Option Trading Newsletter: December 19, 2014

Random Walk Trading.com

Friday

December 19, 2014

1-855-RWT-0008

Prepared by the good people at Random Walk, LLC.

Santa Loaded His Sleigh Yesterday

Day 2 of the move

VEGAS

Almost Sold Out

What is there not to love about 2 days of trading and QA, the Cirque, and a good clean wholesome environment to do it in?

Screen Shot 2014-12-18 at 3.17.47 AM

Great Morning !

Screen Shot 2014-12-19 at 4.17.38 PM

Today’s Number(s)

 No Numbers Today

Screen Shot 2014-11-11 at 12.56.19 AM

Yesterday and Today

Screen Shot 2014-11-11 at 12.59.43 AM

Yesterday

Here cAme Santa Claus,
Here cAme Santa Claus,
Right Past (Dow 17,750) Santa Claus Lane

OIL no longer matters, so it appears. Oil was down on Tuesday but we were up 288. Oil was down $2 yesterday and the Dow was up 421, or 2.5%. We are now ONLY 221 points from 18,000.

Why did the market move up 700 points in the last two days? Yellen’s speech dispelled fears (that was holding the market down) interest rates were going to rise in the immediate future. In the meantime, she also brought up how lower oil prices was keeping inflation in check. All of a sudden, at least for 2 days, low oil prices became an “ok thing”. Yes there was fear of falling oil, but if it keeps the Fed from raising rates, then “Maybe it is a good thing?”

A perfect example was today. We opened higher today and crude was up $1. As the day went on oil reversed and fell $2, but the markets were still flying higher. The markets closed on their highs, but oil closed on their lows. Two weeks ago oil being down $2 would have been accompanied by the Dow falling 200.

TODAY

Last week I was pontificating that we would still have a Christmas rally and that we would be up to 18,000. I expected it to happen over the course of three weeks, NOT 3 days. The only note of caution I have is the manner in which the markets closed today.

Was the last 100 Dow points on the close today an early start to expiration this morning? Were professional traders so concerned about the velocity of the market move today that they didn’t want to wait until the open to buy their stock?

In other words, program traders may have to hedge their long synthetic stock positions when the current one expire on the open. They almost always wait until the open on Friday. Did they do it on the close yesterday instead of the open today?

If that was the case then we might have some pull back today. We will see.

Screen Shot 2014-11-03 at 6.54.48 AM

POT TONIGHT

Below is the schedule for the month.Screen Shot 2014-12-16 at 1.12.08 AM

Screen Shot 2014-11-03 at 6.55.48 AM

Contract the office at 1- 855 – RWT – 0008 for more details.

Screen Shot 2014-12-18 at 4.06.35 AM

Too True To Be Funny

## ## ## ## ## ## ## ## ##

Attorney Stuff

Screen Shot 2014-12-10 at 7.58.52 AM

DISCLAIMER (Seriously!) All data above is provided for informational purposes only. Random Walk makes no guarantee as to the accuracy of the data.

Trading is almost as much fun as black jack in Vegas, but without all the annoying distractions of free drinks, Broadway shows, gorgeous people with low morals, and free buffets. It also has about the same odds of success, so when you lose all your money you wont have to walk past a smiling pit boss. Even Bruce Wayne lost everything with options in The Dark Knight Rises, and Superman keeps his day job at the Daily Planet newspaper.

We have the utmost respect for our attorneys who tell us any attempt to trade is throwing money out the window, and investing is risky business (still a great movie). Past performance doesn’t mean a thing. The future is even scarier. Random Walk and everyone associated with it promises absolutely nothing. We guarantee nothing. We wont ever do anything right unless it is an accident.

Random Walk only provides education (and a great cup of Starbucks if you visit our office). If you want advice please consult an attorney, licensed broker, Joe Kearnan, tax consultant, investment adviser, etc. Random Walk, LLC is full of morons, dolts, has-been(s), chromosome damaged individuals, thieves, losers, and carnival barkers. Any attempt to find a semblance of intelligence or integrity in Random Walk would be a waste of time. We will sell products, but advise against buying them. We Do Not Give Advice.

