, the Charts
of Interest section is now using that flash video
technology as well. There is a button for each
ticker. Today, I only did an analysis on
Pacificare Health Systems, ticker PHS. That
means there is only one flash video today. On
many days there will be more. Anyway, what all
these changes mean is…well, that this base
audio commentary will be significantly shorter
and you will have a more interactive experience
when it comes to charting. Team, thanks to you,
we here at TradingTrainer.com have been able
to take it up a notch. We’re delighted to be here
because of you and we won’t ever stop getting
better.

Tomorrow is going to be a lot of watching and
reacting to the damage of Hurricane Rita. The
broad market is teetering between biases right
now, and it’s not safe for me to open an
positions at this time for should the broad
market reverse, I’ll be caught with my pants
down. I’ll be sitting back and watch tomorrow.

Okay, team. I'm done.

Till tomorrow, happy market watching, trading
and money making. Trading Trainer is here
helping you create your dream lifestyle.

Best regards always,
A.J.

Click on the below play button to hear
the blog as an audio from A.J. himself!


About the Author
A.J. Brown is a full time options trader, author,
speaker and consultant. Watch him review stock
charts on video each day, listen to his audio
newsletter where he leads you by the hand
through the end-to-end process of successful
options traders and get tips and tested strategies
proven to boost your return on your invested
capital by massive amounts in his membership
site at TradingTrainer.com today.

* You may reprint or distribute this article as
long as you leave the content, the links and the
resource box at the end intact.

Slight boost as Rita Calms!

Rita’s calming sends gas prices lower. Small rally
on low volume today. Trends or reactions to
oversold positions? Watch the volume and
oscillators. Get the latest at TradingTrainer.com.

Hey trading team,

This is A.J. on Thursday, September 22nd with
your Trading Trainer web log. We are your
home of market insights for the serious option
trader. This web log will cover the events in the
market from today as well as prepare you for
watching the market tomorrow.

So Rita calmed a notch down which sent oil
prices down off their daily highs, and in turn the
market rallied somewhat although on lighter
volume. In fact, everything flip flopped. Oil
and mineral stocks dropped. Builder and retail
stocks gained. So, what did we see here?
We’ll, the Dow and the NASDAQ hit horizontal
support and rebounded off. As well, the Dow
formed a key reversal up price pattern. The
question in my mind is, we were at such
extreme oversold positions… is this what
happens when you release the pressure? Is it a
reaction or a trend change? We can’t bank on
anything today. While the market is deciding,
it’s probably best if we sit on the sidelines till
our confidence increases.

Tomorrow is going to be a lot of watching and
reacting to Hurricane Rita. From my
perspective, it’s all about finishing out the
week. My intention tomorrow is to start my
weekend early.

Okay, team. I'm done.

Till tomorrow, happy market watching, trading
and money making. Trading Trainer is here
helping you create your dream lifestyle.

Best regards always,
A.J.

Click on the below play button to hear
the blog as an audio from A.J. himself!


About the Author
A.J. Brown is a full time options trader, author,
speaker and consultant. Watch him review stock
charts on video each day, listen to his audio
newsletter where he leads you by the hand
through the end-to-end process of successful
options traders and get tips and tested strategies
proven to boost your return on your invested
capital by massive amounts in his membership
site at TradingTrainer.com today.

* You may reprint or distribute this article as
long as you leave the content, the links and the
resource box at the end intact.

The Bear Jumps Out The Window!

Bear market making its way into town. Try to
avoid long term trades. Bear market means drop
in trading bias. Look out for Rita. Watch the
volume and oscillators. Get the latest at
TradingTrainer.com.

Hey trading team,

This is A.J. on Wednesday, September 21st with
your Trading Trainer web log. We are your
home of market insights for the serious option
trader. This web log will cover the events in the
market from today as well as prepare you for
watching the market tomorrow.

I’m going to recite a quote that I learned from
Robert Kiyosaki a while back. "The bull climbs
up the stairs while the bear jumps out the
window." What that is referring to is that a bull
market, an appreciating / ascending market
typically gains slowly – it climbs up the stairs if
you will. A bear market, a depreciating /
descending market typically crashes – it jumps
out the window if you will. We’re seeing the
bear jump out the window. Those key reversal
downs that I’ve been talking about all week, that
we identified on the weekly charts just this past
weekend, were spot on. And why should we
question them? They’re price patterns for gosh
sake.

So here is a test of a real trader, when a market
reverses like this… what do you do? I’m sure
many of you team, despite my warnings over the
last three weeks are in long positions. Now,
mind you, if were talking energy stocks, you’re
probably okay. Any others, especially retail or
housing… well we’re at the moment of truth.
These transitions are where I see even the most
experienced traders lose it. No one is ready to
cut their loses. So they wait it out. Team, nine
times out of ten, the ones that wait it out, go
broke. Think about it.

Anyway, with the 7 days crossing below the 30
days and just about every other indicator we use
signaling bear, I’ve done something I don’t
usually do, I’ve dropped our trading bias again.
We’re sitting at neutral / bearish now on two
out of the three major indexes we watch. I had
to. We’ve dropped almost to pre rally levels.
We’ve had distribution days left and right.
Signals are that this bear run will be short. But
it will be a decline none the less, and even you
folks that are out in January with your long
positions will be hard pressed to break even by
expiration. Think about it.

Tomorrow, again, we’re looking for direction.
We probably will not find it. There could be
some bargain hunters out there driving prices
up, at least when the session opens. There could
also be more profit takers that didn’t get out
today, driving prices down. If your playing the
Hurricane Rita ticket, you’ll be listening to
updates and ready to go long on stocks like
Fording Coal, Western Gas and Alcon. That’s a
little more speculative. On the grander scheme
of things, retail has come to a standstill and so
has builders... if you’re playing that ticket, than
you’ll be ready to go short on stocks like
Hovnanian, JCPenny and others like that. If this
is to overwhelming for you, open up your paper
trading log or use the free program I’ve made
available to members and trade both direction as
paper trades. Whatever you do, don’t do
nothing. Do something. Take some sort of
action.

Okay, team. I'm done.

Till tomorrow, happy market watching, trading
and money making. Trading Trainer is here
helping you create your dream lifestyle.

Best regards always,
A.J.

Click on the below play button to hear
the blog as an audio from A.J. himself!


About the Author
A.J. Brown is a full time options trader, author,
speaker and consultant. Watch him review stock
charts on video each day, listen to his audio
newsletter where he leads you by the hand
through the end-to-end process of successful
options traders and get tips and tested strategies
proven to boost your return on your invested
capital by massive amounts in his membership
site at TradingTrainer.com today.

* You may reprint or distribute this article as
long as you leave the content, the links and the
resource box at the end intact.

Watch As Analysts Are Wrong!

