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.

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