When reading this you acknowledge that you agree to hold harmless Random Walk, LLC, its employees, independent contractors, authors, managers, owner(s), spouses, children, cousins, friends, bail bondsmen, and favorite bartender. In fact, you agree to grow up, accept some responsibility for your own actions, and stop believing the media that sells you on how nothing is your fault. You further agree in the antiquated and lost values that America is the land of opportunity and not the land of handouts. You agree any loss in the markets is a result of your own actions as we told you NOT to trade without consulting someone other than us.

All paper trades are SOLELY for example and to illustrate how certain strategies could perform without the benefit of hindsight and back-testing. You agree NOT to trade based on anything we say, do, write, advertise, etc. If we were smart we would be teaching high-school math and making the really big bucks. You agree to abide by the laws of your country and that it is legal to accept this transmission.

Every attempt has been made to ensure accuracy, but we are clueless. As a result it would be foolish and impossible to assure the accuracy of any numbers and/or come close to writing a sentence that is grammatically correct. You agree not to get on our case emotionally, physically, spiritually (no Voodoo dolls please) or legally when we screw up. We are doing our best to keep up with evolution, but it is a fast race and we are falling behind. If any of this stuff is too hard to accept please let us know and we will remove you from our mailing list and short term memory.

Random Walk deeply cares about each and every student. We try to keep the selling of products to a minimum. We believe our students are a result of attraction rather than promotion. This does NOT mean that the more attractive you are, the more we promote ourselves (in general).

Our products are written ONLY by floor traders, fund managers and retired floor traders. But that really doesn’t mean much. They are expensive and unique. That does NOT mean they (materials) come on a tablet of concrete from Mt. Sinai. . If you are still reading this, you will likely be the first to have gotten this far. No guarantee for accuracy is made. Nothing we do is audited and we make no promise of accuracy.

Because of the proprietary nature of our materials and the ease of electronic copying, all sales are final. There are far too many people who have no problem stealing our materials and putting them on torrents or copying them. These are the same low-life, selfish, whining, half-wit hypocrites that would cry like a newborn with a wet diaper if someone stole their car radio. They have to pay for our materials before stealing them, and live with their karma (and our legal team). Yes, we have caught a few and now have one person working on detective work solely.

Sales are far from our largest concern. If you are a whiner, complainer, or generally unhappy with life please go to someone else in this industry who values money over happiness. We can point you in the direction of other firms that only care about the bottom and top line. Jerry Springer can also point you in the right direction. Besides whiners are a total distraction from the awesome group of students we are fortunate to have. We are truly blessed and thank them (provided that is fine with our lawyers). “Thank yous” are only handed out in countries where legal and void where prohibited. If your country does not allow “thank yous” please refrain from accepting it. This disclaimer is copyright material and not a joke.

Option Trading Newsletter: December 18, 2014

Random Walk Trading.com

Thursday

December 18, 2014

1-855-RWT-0008

Prepared by the good people at Random Walk, LLC.

Santa Loaded His Sleigh Yesterday

Day 1 of the move

VEGAS

Almost Sold Out

What is there not to love about 2 days of trading and QA, the Cirque, and a good clean wholesome environment to do it in?

Screen Shot 2014-12-18 at 3.17.47 AM

Great Morning !

Screen Shot 2014-12-18 at 3.21.37 AM

Today’s Number(s)

Screen Shot 2014-12-18 at 3.40.15 AM
Screen Shot 2014-11-11 at 12.56.19 AM

Yesterday and Today

Screen Shot 2014-11-11 at 12.59.43 AM

Yesterday

Here comes Santa Claus,
Here comes Santa Claus,
Right down Santa Claus Lane

We started out climbing higher as oil ran up $3.01. Despite the price of crude slowly drifting lower until reaching unchanged, the Dow managed to stay up 130-150 points. After the Fed announcement came out at 2:00pm we flew up until we were up a net 300 Dow points and 43 SPX points.

Helping matters out are expectations that Putin has had enough of his economy being beaten down, so he is going to make an announcement at 4:00am eastern stating that he is stopping tensions in the Ukraine. At least that is the rumor. With Putin you never really know what he is thinking, so it could be the exact opposite.