Neutral trading bias set. Broad market
not pushing stocks. Look towards builders
and energy. Federal interest rising.
Find how well my trades have gone.
Get the latest at TradingTrainer.com.

Hey trading team,

This is A.J. on Tuesday, September 20th with
your Trading Trainer web log. We are your
home of market insights for the serious option
trader. This web log will cover the events in the
market from today as well as prepare you for
watching the market tomorrow.

So maybe the market had not digested the rate
hike as was previously thought. I love it when,
again and again, analysts are proven wrong. It
gives me a sense of pride in a twisted sort of
way to know that common sense still works
even put up against the university educated,
manages a large-number research staff, has
direct access to all sorts of data, logic shrouded
and driven, still boils right down to emotion
under it all… analyst’s opinion. See, in the
beginning of the fed’s interest rate raising
adventure, the fed interest rate was sitting at
around 1%. It was great, but everyone knew it
was too good to last. But now, 11 sessions
later and right after a natural disaster that
brought a good portion of the country to its
knees for a week there… there are a lot of
people that are hoping that the Fed was done.
And, so no… the market had not digested the
rate hike. In fact, moving forward, I would not
be surprised, if after every Federal Open Market
Committee meeting, when the fed decides its
next step, if the market doesn’t react. We’re not
all on the same page anymore.

Suffice it to say, the market dropped today, after
starting up – kind of a rebound from yesterday’s
drop – and today's drop, especially with the
Dow below 10,500, had me drop our broad
market trading bias to neutral. If anything, I’m
starting to believe more the key reversal price
patterns we saw on our weekly charts this past
weekend. A neutral trading bias means the
stocks themselves that you choose to follow are
not getting any push from the broad market and
so it better be doing well on its own merits. It
also means, you might consider dropping down
a level of granularity for your pushes – to the
sector level. For instance, with the energy
sectors doing so well, perhaps looking for long
positions on energy stocks is in order. Another
example is builders. With builders suffering
from higher interest rates and the potential
softening of the real estate market, perhaps
looking for short positions on builder stocks is
in order.

Whatever your strategy, some more
conservative trading rules are required. First,
we need to lower our profit expectations. I’m
now only looking for 50% return on my
invested capital versus 100%. Second, we need
to be fast, especially with exit strategies. In a
neutral trading bias, we want to be taking profit
more times than waiting for follow through.
We want to err on the side of taking profit and
staying out of trades, versus waiting dips out
and jumping into every trade possible.

I sold my Tenaris October 105 Calls today. I
closed that long position by selling my calls at
$18.00 an option. After 25 days, my return on
invested capital came to 128%. At this point,
my option trading portfolio is empty. Even with
the loss on Quicksilver, I still made out like a
bandit this round. On to the next round. Bring
it on..

Tomorrow will be interesting team. There
could be some bargain hunters out there like
there was today driving prices up, at lease when
the session opens. There could also be more
profit takers that didn’t get out today, driving
prices down. There’s nothing to guide us;
except for the Energy department report on oil
stockpiles – which if still low, will send energy
stocks up and the rest of the market down. We
also have Rita to watch. Anyway, when there is
no underlying sentiment, I like to take a break.
That is most likely what I will be doing
tomorrow, just watching and enjoying the
antics. I think I’ll take tomorrow and just have
some fun counting the money I made from this
last round.

Okay, team. I'm done.

Till tomorrow, happy market watching, trading
and money making. Trading Trainer is here
helping you create your dream lifestyle.

Best regards always,
A.J.

Click on the below play button to hear
the blog as an audio from A.J. himself!


About the Author
A.J. Brown is a full time options trader, author,
speaker and consultant. Watch him review stock
charts on video each day, listen to his audio
newsletter where he leads you by the hand
through the end-to-end process of successful
options traders and get tips and tested strategies
proven to boost your return on your invested
capital by massive amounts in his membership
site at TradingTrainer.com today.

* You may reprint or distribute this article as
long as you leave the content, the links and the
resource box at the end intact.

Watch That Oil!

Oil prices explode as new storm enters
picture. Waiting to see what Feds say.
Keep an aye on DOW for a push in broad
market. A good day as I close a trade
today. Get the latest at
TradingTrainer.com.

Hey trading team,

This is A.J. on Monday, September 19th with
your Trading Trainer web log. We are your
home of market insights for the serious option
trader. This web log will cover the events in the
market from today as well as prepare you for
watching the market tomorrow.

There was no news today. The quadruple-
witching effect from last Friday had warn off.
Volume dropped. There’s another storm in the
Caribbean that investors are speculating
about… they're thinking it’s on its way to the
Gulf, this time to Texas to deal another deadly
blow to domestic oil production and refining.
The price of oil shot up by the largest flat value
in history. The stock market retreated on the
news. Everyone wants to know what the Fed is
going to say tomorrow. Most people stayed on
the sidelines today in anticipation..

I personally am still perplexed by the key
reversal down patterns that we identified on the
weekly price chart this past weekend. Those
patterns are signaling down times coming up in
the not too distant future and lasting for a while.
We will need to monitor that.

As for today, I threw out a real high selling price
for my EOG Resources options right at the tail
end of amateur hour and wound up getting the
price I had asked for. The morale is, you'll
never get what you want if you don’t ask. And
during amateur hour anything is possible. All
that is left in my portfolio now is my Tenaris
options. They appreciated nicely today so my
trailing stop loss order did not trigger. Until the
broad market indexes blow through their
respective levels of resistance, 10700 for the
Dow, 2,200 for the NASDAQ and 1,245 for the
S&P, opening long trades based on a trend
following templates will not really be my focus.

Like I said earlier, I sold my EOG resources
October 60 calls today at $14.10 an option. My
return on my invested capital came in at 127%
for 59 days. Not bad. My Tenaris October 105
Calls closed higher at $15.90 an option. I’m in
the black with a return on my invested capital of
101% after 24 days in the trade.

Team, the focus tomorrow will be on what the
Fed says in the afternoon. Not so much their
actions, but more about what they say. Right
now team we can’t count on any extra push
from the broad market. A push up would
happen if the Dow would break up through
resistance at 10,700. A push down would
happen if the Dow would break down through
support at 10,500. Right now I am very close
to dropping our trading bias, across the board to
neutral. At this point any trade you make is
really going to be based on just the merits of the
underlying stock itself. Pairing back your profit
targets at a time like this is called for.

Okay, team. I'm done.

Till tomorrow, happy market watching, trading
and money making. Trading Trainer is here
helping you create your dream lifestyle.

Best regards always,
A.J.

Click on the below play button to hear
the blog as an audio from A.J. himself!

About the Author
A.J. Brown is a full time options trader, author,
speaker and consultant. Watch him review stock
charts on video each day, listen to his audio
newsletter where he leads you by the hand
through the end-to-end process of successful
options traders and get tips and tested strategies
proven to boost your return on your invested
capital by massive amounts in his membership
site at TradingTrainer.com today.

