The Market Continues To March Lower...

Rebound buying early only to give way to high volume downward pressure and closes at intraday lows. Oil gained, but energy stocks dropped with the rest of the broad market. Do you know how to look at our templates upside down for short entries? Invest in Puts when you see a short entry materialize. Click here to get today's free options advice; have A.J. explain option trading to you in everyday language.

Hey trading team,

This is A.J. on Wednesday, October 12th 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 phenomena is happening team. Every morning price opens higher and for amateur hour, for the most part, rebound buying happens. Probably from everyday traders like you and I that thinks it can’t get any worse and that every stock is at a bargain right now. Then, interestingly enough, our institutional traders jump in, especially in purging their small cap positions, and leaving a wake of heavy volume behind them after yet another sell off, they drive prices to close at their intraday low. It’s pretty neat actually.

From our perspective, our bearish trading bias has really become rather robust. Meaning picking a stock that can stand on its two feet is less and less necessary. The broad market is trending down and it is pulling everything with it. Even having the price of oil going back up, which should bolster energy stocks… well, it just isn’t happening because the downward force is so strong and far reaching.

The good news for us is that we have the magical Put option. Team, we can make money when the market is going down. Don’t be afraid to use that tool in the toolbox.

My Techne January 55 Call closed down today at $2.50 per option. I’m 58% into my initial investment on this one team after only 8 days.

Team, scan through those buffered, reactive and Chaikin reports to find possible short entries. Follow the same recipe we use for long entries, only substitute Puts for calls and look at everything upside down. Watch Meritage homes – ticker MTH - tomorrow. And, always be ready for a technical bounce up when the bulls fight back, even if it is temporary, you need to be ready.

Tomorrow is a day of news that could send the sensitive market all over the place. Expect short term volatility – as in over the period of the day. Expect long term downward movement – as in over the period of a week.

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.

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