POT people, the RSX was up another 10% yesterday. We are long the 13 strike call and sold the 18 strike call 2/3 as many times on the close. Those long calls are almost $3 ITM. I just wish we bought more than 20 contracts.

TODAY

This is a hard call.

It is not uncommon for the market to pull back a little after a day like yesterday, especially in this crazy market. Then again, I would not be surprised to see the market keep moving higher.

The one caveat is oil. It is not uncommon for a commodity to keep going well beyond the point of reason to the downside (or upside). I am not sure the worst is over for oil since we could not keep oil positive for the day.

The one thing that could have yet another big day is the Russian Index and Ruble. Just waiting for Putin to talk this morning.

Screen Shot 2014-11-03 at 6.54.48 AM

POT TONIGHT

Below is the schedule for the month.Screen Shot 2014-12-16 at 1.12.08 AM

Screen Shot 2014-11-03 at 6.55.48 AM

Contract the office at 1- 855 – RWT – 0008 for more details.

Screen Shot 2014-12-18 at 4.06.35 AM

Too True To Be Funny

## ## ## ## ## ## ## ## ##

Screen Shot 2014-12-18 at 3.50.51 AM

Attorney Stuff

Screen Shot 2014-12-10 at 7.58.52 AM

DISCLAIMER (Seriously!) All data above is provided for informational purposes only. Random Walk makes no guarantee as to the accuracy of the data.

Trading is almost as much fun as black jack in Vegas, but without all the annoying distractions of free drinks, Broadway shows, gorgeous people with low morals, and free buffets. It also has about the same odds of success, so when you lose all your money you wont have to walk past a smiling pit boss. Even Bruce Wayne lost everything with options in The Dark Knight Rises, and Superman keeps his day job at the Daily Planet newspaper.

We have the utmost respect for our attorneys who tell us any attempt to trade is throwing money out the window, and investing is risky business (still a great movie). Past performance doesn’t mean a thing. The future is even scarier. Random Walk and everyone associated with it promises absolutely nothing. We guarantee nothing. We wont ever do anything right unless it is an accident.

Random Walk only provides education (and a great cup of Starbucks if you visit our office). If you want advice please consult an attorney, licensed broker, Joe Kearnan, tax consultant, investment adviser, etc. Random Walk, LLC is full of morons, dolts, has-been(s), chromosome damaged individuals, thieves, losers, and carnival barkers. Any attempt to find a semblance of intelligence or integrity in Random Walk would be a waste of time. We will sell products, but advise against buying them. We Do Not Give Advice.

When reading this you acknowledge that you agree to hold harmless Random Walk, LLC, its employees, independent contractors, authors, managers, owner(s), spouses, children, cousins, friends, bail bondsmen, and favorite bartender. In fact, you agree to grow up, accept some responsibility for your own actions, and stop believing the media that sells you on how nothing is your fault. You further agree in the antiquated and lost values that America is the land of opportunity and not the land of handouts. You agree any loss in the markets is a result of your own actions as we told you NOT to trade without consulting someone other than us.

All paper trades are SOLELY for example and to illustrate how certain strategies could perform without the benefit of hindsight and back-testing. You agree NOT to trade based on anything we say, do, write, advertise, etc. If we were smart we would be teaching high-school math and making the really big bucks. You agree to abide by the laws of your country and that it is legal to accept this transmission.

Every attempt has been made to ensure accuracy, but we are clueless. As a result it would be foolish and impossible to assure the accuracy of any numbers and/or come close to writing a sentence that is grammatically correct. You agree not to get on our case emotionally, physically, spiritually (no Voodoo dolls please) or legally when we screw up. We are doing our best to keep up with evolution, but it is a fast race and we are falling behind. If any of this stuff is too hard to accept please let us know and we will remove you from our mailing list and short term memory.

Random Walk deeply cares about each and every student. We try to keep the selling of products to a minimum. We believe our students are a result of attraction rather than promotion. This does NOT mean that the more attractive you are, the more we promote ourselves (in general).

Our products are written ONLY by floor traders, fund managers and retired floor traders. But that really doesn’t mean much. They are expensive and unique. That does NOT mean they (materials) come on a tablet of concrete from Mt. Sinai. . If you are still reading this, you will likely be the first to have gotten this far. No guarantee for accuracy is made. Nothing we do is audited and we make no promise of accuracy.