* You may reprint or distribute this article as
long as you leave the content, the links and the
resource box at the end intact.

To Bull Or To Bear, That Is The Question!

Quadruple-witching hour happened
Friday. Bullish or bearish market ahead?
Oil prices retracting as supply increases.
Learn from my Quicksilver trade. Get the
latest at TradingTrainer.com.

Hey trading team,

This is A.J. on Sunday, September 18th with your
Trading Trainer web log. We are your home of
market insights for the serious option trader.
This web log will cover the events in the market
from this past Friday as well as prepare you for
watching the market tomorrow.

The quadruple-witching hour – the curious event
that happens once every three months – it happens
on the third Friday of March, June, September and
December – it’s the event where contracts for
stock index futures, stock index options, stock
options and single stock futures all expire –
caused a ton of volume to be traded on this past
Friday. A lot of shares were trading hands. As
well, Friday was the first day that the S&P 500
went to its new algorithm on how it chooses stocks
to be calculated within its index. It is no
longer based solely on market price. Now, it has
more to do with shares a company has available for
trade. In other words, things were topsy tervy on
Friday.

Here’s what I see that is hard for me to figure
out. On the weekly charts for our indexes, for
the Dow and the NASDAQ, we got key reversal down
patterns on heavy volume. That is where the intra
week high was higher than the previous week’s but
the close was lower. That forecasts a trend
change in the bearish direction. On the contrary,
the weekly chart for the S&P 500 gave us an upside
down Lincoln’s hat pattern. That forecasts
bullish times ahead. Although the patterns were
on heavy volume, none of them were distinct enough
to give me any guidance. And, I’m leery about
Friday’s price movement and volume as well. The
only thing I’m currently not leery about is the
price of oil. With demand dropping and supply
increasing price seems to be retreating.

I’m sticking to my guns team. Till I see the
indexes break through those resistance levels, I
am apprehensive about opening long positions right
now.

Okay team; let’s change gears a little bit. I
want to do a post mortem on Quicksilver – ticker
KWK, my worst trade of the year. Let’s look at
Quicksilver using our Bollinger band and butterfly
pattern template. When the Bollinger bands
constrict, we know an impending breakout is near,
we just don’t know it which direction. When the
20, 10 and five day exponential averages start to
collapse on each other – we call that a butterfly
pattern – we know an impending breakout is near,
again, we just don’t know in which direction. We
watched that pattern build with Quicksilver
through July and the beginning of August. We had
our alerts placed such that if price closed below
the lower Bollinger band, we were prepared to buy
a Put. Or, if price closed above the upper
Bollinger band, we were prepared to buy a Call.
We finally got it on Tuesday August 16th. That
was our signal to open a short position. And
since crossing below the Bollinger band was what
signaled us to go short, closing above the
Bollinger band was what would signal us to close
the short position. That happened on Thursday,
August 18th. From the close on Tuesday, August
16th to the close on Thursday, August 18th, we got
95 cents of underlying stock price movement which
translated to our option having a 50% return on
invested capital. This is where I broke my own
rule. The signal came telling me I should exit.
I didn’t. I lost. Team, the most important
signal to exit a trade is the indicator that
brought you in. Above and beyond that you may
employ a stop loss strategy. I broke the major
rule of exits. On top that, I didn’t cut my
losses at my low level. That was rule number two
broken. So, in an option that was a quick win,
50% return on invested capital in 2 days, I
extended the trade to 30 days and wound up loosing
91% of my initial investment. Team, this is
deplorable and a perfect example of what you
should not do.

My EOG resources October 60 calls closed higher at
$11.00 an option. My current return on my
invested capital is 77%. I’ve been in that trade
for 56 days. My Tenaris October 105 Calls closed
higher at $14.70 an option. I’m in the black with
a return on my invested capital of 86% after 21
days in the trade.

Team, typically before the Tuesday where the Fed
announces interest rate changes, the market is
quiet. I expect that tomorrow. This is not a
good time to be opening new positions because
there really is little to guide us. So for me,
the sidelines it is. I’ve got trailing stop loss
orders to setup on my EOG resources and Tenaris
options tomorrow. I’ll be setting them initially
for 15% below the bid. If they appreciate more
tomorrow, all well and good. If they depreciate,
I’ll take my profits and be content with profits
over 50%.

Okay, team. I'm done.

Till tomorrow, happy market watching, trading
and money making. Trading Trainer is here
helping you create your dream lifestyle.

Best regards always,
A.J.

Click on the below play button to hear
the blog as an audio from A.J. himself!


About the Author
A.J. Brown is a full time options trader, author,
speaker and consultant. Watch him review stock
charts on video each day, listen to his audio
newsletter where he leads you by the hand
through the end-to-end process of successful
options traders and get tips and tested strategies
proven to boost your return on your invested
capital by massive amounts in his membership
site at TradingTrainer.com today.

* You may reprint or distribute this article as
long as you leave the content, the links and the
resource box at the end intact.

Uncertainty Brings Little Price Movemant!

High volume but little price movement.
Many moving money into Gold as inflation
looms. Forecast: tomorrow an up day.
Check out charts on ticker FDG. Get the
latest at TradingTrainer.com.

Hey trading team,

This is A.J. on Thursday, September 15th with
your Trading Trainer web log. We are your
home of market insights for the serious option
trader. This web log will cover the events in the
market from today as well as prepare you for
watching the market tomorrow.

Okay… let’s think about what happened today.
We had heavier volume, in some cases up to the
100 day average. We had very little price
movement from open to close. So what the heck
is happening? We had our first wave of Katrina
victims sign up for unemployment. We had our
consumer price index tell us what the producer’s
price index told us on Tuesday, which is that the
high energy prices have yet to penetrate into the
costs of everything else; which is considered good
news. And, we had our New York and Philly Fed
manufacturing indexes say their respective
growths have spiked down; which is also
considered good news for those that fear inflation.
But, probably what the market chose to focus on
what the fact that those same manufacturing
indexes also pointed towards way higher
manufacturing costs and way higher outlook for
costs in the future. That shot the fear of inflation
right into all investors. We could see that by the
record number of investors moving their money
into precious medals like gold.

From a technicals perspective, today the Dow
formed a key reversal up price bar pattern,
forecasting tomorrow to be an up day. I’m still
not ready to re-calibrate our levels of support and
resistance on our index charts. And, I don’t want
to bring down our trading bias just yet. I want to
evaluate the weekly chart, over the weekend
before making that call.

Team, the Fording Canadian Coal charts - ticker
FDG are perfect text book examples of how to use
templates to trade. Each template we use has its
own personality; its own style. They all do
basically the same thing. They each have their
plusses and minuses… but if you were on the ball,
you would take these four charts for Fording
Canadian Coal and study them forwards and
backwards. This is it team. This is the technical
analysis we use to win – and win big at options.
Learn it. Do it. Get good at it. Okay?