Because of the proprietary nature of our materials and the ease of electronic copying, all sales are final. There are far too many people who have no problem stealing our materials and putting them on torrents or copying them. These are the same low-life, selfish, whining, half-wit hypocrites that would cry like a newborn with a wet diaper if someone stole their car radio. They have to pay for our materials before stealing them, and live with their karma (and our legal team). Yes, we have caught a few and now have one person working on detective work solely.

Sales are far from our largest concern. If you are a whiner, complainer, or generally unhappy with life please go to someone else in this industry who values money over happiness. We can point you in the direction of other firms that only care about the bottom and top line. Jerry Springer can also point you in the right direction. Besides whiners are a total distraction from the awesome group of students we are fortunate to have. We are truly blessed and thank them (provided that is fine with our lawyers). “Thank yous” are only handed out in countries where legal and void where prohibited. If your country does not allow “thank yous” please refrain from accepting it. This disclaimer is copyright material and not a joke.

Options Trading Newsletter: December 17, 2014

Wednesday

December 17, 2014

1-855-RWT-0008

Prepared by the good people at Random Walk, LLC.

This week’s POT = Jelly Roll and X-mas Rally.

Important vote on next year’s format and text book.

Fed Minutes on Today at 2pm

Great Morning !mu1mu2Screen Shot 2014-11-11 at 12.56.19 AM

Yesterday and Today

Screen Shot 2014-11-11 at 12.59.43 AM

Yesterday

Insanity, hope, and then fleeting hope.

Where do I begin? The Dow opened down 99 points and oil was down $2 at 53.60. After the initial downside scare the market inched back to nearly unchanged where it looked like it would spend the day.

With the collapse of the Russian Ruble the RSX index was down 10% until it was announced that trading was being halted on the Ruble. Once that happened the Ruble ran higher and the RSX index went from -10% to up +7.4%. Think about that move! That is equivalent to the Dow being down 1,700 points and then up 1,265 points in a 15 minute period.

With that the Dow shot up 247 points, a 350 point turn around. But wait, if that were not enough….

Shortly after that the Dow, RSX, and SPX worked its way back down to unchanged. Nope…not enough yet….the market has more for us. At 1:30 eastern the markets started their advance once again, but only made it up about 94 Dow points.

Now comes the crazy stuff….

At 2:30pm (eastern) our buoyant markets declined again while the lead-balloon Russian markets stayed up. The Dow and E-minis went into a quick spiral down near the close with the Dow falling back down 111 points, the E-minis fell -18 points, Oil remained unchanged, and Russia went up a little.

The End. And in all honesty, I give up. NOTHING made sense. It was Bizzaro world and the graph is below. And trust me when I say that the day was a lot more zany than the image below depicts. It was riddled with major news about the oil, US and Russian markets.

Talks of a new Russian Revolution came up with a CNBC survey with 51% of respondents saying it could happen. An emergency meeting of the Russian Financial Council was announced. People are speculating that Putin will make further military advances into other countries, or push the Ukraine harder (which I have been saying for weeks). In short, weird news all day long.mu3

TODAY

Yesterday

Who Knows? I have even began questioning myself this week. I understood how the markets got focused on oil so much that they could not ignore a down market. Yet that doesn’t explain how an slightly up date, or one of stabilization, wasn’t bullish and a late in the day sell-off came.

Yellen and Fed

Today we have Yellen talking and the Fed rate decision being discussed. This is always big news going in, but not always big news after. Very seldom will we have a down day after the rate announcement. We typically get a rally even if the news isn’t great, but more from the relief that the uncertainty for the month is over. The last two rate decision announcements were such non-events that if you didn’t know they were coming out, you would not have been able to tell something was released by watching stock prices.

Yesterday’s Close

I think yesterday’s close was an aberration. The markets responded so positively to oil going up $0.50 – $1.00 at one point that even I was a little surprised and thought I was witnessing the start of the Santa Claus rally. On the way up the Dow was up 130 points when oil was unchanged. So I thought if we had oil close unchanged we would have at least had a positive day. I think this is what most people were thinking, so when we started to sell off everyone jumped on thinking “what am I missing? I better get out

All that said, if we do not close up big on the day I am going to start rethinking my belief in Santa and start looking for a Grinch. From 2:00pm to 3:00pm will say everything.Screen Shot 2014-11-03 at 6.54.48 AM

POT TONIGHT

Below is the schedule for the month.Screen Shot 2014-12-16 at 1.12.08 AM

Screen Shot 2014-11-03 at 6.55.48 AM

Contract the office at 1- 855 – RWT – 0008 for more details.

Make sure you are in POT Wed for key votes on Next Year’s Format.

Jelly Rolls

Option Trading Newsletter: December 16, 2014

Random Walk Trading.com

Tuesday

December 16, 2014

1-855-RWT-0008

Prepared by the good people at Random Walk, LLC.

This week’s POT = Jelly Roll and X-mas Rally.

Important vote on next year’s format and text book.

Fed Minutes on Tomorrow at 2pm

What is there not to love about 2 days of trading and QA, the Cirque, and a good clean wholesome environment to do it in?

Great Morning !

Closing Prices From Yesterday

Screen Shot 2014-12-16 at 1.03.06 AM

Today’s Number(s)

Screen Shot 2014-12-16 at 1.09.29 AM

Screen Shot 2014-11-11 at 12.56.19 AM

Yesterday and Today

Screen Shot 2014-11-11 at 12.59.43 AM

Yesterday

Oil blanketed another Dow party as the S&P opened +20 points higher, and then sold off to down -$14 after oil slid. Oil had started the day roughly unchanged (up or down 0.20), and just kept sliding slowly lower all day. At the end of the day oil was down over -$2 to close at 55.20 while the Dow closed down 100.

What is interested is that the oil sell-off is having less of an effect on the market that it has had previously (for the US markets). Yet the oil slide did cause a big drop in Germany’s markets (which does a lot of business with Russia) and Russia. The Russian markets were down 12% yesterday alone.

We rolled (in POT) out long calls down to the 14 strike, which is fortuitous as the Russian markets are up 4% in the after market. We will see how it opens.

TODAY

At midnight oil was climbing. Crude futures are up 0.43 and E-minis are up $6.25. This would indicate an opening in the Dow of about +65 points. Keep in mind that the after market products are likely a little cautious due to lack of liquidity, and they do not want to get ahead of themselves. If crude is up even the same 0.43 on the open I suspect at least 150 point move higher, for no other reason that the ratio (oil to Dow) they have been trading on to the upside.

Also keep in mind that the Fed meets today and tomorrow, and their minutes are released tomorrow at 2:00pm. This is always a very watching (if not the MOST watched market news).

Continue reading

Option Trading Newsletter: December 15, 2014

Random Walk Trading.com

Monday

December 15, 2014

1-855-RWT-0008

Prepared by the good people at Random Walk, LLC.

VEGAS

Almost Sold Out

What is there not to love about 2 days of trading and QA, the Cirque, and a good clean wholesome environment to do it in?

Great Morning !

Closing Prices From Yesterday

Screen Shot 2014-12-15 at 8.55.49 AM

Today’s Number(s)

Screen Shot 2014-12-15 at 8.55.57 AM

Screen Shot 2014-11-11 at 12.56.19 AM

Yesterday and Today

Screen Shot 2014-11-11 at 12.59.43 AM

Yesterday

Brutal. The Grinch. Scrooge.

Friday was a mess as oil fell dramatically again. The Dow closed down 315 (-1.79%). Decembers usually have one big down move before the move higher, and to tell you the truth I was not expecting this much of a move.

TODAY

I am hoping that the end of the oil fall and S&P is done so that I can start making sense of things again, but as this is being written oil is down again. At 8:00pm eastern (Sunday) crude futures are are down -1.12 at 56.69, yet S&P futures are up 4.00. This is indicating a +30 points higher Dow open.

The S&P is likely going to follow oil, and it did open higher last Friday despite oil being down modestly. I think the super-sensitivity to oil might be nearing an end, except to the upside. If oil spikes up one day we could really fly high. Again, I was shocked by how much we fell Friday, but I suppose the capitalization had to occur. Some people want out before X-mas to enjoy their holiday when the Dow is at all time highs.