My EOG resources October 60 calls closed higher
at $10.50 an option. My current return on my
invested capital is 69%. I’ve been in that trade for
55 days. I sold my Pacificare Health Systems
November 75 calls today at $3.80 an option for a
final return on my invested capital of 31% after
being in the trade for 55 days. My Quicksilver
September 40 Puts closed flat at $0.10 an option.
Tomorrow’s my last day to do anything with that.
I’m in the red with a return on my invested capital
of -94% after being in the trade for 29 days. My
Tenaris October 105 Calls closed higher at $12.20
an option. I’m in the black with a return on my
invested capital of 54% after 20 days in the trade.

Team, we may see a rally in the blue chips
tomorrow. I’m only saying that because today we
had a heavy volume stale mate between the bulls
and the bears and the Dow gave us a key reversal
up pattern. It’s going to be fun to watch. I’m still
trying to make the most out of my portfolio. And,
I don’t see myself opening any trend following
trades till the indexes have broken through those
heavy lines of resistance we talked about earlier in
the week. I do have my eye on Apache - ticker
APA tomorrow, for a quick win.

Okay, team. I'm done.

Till tomorrow, happy market watching, trading
and money making. Trading Trainer is here
helping you create your dream lifestyle.

Best regards always,
A.J.

Click on the below play button to hear
the blog as an audio from A.J. himself!

About the Author
A.J. Brown is a full time options trader, author,
speaker and consultant. Watch him review stock
charts on video each day, listen to his audio
newsletter where he leads you by the hand
through the end-to-end process of successful
options traders and get tips and tested strategies
proven to boost your return on your invested
capital by massive amounts in his membership
site at TradingTrainer.com today.

* You may reprint or distribute this article as
long as you leave the content, the links and the
resource box at the end intact.

The End Of Our Bullish Market?

Decline as news hits. Energy stocks up
still. Bullish run could be over. Market
bounces off line of resistance. Take a look
at Techne templates. Get the latest at
TradingTrainer.com.

Hey trading team,

This is A.J. on Wednesday, September 14th with
your Trading Trainer web log. We are your
home of market insights for the serious option
trader. This web log will cover the events in the
market from today as well as prepare you for
watching the market tomorrow.

Today we got another decline. A flip-flop if
you will. Last week oil was declining and
instead techs were getting the attention. Today,
like I said yesterday, the oil report and the less
than favorable retail sales report hit investors
like a ton of bricks. Not good for the broad
market as we logged another light distribution
day being led by small-caps and tech stocks.
But, of course, me being in energy options in
my portfolio, for the most part it was good for
me.

From a technicals perspective, the indexes
declined below levels of support today as well
as moving averages. And, we had two Chaikin
Oscillators cross down below their zeros today
which is a signal that the bullish run is over. I
have yet to pull down our levels of support and
resistance because this decline is abrupt and
brand new to us. And, historically, when the
broad market goes to extreme oversold so fast,
it is typically temporary. I want to wait it out on
the side lines. As well, I’m not ready to drop
our trading bias just yet. I want to play it calm,
cool and collected.

Team, the Techne charts - ticker TECH are great
examples of how to use templates to trade.
Each template we use has its own personality;
its own style. They all do basically the same
thing. They each have their plusses and
minuses… but if you were on the ball, you
would take Techne and study the template charts
forwards and backwards.. This is it team. This
is the technical analysis we use to win – and win
big at options. Learn it. Do it. Get good at it.
Okay?

My EOG resources October 60 calls closed
higher at $9.80 an option. My current return
on my invested capital is 58%. I’ve been in that
trade for 54 days. My Pacificare Health Systems
November 75 calls closed higher at $3.60 an
option. My current return on my invested
capital is 24% after being in the trade for 54
days. My Quicksilver September 40 Puts closed
lower at $0.10 an option. I’m in the red with a
return on my invested capital of -94% after
being in the trade for 28 days. My Tenaris
October 105 Calls closed higher at $11.10 an
option. I’m in the black with a return on my
invested capital of 41% after 19 days in the
trade.

Team, the broad market indexes bounced off
those levels of resistance again and have
plummeted. We need to see if this is a
correction or a full on trend reversal. I am not
opening any long positions till this scenario
plays on. Right now, my goal is to get the most
out of my existing portfolio and to back test
stocks to learn like I did today with Techne.

Okay, team. I'm done.

Till tomorrow, happy market watching, trading
and money making. Trading Trainer is here
helping you create your dream lifestyle.

Best regards always,
A.J.

Click on the below play button to hear
the blog as an audio from A.J. himself!

About the Author
A.J. Brown is a full time options trader, author,
speaker and consultant. Watch him review stock
charts on video each day, listen to his audio
newsletter where he leads you by the hand
through the end-to-end process of successful
options traders and get tips and tested strategies
proven to boost your return on your invested
capital by massive amounts in his membership
site at TradingTrainer.com today.

* You may reprint or distribute this article as
long as you leave the content, the links and the
resource box at the end intact.

The Tail Is Wagging The Dog!

Your guess is as good as mine. Look for
waves tomorrow, good or bad. Keep looking
at those charts, Tenaris a good example.
Watch for breaking of resistance on market.
Get the latest at TradingTrainer.com.

Hey trading team,

This is A.J. on Tuesday, September 13th with your
Trading Trainer web log. We are your home of
market insights for the serious option trader.
This web log will cover the events in the market
from today as well as prepare you for watching the
market tomorrow.

It happened like I said it would, yesterday. The
market for sure was more volatile today than
yesterday. There is a lot of confusion going on; a
lot of uncertainty. How bad was the disaster in the
Gulf? Was it 10,000 dead or 200? How bad is the
energy situation? Is demand softening? Is the oil
and gas supply from the Gulf resuming? What’s the
situation with inflation? Do we need to worry
about the Fed raising rates to keep it at bay? If you
haven’t noticed, no one has a clue. If they did, than
their answers wouldn’t keep changing on a daily
basis. What does this do… well, it makes people
really tired. It’s like they’re always chasing the
answers. The population when surveyed seems
sour on the whole thing. All this back and forth
affects people’s behaviors in their investing life.
When that happens in mass, you can see it in the
broad market movements. Last Friday was for sure
an accumulation day. Today was somewhat of a
distribution day. Right now investors are lagging
the news rather than leading the news. The tail is
wagging the dog versus the dog wagging its tail.
The question is how much quiet time does the
market need? Right now there is so much influence
on the stock market; gauging market direction
through trend following charts is difficult. We have
to resort to price patters like the Lincoln hat’s that
formed Monday forecasting today would be a down
day.

Team, I’m still in my stocks because tomorrow’s
reports about retail sales and from the energy
department on oil reserves will make substantial
waves that I plan to catch.

Team, apply technical templates to Tenaris - ticker
TS. Each template has its own personality; its own
style. They all do basically the same thing. They
each have their plusses and minuses… but if you
were on the ball, you would take Ternaris and study
the templates forwards and backwards. You’d go
through them over and over till you could do it
yourself. This is it team. This is the technicals we
use to win – and win big at options. Learn it. Do it.
Get good at it. Okay?

Let’s check out the example portfolio section. My
EOG resources October 60 calls closed lower at
$9.10 an option. My current return on my invested
capital is 47%. I’ve been in that trade for 53 days.
My Pacificare Health Systems November 75 calls
closed lower at $3.50 an option. My current return
on my invested capital is 21% after being in the
trade for 53 days. My Quicksilver September 40
Puts closed lower at $0.20 an option. I’m in the red
with a return on my invested capital of -88% after
being in the trade for 27 days. My Tenaris October
105 Calls closed lower at $10.60 an option. I’m in
the black with a return on my invested capital of
34% after 18 days in the trade.

Team, until the broad market indexes break above
those levels of resistance… for the Dow we are
talking 10,700, for the NASDAQ we are talking
2,200 and for the S&P500 we are talking 1,245, I
am going to be very leery of opening any long
positions. The only stock I am currently interested
in is Mentor – ticker MNT. But even then, it’s only
out of curiosity. Nope, right now, my goal is to get
the most out of my existing portfolio and to back
test stocks to learn like I did today with Tenaris.

Okay, team. I'm done.

Till tomorrow, happy market watching, trading
and money making. Trading Trainer is here
helping you create your dream lifestyle.

Best regards always,
A.J.

Click on the below play button to hear
the blog as an audio from A.J. himself!

About the Author
A.J. Brown is a full time options trader, author,
speaker and consultant. Watch him review stock
charts on video each day, listen to his audio
newsletter where he leads you by the hand
through the end-to-end process of successful
options traders and get tips and tested strategies
proven to boost your return on your invested
capital by massive amounts in his membership
site at TradingTrainer.com today.

* You may reprint or distribute this article as
long as you leave the content, the links and the
resource box at the end intact.

Indicators Point To Bullish Market!

Market holds onto last weeks gain. Producers
price index coming out, expect volatility.
Bullish market anyone? Perhaps set ROI to
50% instead of 100% Get the latest at
TradingTrainer.com.

Hey trading team,

This is A.J. on Monday, September 12th with your
Trading Trainer web log. We are your home of
market insights for the serious option trader.
This web log will cover the events in the market
from today as well as prepare you for watching the
market tomorrow.

The most impressive thing that happened today is
that the market held on to last weeks gain. There
was a high probability of a reversal today. That
did not happen. What did happen is that with all
the big acquisition news coming from tech stocks -
like Oracle acquiring Siebel and EBay acquiring
Skype - and oil again deflating as news of demand
for oil softening is rumbling around, techs shot
up and energy stocks moved down. The NASDAQ and
the small-cap S&P 600 gained. The S&P500 and the
DOW stayed flat. Volume increased on the NASDAQ
exchange. Volume decreased on the NYSE. Also,
today was a no news day. That could contribute to
the explanation on why the blue chip contingent of
the broad market was flat. Tomorrow we get the
producers price index which is bound to either
aggravate or relieve investors fears of inflation.
No matter which way, tomorrow will be a more
volatile day than today.

Coming from a technical perspective, let's count
up all the bullish signs the broad market has
given us in the last two weeks. We have all three
indexes trading above their averages. We had
Chaikin Oscillator crossing above its zero with
respect to all three indexes. We had MACD
crossings above its MACD averages with respect to
all three indexes. Today we had moving average
crossings with respect to all three indexes. And
all three indexes followed through on the counting
method to determine a market bottom. So what are
we waiting for? Why aren't we calling this a full
on bullish trading bias? The answer is because we
need a strong trend to build. We're trend
followers after all. Two weeks is not enough to
call a trend. So till then, our bias will remain
neutral-bullish - which means tend long but
realize the broad markets aren't there to bolster
the underlying stocks. Rather, the stocks are
much more on their own. With that said a
neutral/bullish trading bias usually means setting
your profit expectation to something lower that
when the market is rallying. Perhaps 50% return
on invested capital versus 100% return on invested
capital. Think about it.

My EOG resources October 60 calls closed lower at
$10.50 an option. My current return on my
invested capital is 69%. I've been in that trade
for 52 days. My Pacificare Health Systems November
75 calls closed lower at $4.60 an option. My
current return on my invested capital is 59% after
being in the trade for 52 days. My Quicksilver
September 40 Puts closed higher at $0.40 an
option. I'm in the red with a return on my
invested capital of -75% after being in the trade
for 26 days. I only have till this Friday to do
anything with those. My Tenaris October 105 Calls
closed lower at $11.20 an option. I'm in the
black with a return on my invested capital of 42%
after 17 days in the trade. My Alcon November 120
Calls were stopped out today. I sold them early
this morning at $6.90 an option. My return on
invested capital came to 10% for being in a trade
for 4 days. I'll take that.

There is no telling how the market will react to
tomorrow producers price index. Here is my plan
for tomorrow. stop loss alerts for EOG resources
and Pacificare Health Systems set at 50% for my
return on invested capital. For Tenaris, if there
are any more declines, I'm done. I've also got my
eye on Mentor tomorrow.

Okay, team. I'm done.

Till tomorrow, happy market watching, trading
and money making. Trading Trainer is here
helping you create your dream lifestyle.

Best regards always,
A.J.

Click on the below play button to hear
the blog as an audio from A.J. himself!

About the Author
A.J. Brown is a full time options trader, author,
speaker and consultant. Watch him review stock
charts on video each day, listen to his audio
newsletter where he leads you by the hand
through the end-to-end process of successful
options traders and get tips and tested strategies
proven to boost your return on your invested
capital by massive amounts in his membership
site at TradingTrainer.com today.

* You may reprint or distribute this article as
long as you leave the content, the links and the
resource box at the end intact.

Has 9/11 Hurt Or Helped Market?

Volume up thanks to institutional traders.
DOW making a move towards all time high.
Keep a good attitude towards the market.
Keep an eye on that 7 day average. Get the
latest at TradingTrainer.com.

Hey trading team,

This is A.J. on Sunday, September 11th with your
Trading Trainer web log. We are your home of
market insights for the serious option trader.
This web log will cover the events in the market
from last Friday as well as prepare you for
watching the market tomorrow.

Our friends the institutional traders were back
out again on Friday as the fall season is taking
hold. Volume really ticked up in the last half of
the trading session. Oil and gas prices dropped
again on Friday which could have been the driver
behind the end of week gains.