Things will get back to normal in a little while.

Continue reading

Option Trading Newsletter: December 12, 2014

Random Walk Trading.com

Friday

December 12, 2014

1-855-RWT-0008

Prepared by the good people at Random Walk, LLC.

VEGAS

Almost Sold Out

Great Morning !

Closing Prices From Yesterday

Today’s Number(s)

Screen Shot 2014-11-11 at 12.56.19 AM

Yesterday and Today

Screen Shot 2014-11-11 at 12.59.43 AM

Yesterday

A very strange day indeed. The Dow opened up about 70-90 points and just screamed higher. After that things really took off to the upside with the Dow climbing to a net positive of about 220, and the SPX up $30 points.

Late in the day oil began to fall and it took the market down with it. The graph I created below overlaps crude oil with the SPX cash. You can see that as oil sank it dragged the major indexes down with it. Oil fell below $60 for the first time, and yet the Dow managed to hold its head up for about 30 minutes. After oil continued to fall (showing no support) the Dow closed at its lows for the day.

I keep pointing this out….

One – Oil falling is NOT bad for the economy, but only for a few stocks such as Exxon.

Two – The rationalization the market is making for falling with oil is “deflation”. There has been a lot of concern about all the poorly allocated stimulus money not being sufficient to raise inflation. Inflation of 3% a year is a “Goldilocks” amount, yet we have been struggling to even hit 2%.

BUT one can not have things both ways. When oil was too high the government statistics analysts dismissed oil as being a non-factor in inflation. Now they want to attribute oil to inflation.

Three – The markets usually attach itself to something, almost anything popular. Regardless if it is a real event or not the stock market will take its cues from it. Sometimes it is currencies. Other times it is foreign markets, bonds, politics, etc. Oil will stop falling eventually and then bounce – taking the markets with it. After a couple of days of this the market will detach from oil and move onto the next stupid thing. This is just how it goes, regardless of what more learned people pontificate and Nobel prizes are given for.

TODAY

OIL BS STILL

What the oil market does, so will we. The good news is that the markets held up well and showed a positive day despite oil falling below $60. In overnight trading at midnight oil is still falling and has fallen to $58.80. Eminis were going along for the ride and were down $5.

BUT don’t read into it that much. Things change between midnight and the morning’s open. In addition we had a great Retail Sales number yesterday and some good numbers may come out at 8:30 and 9:55.

Not sure what will happen today, but if OIL shows even a modest gain we should run >100 points higher. If we do run higher keep an eye on 17,750 (Dow) and 2055 (SPX) as targets.

Continue reading

Option Trading Newsletter: December 11, 2014

Random Walk Trading.com

Thursday

December 11, 2014

1-855-RWT-0008

Prepared by the good people at Random Walk, LLC.

VEGAS

I bought 4 extra tickets to Cirque Du Soleil “O”. The first 2 couples or 4 singles enrolling in the class get them.

I don’t want to penalize those enrolling online for “at home” viewing, so anyone who has not taken advantage of the early enrollment price will get $100 off UNTIL THE TICKETS are given away.

Almost Sold Out

This class is going to be three days. During the Maui ’14 class (second session) the markets fell like a rock and people asked I stop teaching the material just to trade. We were told that this was the best day ever, and people wished they had a class of just this. They enjoyed hearing me think out loud as I walked through every trade.

That is why we are having this class. The third day is Q/A. Write your questions so we get an early warning and can prepare slides if necessary to explain the answer. Who would not want this?

Great Morning !

Closing Prices From Yesterday

Today’s Number(s)

Screen Shot 2014-11-11 at 12.56.19 AM

Yesterday and Today

Screen Shot 2014-11-11 at 12.59.43 AM

Yesterday

!No Mas!

The markets gave up yesterday on NOTHING. Oil falling $3 is not suppose to take the market down 268 Dow points. Yes, the fall of oil does hurt companies such as XOM, but it helps other companies such as United (UAL) inversely.