Today, as I was reviewing the blog content,
thoughts starting filling my head. I looked back
at some of the notes from over the years. Team, go
ahead and plot a Dow chart for the last 5 years.
Let's go back to the middle of January 2000. That
was when the Dow hit its highest ever at 11,750.
From there the next eighteen months the Dow
descended drastically. On September 10th, 2001
the Dow closed at 9,600. The market reopened on
September 17th, 2001 for a half day. On that day
the Dow suffered its largest one day point drop in
history. The Dow closed that day at 8,900. At
the end of that week the Dow was at 8,200.
What's interesting is, by November of 2001 the Dow
had returned to pre-September 11th levels. By
Christmas, the Dow was at 10,100. And, by March
of 2001 at the conclusion of that rally, the Dow
was at 10,600 - that's 1000 points higher than
September 10th, 2001. After that rally, the
market fell hard in a short time to its post 9/11
lows by October of 2002. However, from there the
DOW has quietly rallied to where it is now, 1000
points shy of its all time high set in February of
2000.

I guess my point is, the terrorist attacks were to
disable the U.S. economy and weaken the confidence
in the U.S. To some degree that has worked. No
one lives the same life they lived pre-9/11. But,
the markets show only strength and stamina.

In July, the Dow made a run above 10,700. It
didn't last. The Dow looks to be setup again,
though. The Dow only needs to gain about 100 more
points for it to be positive for the year. The
NASDAQ made a run above 2,200, which didn't last
as well. The NASDAQ looks to be making another
run at it.

Here's my point in all of this ranting team. If
you are investing in the market the way we do,
take a step back. Look at how the market has been
working. And now, think a moment. you have
nothing to complain about, do you. So, when
people are complaining about this or that, do like
I do, and take the high road. Be part of the
market you invest in and show your strength and
stamina. Sure, you're going to need to react
defensively, such as now, I've made over $34,000
in the last three weeks mostly off of buying and
selling options on energy companies. I know most
of you did, too. But, the gas price at the pump
is $3.00 a gallon. I'm walking more and doing
more at home. I'm reacting defensively. But, I'm
not complaining. I'm making money and I'm alive -
and that makes the world a beautiful place.
Misery loves company but it will bring you down
and skew your perception and then your trading
practice will suffer. Don' fall prey.

Okay enough philosophizing.

My EOG resources October 60 calls closed higher at
$11.00 an option. My current return on my
invested capital is 77%. I've been in that trade
for 49 days. My Pacificare Health Systems November
75 calls closed higher at $5.00 an option. My
current return on my invested capital is 72% after
being in the trade for 49 days. My Quicksilver
September 40 Puts closed lower at $0.30 an option.
I'm in the red with a return on my invested
capital of -81% after being in the trade for 23
days. I only have till this Friday to do anything
with those. My Tenaris October 105 Calls closed
lower at $14.90 an option. I'm in the black with
a return on my invested capital of 89% after 14
days in the trade. My Alcon November 120 Calls
closed higher at $7.30 an option. I'm in the
black with a return on my invested capital of 16%
after just being in the trade for a single day.

No telling how the market will come back after
last week's rally. Here is my plan for tomorrow.
stop loss alerts for EOG resources, Pacificare
Health Systems, Tenaris and Alcon at 50%, 50%, 70%
and break even, respectively, for my return on
invested capital. I'll be setting all these stop
loss alerts after amateur hour and they will all
be in the form of pop up alerts as well as email
alerts going to my inbox and cell phone. And,
they will be triggered upon the bid price of the
option going below a level I set. Also, for all
of these positions I'll be watching where stock
price is relative to the 7 day moving average. A
cross under the 7 day is a secondary alert that
cues me to think about exiting.

Okay, team. I'm done.

Till tomorrow, happy market watching, trading
and money making. Trading Trainer is here
helping you create your dream lifestyle.

Best regards always,
A.J.

Click on the below play button to hear
the blog as an audio from A.J. himself!

About the Author
A.J. Brown is a full time options trader, author,
speaker and consultant. Watch him review stock
charts on video each day, listen to his audio
newsletter where he leads you by the hand
through the end-to-end process of successful
options traders and get tips and tested strategies
proven to boost your return on your invested
capital by massive amounts in his membership
site at TradingTrainer.com today.

* You may reprint or distribute this article as
long as you leave the content, the links and the
resource box at the end intact.

Oil Controlling The Market!

Good volume on NASDAQ. August
export/import prices to be released. Oil
prices controlling movement of the market.
Keep those exit strategies in mind. Get the
latest at TradingTrainer.com.

Hey trading team,

This is A.J. on Thursday, September 8th with your
Trading Trainer web log. We are your home of
market insights for the serious option trader.
This web log will cover the events in the market
from today as well as prepare you for watching the
market tomorrow.

Today was quite the volatile day for the NASDAQ.
We got a spike up in trading volume for the NASDAQ
thanks to some heavy trading happening for Sirus
and Intel. On the NYSE side of the house, for the
most part, action was subdued. Oil prices bounced
around. What's neat to point out is that when any
one commodity is stretched to the limit, like oil
is right now, it becomes the predominate influence
on the other markets like our stock market. Oil
is up, stocks drop. Oil is down, stock gain. You
know when a commodity is at the highest price the
market can bear, you can see this effect. As for
today, I watched Alcon demonstrate to me the price
and volume movement I wanted to see a couple of
days ago. I opened a long position with Alcon.

Tomorrow, Friday, September 9th at 8:30 am EDT,
export prices for August minus agriculture and
import prices for August minus oil will be
released. This may or may not spur some inflation
fears. We'll have to see. Watching the long bond
yield will give you a clue.

My EOG resources October 60 calls closed higher at
$8.40 an option. My current return on my
invested capital is 35%. I've been in that trade
for 48 days. My Pacificare Health Systems November
75 calls closed higher at $4.50 an option. My
current return on my invested capital is 55% after
being in the trade for 48 days. My Quicksilver
September 40 Puts closed higher at $0.70 an
option. I'm in the red with a return on my
invested capital of -56% after being in the trade
for 22 days. My Tenaris October 105 Calls closed
higher at $15.60 an option. I'm in the black with
a return on my invested capital of 97% after 13
days in the trade. And, today I opened new long
positions by buying the Alcon November 120 Calls.
I bought them today at $6.30 and option. They
closed higher at $7.10 and option. I'm in the
black with a return on invested capital of 13%
after just being in the trade for a few hours.

The move I made by holding off on exiting my
Tenaris trades was a good one. Although the drop
in supplies of oil was less than expected, the
fear that oil recovery in the gulf has slowed,
caused the commodity price to run up and with that
my Tenaris stock ran up as well.

Here is my plan for tomorrow. I'll be setting my
stop loss alerts for EOG resources, Pacificare
Health Systems, and Alcon at 20%, 40% and break
even, respectively, for my return on invested
capital. For Tenaris I'm going to once again
switch exit strategies to a trailing stop loss
strategy and I will begin with setting the stop
loss at 15% below the current price. I'll be
setting all these stop loss alerts after amateur
hour and they will all be in the form of pop up
alerts as well as email alerts going to my inbox
and cell phone. And, they will be triggered upon
the bid price of the option going below the
associated stop level. Also, for all of these
positions I'll be watching where stock price is
relative to the 7 day moving average. A cross
under is a secondary alert that cues me to think
about exiting.

Okay, team. I'm done.

Till tomorrow, happy market watching, trading
and money making. Trading Trainer is here
helping you create your dream lifestyle.

Best regards always,
A.J.

Click on the below play button to hear
the blog as an audio from A.J. himself!

About the Author
A.J. Brown is a full time options trader, author,
speaker and consultant. Watch him review stock
charts on video each day, listen to his audio
newsletter where he leads you by the hand
through the end-to-end process of successful
options traders and get tips and tested strategies
proven to boost your return on your invested
capital by massive amounts in his membership
site at TradingTrainer.com today.

* You may reprint or distribute this article as
long as you leave the content, the links and the
resource box at the end intact.

Market Rises To A Neutral/Bullish Market

Market increases with heavier volume. “Black
Gold” prices drop as Gulf comes back online.
Fed’s may increase interest rates twice this
year. Take a look at the charts. Get the latest
at TradingTrainer.com.

Hey trading team,

This is A.J. on Wednesday, September 7th with your
Trading Trainer web log. We are your home of
market insights for the serious option trader.
This web log will cover the events in the market
from today as well as prepare you for watching the
market tomorrow.

Stocks started lower today but closed higher on
heavier volume. That was enough follow through to
yesterday's rally that I have bump up the levels
of support and resistance on our index charts. I
also notched up our trading bias from Neutral to
Neutral / Bullish. Quite a few TradingTrainer.com
members have been reporting back to me that they
made amazing gains on long trades in the past two
weeks. I'm ecstatic for them.

Oil prices dropped today on news that the Gulf
Coast was coming back online as far as producing
and refining the black gold, faster than expected.
And, the bond market responded to reports that
inflation fears are still around with yields of
the 10 year long bond bumping up. The expectation
is once again that the Fed is going to increase
short term interest rates two times this year; so
much for a break in the name of disaster relief.

I stayed away from Alcon today. There was no
follow through. Price dropped below resistance at
$120 per share on heavier volume. That level of
resistance is strong; possibly stronger than
expected. We'll continue to watch Alcon as an
opportunity throughout the week.

Team. if you have not looked at the index charts
lately to get a reading on how the broad market is
doing. Today is the day! Look at the charts and
see if you see what I see. Besides a long term
trend, the broad market has confirmed a new rally.
Till we have a confirmed trend, open long
positions with a little trepidation, okay?

Team, did you notice CERN finally broke out of its
consolidation pattern yesterday. Check out that
chart team!

My EOG resources October 60 calls closed higher at
$7.50 an option. My current return on my
invested capital is 21%. I've been in that trade
for 47 days. My Pacificare Health Systems November
75 calls closed higher at $4.10 an option. My
current return on my invested capital is 41% after
being in the trade for 47 days. My Quicksilver
September 40 Puts closed flat at $0.40 an option.
I'm in the red with a return on my invested
capital of -75% after being in the trade for 21
days. And my Tenaris October 105 Calls closed
lower at $13.90 an option. I'm in the black with
a return on my invested capital of 76% after 12
days in the trade.

I held off of getting out of Tenaris after I got
my lagging stop loss alert because I want to see
the effects of tomorrow's energy department oil
stocks report on the market.

This is my plan for tomorrow. I'll be setting my
stop loss alerts for EOG resources at 10% return
on invested capital and for Pacificare Health
Systems, I'll set it 20% return on invested
capital. My stop loss alert for Tenaris will be
set at 65% return on invested capital but, again,
I want to wait for the 10:30 a.m. EDT report. For
all of these positions I'll be watching where
stock price is relative to the 7 day moving
average. Throughout the day, I'll be watching ACL
and AMZN. I have to be honest team, I've still
got the willies. If the energy report is
shocking, I wouldn't be surprised if the market
pulls back. Tomorrow, I'll be more apt to stay
out of new positions taking a seat on the
sidelines than I would be getting in. Just like
yesterday, it would have to be compelling for me
to open a new position tomorrow.

Okay, team. I'm done.

Till tomorrow, happy market watching, trading
and money making. Trading Trainer is here
helping you create your dream lifestyle.

Best regards always,
A.J.

Click on the below play button to hear
the blog as an audio from A.J. himself!

About the Author
A.J. Brown is a full time options trader, author,
speaker and consultant. Watch him review stock
charts on video each day, listen to his audio
newsletter where he leads you by the hand
through the end-to-end process of successful
options traders and get tips and tested strategies
proven to boost your return on your invested
capital by massive amounts in his membership
site at TradingTrainer.com today.

* You may reprint or distribute this article as
long as you leave the content, the links and the
resource box at the end intact.

Fed's, Katrina, What Caused The Rally!

Volume increases today. Temporary events
cause rally in market. Possibility of
bumping up trade bias lines. Unsure about
today’s rally. Get the latest at
TradingTrainer.com.

Hey trading team,

This is A.J. on Tuesday, September 6th with your
Trading Trainer web log. We are your home of
market insights for the serious option trader.
This web log will cover the events in the market
from today as well as prepare you for watching the
market tomorrow.

Our friends the institutional traders were out in
numbers today buying up stock shares, driving
stock prices high. Why? Could be that crude oil
prices are down thanks to the subsidies of crude
and its distillates coming from other countries as
well as from the U.S. strategic reserves. Could
be that the sentiment out there is that the Fed is
going to take a pause from raising rates at the
end of this month. It could be the $10.5 billion
that the U.S. government is injecting into the
economy in the form of disaster relief. It could
be that the institute for supply management's
service sector index, pre-Katrina came in higher
than last month versus the estimates which had
everybody set for it to come lower. Or, maybe
it's the retail segment stores that are hinting
that their sales are going to be alright if you
don't factor in Katrina. Now. what do all these
news bits have in common, team? That's right,
they are temporary. So, what do you think about
the rally? How long will it last? This is
definitely something for us to watch. What we got
today was similar to the follow through you need
when pulling off the "counting method to determine
a market bottom". It confirms that a down trend
is over and a confirmed market rally has begun.
The only question in my mind was, were we in a
down trend? I need to wait a few more days and
see if today's gain is sustainable. If it lasts,
I'll be bumping up our trading bias and moving up
our horizontal lines of support and resistance on
our broad market index charts.