Why did we really fall? How do I know, I didn’t see it coming. Yes there currently is the mentality that falling oil prices are bad for the stock market, but there are times where it works the other way. Maybe people in commodities had to liquidate stock positions to meet margin calls? Maybe people were expecting the market to move higher because it is December and they all capitulated simultaneously?

It doesn’t matter.

Most every December the market sells off 2-5% in the first half of the month and then advances after, usually more than the selling. I thought we ended falling yesterday after the 220 point down open, but oil falling another $3 was more than people could stomach.

TODAY

I suppose we are held hostage to the whims of oil traders today. This stupid lockstep with oil prices will eventually end, and then people will be grateful. They will be grateful for lower gas prices and the ability to buy stocks a 17,500 (instead of 18,000).

If I had a gun pointed at my head to pick a market direction, I would say we are done with the 500 point sell-off (for now). I am thinking we are near a bottom and the next couple of weeks will look the opposite of the last two weeks.

BUBBLE

6-12 months

In the future, which is rapidly approaching, the bubble will pop. Only two things destroy a bull market – rising interest rates or a declining economy. And that is coming.

I am doubting it will be rising interest rates. The Fed has $4 trillion reasons not to want rates increase. I do think it will be a declining economy. Yes, the Dow is at all time highs but that is the only good thing happening. Four trillion in bond buying is equal to the stock market going up $4 trillion since QE started.

I am even seeing television commercials where a $180 product (coffee maker) is being sold in 12 equal payments of 14.95. This same thing happened in the mid-late 1920’s.

People must be maxed out on credit cards or they would just put the 180 on plastic.

People can not gt a home loan unless their credit is perfect, and even then they have to go through a body cavity search to get it. Low rates with no money being moved around is no advantage.

Unemployment is at 5.8% but only because people have given up on getting their $100k job back, and are now working at Starbucks and Costco to get insurance for their family.

Bottom Line

Obama doubled the deficit in the first 2 years in office. It was not until the government shutdown did the hemorrhaging slow to a gushing stomach wound. The Fed bought $4 trillion worth of bonds which did NOTHING but cause the stock market to rise by $4 trillion.

If the economy can’t get better with that much help, nothing will. This $13 trillion equates to 39,394 per person (over 100k per family) for everyone in this country. Had the government just given everyone $39,000 for every man, woman and child in this country I KNOW the economy would be cooking. Hell, families of 4 could have bought a home in some neighborhoods outright for that amount. That would have propped up the housing markets, given more disposable income, raised home values so municipalities could solve their economic problems, etc.


All we have is all of those shovel ready projects we heard so much about, and double the cost of our affordable health care. This is the end of times in the near future. This is a BUBBLE (in my opinion). But just because it is a bubble it doesn’t mean it can pop until too much air is in it.

So buy a coffee pot for $180 with 12 easy monthly payments, or save that $180 for puts that will make you a house when this thing finally collapses.

Overseas
It is happening already slowly in Venezuela, China, Greece, Spain, etc. Those countries are not popping yet (just hissing air) because the US sends its money (trade deficit) everywhere around the world, which helps prop things up (for now).

Continue reading

Option Trading Newsletter: December 10, 2014

Random Walk Trading.com

Screen Shot 2014-12-10 at 7.46.43 AM

Screen Shot 2014-12-10 at 7.48.16 AM

Great Morning !

Closing Prices From Yesterday

Screen Shot 2014-12-10 at 7.49.55 AM

Today’s Number(s)

Screen Shot 2014-12-10 at 7.50.51 AM

Screen Shot 2014-11-11 at 12.56.19 AM

Yesterday and Today

Screen Shot 2014-11-11 at 12.59.43 AM

Yesterday

A very interestingly fun day yesterday was. For two weeks I have been warning to not take the Christmas rally for granted as we usually have one decent sell-off before the move higher. Monday and yesterday added together was shaping up to be just that sell-off. The Dow opened at 17,629.57 which is about 380 points lower that we were last week.

How bad did it look yesterday?

Venezuela’s bond market was a mess with rates going above 21% on the 20 year bond. The 20 year bond has to close at $100 (if thee is not a default), and it was trading at $21.

Athens Greece – There stock market fell 12.8% yesterday alone. This was the largest drop since the US stock market crashed in 1987.