My EOG resources October 60 calls closed higher at
$7.40 an option. My current return on my
invested capital is 19%. I've been in that trade
for 46 days. My Pacificare Health Systems November
75 calls closed higher at $4.00 an option. My
current return on my invested capital is 38% after
being in the trade for 46 days. My Quicksilver
September 40 Puts closed lower at $0.40 an option.
I'm in the red with a return on my invested
capital of -75% after being in the trade for 20
days. And my Tenaris October 105 Calls closed
higher at $15.40 an option. I'm in the black with
a return on my invested capital of 95% after 11
days in the trade.

This is my plan for tomorrow. I'll be setting my
stop loss alerts for EOG resources at 10% return
on invested capital and for Pacificare Health
Systems, I'll set it 20% return on invested
capital. With respect to Tenaris, I'm going for
the trailing stop loss strategy starting at 15%
below the after amateur hour price. For all of
these I'll be watching where price is relative to
the 7 day moving average. Throughout the day,
I'll be watching Alcon - ticker ACL - and deciding
based on tomorrow's performance as well as the
broad market performance, whether opening a long
entry would be worthwhile. I have to be honest
team, today's rally after last weeks volatility
gives me the willies. So, tomorrow, I'll be more
apt to stay out of new positions taking a seat on
the sidelines than I would be getting in there.
It would have to be compelling for me to open a
new position tomorrow.

Okay, team. I'm done.

Till tomorrow, happy market watching, trading
and money making. Trading Trainer is here
helping you create your dream lifestyle.

Best regards always,
A.J.

Click on the below play button to hear
the blog as an audio from A.J. himself!

About the Author
A.J. Brown is a full time options trader, author,
speaker and consultant. Watch him review stock
charts on video each day, listen to his audio
newsletter where he leads you by the hand
through the end-to-end process of successful
options traders and get tips and tested strategies
proven to boost your return on your invested
capital by massive amounts in his membership
site at TradingTrainer.com today.

* You may reprint or distribute this article as
long as you leave the content, the links and the
resource box at the end intact.

Katrina Raising Energy Stock!

Customary drop in volume before holiday.
Katrina relief on its way. A review of the
covered call strategy. Waiting to see what
tomorrow’s news brings. Get the latest at
TradingTrainer.com.

Hey trading team,

This is A.J. on Monday, September 5th with your
Trading Trainer web log. We are your home of
market insights for the serious option trader.
This web log will cover the events in the market
from this past Friday as well as prepare you for
watching the market tomorrow.

Volume dropped significantly on Friday as is
customary before a three day holiday. Energy
prices cooled somewhat on Friday when crude from
the International Energy Agency and the U.S.
strategic reserves was introduced to help buffer
the drop in supply. Also, the Federal Government
will be injecting 10.5 billion dollars into the
economy in the form of Hurricane Katrina debacle
relief over the next couple weeks. Just remember
these one time subsidies often sacrifice short
term relief with long term pain. High energy
prices and the costs to clean up after the
Hurricane Katrina debacle are really powering
speculation that the Fed will hold off on further
rate hikes at least for one session before the end
of 2005. For the week our broad market index
bell-weathers all closed up ending some down
trends with volume weighted key reversal ups.
This upcoming week will be an interesting one. On
Thursday we'll get the first real tally since
Hurricane Katrina came through, of the energy
supplies. I'm expecting reaction to the real
numbers. In the meantime, I've been taking the
long weekend to catch up on some office
organization. Team, nothing makes for an easier
go of trading, than when your office is clean and
organized.

Let's review really quick the covered call writing
strategy. The strategy is, you buy the underlying
stock shares in lots of 100 and then you sell
option contracts on it for the premiums.
Typically, you want to buy the stock when it was
low and then sell the premium when it is high.
The beauty of the covered call strategy is that as
soon as you sell the option, you have locked in
your gains. Because of this fact, covered call
writing is something that I do in my retirement
plans where option trading is not conservative
enough.

See, team every morning I look through our covered
call watch list and look at the near term option
premiums minus the current price of the stock plus
the strike price of the option. I take that as a
ratio to the current price and that will tell you
your current return on invested capital. If I see
any in our watch list that are over 5% I get
excited. And, with Grace (ticker: GRA) having
a channel breakout early last week,.. I got
excited specifically aboout Grace.

Grace's Chaikin Oscillator pulled back on
Wednesday which is when I bought a few hundred
shares of the stock. I paid 10.55 a share. Then,
on Friday I sold the September 10 Call at 1.85 per
call. Now let's due the math. We have two
scenarios when the September 10 Call expires. The
first scenario is that the option is in the money
and I get called out. In that scenario, I buy the
stock at 10.55, I sell the call at 1.85, and I get
called out of the stock at 10.00. That means my
return on invested capital is 1.85 (I received for
selling the option) plus the $10 (I received when
I got called out) minus the $10.55 I paid for the
stock all over the $10.55 I paid for the stock.
So if I'm called out, I make 12% ROI in under
three weeks. Not bad for a retirement fund
investment. Now, the alternative is that the
option is out of the money and I don't get called
out. That means I made $1.85 per stock share and
I get to sell another call again next month as
soon as this month's expires. In fact, it is not
uncommon to write three or four subsequent months
of covered calls before finally getting called
out. It's a beautiful thing. I'll keep you
posted on my Grace covered calls as the third
Friday of September rolls around.

Looking at my current portfolio... My EOG
resources October 60 calls closed lower at
$6.80 an option. My current return on my
invested capital is 10%. I've been in that trade
for 42 days. My Pacificare Health Systems November
75 calls closed higher at $3.50 an option. My
current return on my invested capital is 21% after
being in the trade for 42 days. My Quicksilver
September 40 Puts closed higher at $0.50 an
option. I'm in the red with a return on my
invested capital of -69% after being in the trade
for 16 days. And my Tenaris October 105 Calls
closed lower at $14.30 an option. I'm in the
black with a return on my invested capital of 81%
after 7 days in the trade.

This is my plan for tomorrow. I'll be setting my
stop loss alerts for EOG resources at 5% return on
invested capital and for Pacificare Health
Systems, I'll set it 10% return on invested
capital. With respect to Tenaris I'm back to a
set stop loss strategy at 65% return on invested
capital. I'm also watching the price with respect
to the 7 day moving average. Tomorrow will be
more of a watch and see day as we see how the news
that has been streaming over the weekend effects
investors on their day back.

Okay, team. I'm done.

Till tomorrow, happy market watching, trading
and money making. Trading Trainer is here
helping you create your dream lifestyle.

Best regards always,
A.J.

Click on the below play button to hear
the blog as an audio from A.J. himself!

About the Author
A.J. Brown is a full time options trader, author,
speaker and consultant. Watch him review stock
charts on video each day, listen to his audio
newsletter where he leads you by the hand
through the end-to-end process of successful
options traders and get tips and tested strategies
proven to boost your return on your invested
capital by massive amounts in his membership
site at TradingTrainer.com today.

* You may reprint or distribute this article as
long as you leave the content, the links and the
resource box at the end intact.