Russia – The Russian Vector Market Index (RSX) is down 40% this year.

China – The Chinese markets were down 5.8%

The range in some of the stocks we watch in POT were huge as well. Below are said numbers (notice the highlighted areas):

Screen Shot 2014-12-10 at 7.52.28 AM

TODAY

It looks as if we had our sell-off for December. POT students have been hearing for weeks the historical background of Decembers. With all of the bad news out there it is amazing that the Dow closed down only 50 and the E-minis were down only a couple points. So long as overseas markets don’t die, oil doesn’t fall below $60-$61, and the media stays ignorant about meaningless things the market likely saw its bottom. I suspect we are still on course for 18,000.

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Option Trading Newsletter: December 9, 2014

Random Walk Trading.com

Screen Shot 2014-12-01 at 7.43.06 AM

Tuesday

December 9, 2014

1-855-RWT-0008

Prepared by the good people at Random Walk, LLC.

Housekeeping

Some suggestions have been made to us and we implemented them. From now on all housekeeping items will be at the end of the update, right before the “WTF?” area.

Great Morning !

Closing Prices From Yesterday

Today’s Number(s)Screen Shot 2014-11-11 at 12.56.19 AM

Yesterday and Today

Screen Shot 2014-11-11 at 12.59.43 AM

Yesterday

18,000 is not meant to be this week. The market fell 150 points for a while but did manage to bounce a little and close down 106 points. The RSX (Russian Sector) fell 5.44%. TSLA was down 4.18%. In addition we saw the SNSS move up about 27% to 2.97 before falling back down.

Crude

Crude was the big one today making a new low. The previous low of 63.30ish area was a great support area for most of the day until it broke through almost another $1. If Oil keeps falling today I will most likely sell premium (for POT) near the $61 area.

TODAY

I have been saying for most of the month that Decembers usually have one down period in the middle of the month, a small bounce, and then a big run in the last few days. So far things are panning out as normal. I suspect we will get some more selling on the open today, and hopefully make the bottom today. The problem with history is that it never repeats itself exactly the same. We will see how things look after the numbers today.

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Option Trading Newsletter: December 8, 2014

Random Walk Trading.com

Screen Shot 2014-12-01 at 7.43.06 AM

Monday

December 8, 2014

1-855-RWT-0008

Prepared by the good people at Random Walk, LLC.

Great Morning !

Closing Prices From Yesterdaymu1

Today’s Number(s)mu2Screen Shot 2014-11-11 at 12.56.19 AM

Yesterday and Today

Important Reminder for POT:

The office is going back over the POT trades and updating the files, so when you go into the POT portion of our website you can click on any trade (trade #160 for example) and get the detailed history from beginning to end. How cool is that? You asked us to do this, so we are.Screen Shot 2014-11-11 at 12.59.43 AM

Yesterday

It was a quiet and strange day, yet the Dow managed to make yet another all-time closing price only 41 points from 18,000. We got within a couple of points of 18,000, but then the sellers came in. The chart below illustrates how Friday was just not the day the markets could have gone through 18,000.mu3

TODAY

With no economic numbers out today there may not be much impetuous to move. We will likely be above 18,000 at one time before the end of the year, but that may take some see-sawing back and forth.

Remember that historically the market has one mini-sell-off in December and advances strongly from Dec 26 to the end of the year.Screen Shot 2014-11-03 at 6.54.48 AM

Our biggest accomplishment on Friday was selling the long 2075-2080 / 2090-2095 unbalanced condor out at $3. Recall that we bought it for $0.40, but had we done nothing it would have expired worth $0.37. More in your update.Screen Shot 2014-11-03 at 6.55.48 AM

Contract the office at 1- 855 – RWT – 0008 for more details.Screen Shot 2014-11-03 at 6.57.28 AM

The great great news is that while Ferguson makes the headlines (along with NY), along with immigration reform and a government shutdown looming, NO ONE in the media is mentioning how America is asleep at the switch. No one seems to care that China has gained the #1 spot in the economy by lying, stealing, polluting and hacking. Another act of sensationalism and rating-whoring is exemplified by the major news outlets. Stop giving the protesters media attention and they will go away. This country is losing its focus.

mu4