Option Investor
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WHEN YOU END UP WHERE YOU STARTED

HAVING TROUBLE PRINTING?
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Let's talk about dojis. I had a few emails from CPTI students recently about dojis so, what the hell, we'll take a look. As you know, I don't obsess over technical analysis, but dojis can be interesting. Dojis are one reason why I glance at candlestick charts instead of bar charts. The other reason? Prettier colors that remind me of Christmas.

OK. What is a doji? It's a one day pattern on a candlestick chart. Basically, it's when the day's opening price is the same (or almost the same) as the day's closing price. The buyers and the sellers each took their turn, but after the smoke cleared, the stock was right back where it started.

That's why jogging doesn't appeal to me. You run and run and run - and you end up exhausted, sweaty and right back where you started. Not very productive.

Does that kind of activity mean anything? If a stock is trending in one direction or the other. If it's moving up, that usually means there are more buyers than sellers, right? The daily candlesticks will be a real pretty green most of the time on the way up. On the day the chart shows the doji, it means that the number of buyers and sellers were about the same. The buyers, at least the doji day, were no longer in control. It can be viewed as a hint that the trend may be tiring, if not over.

Now let's look at the volume on the doji day. Most charts provided by brokerage firms and a lot of free internet charting software allow you to look at a one day chart, complete with volume. Looking at that will tell you when the buying took place - and the size of the volume. Also, you'll see the strength of the selling. On high volume doji days, it's likely that the counter trend direction will continue.

If the stock is still near its high on a low volume doji day, it can also mean that the run up may be over. Why? Because the buying may still be drying up. The price is being held up by fewer buyers and it may be only a matter of time. And, of course, the opposite may be true when the underlying is trending down.

Keep in mind that neither of these interpretations are true all of the time. Just keep an eye on the underlying. These are just clues, that's all. There are a lot more candlestick patterns that have a variety of interpretations. We'll look at those in the future.

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Market Still Churning
It's interesting to see the SPX keep bumping up against the 1311 level and bouncing back down. Either the buyers are going to give up in an overbought market - or it's going to run out of sellers and break out to the upside. Keep an eye on things. The next few weeks will be interesting.

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Seats Still Left For Newark CPTI Seminar
So, what would you rather do on April 29th & 30th? Would you rather mow your lawn and pull weeds? Or would you rather come to the 2-day advanced CPTI seminar and learn how to make enough money to pay SOMEONE ELSE to mow your lawn and pull your weeds for the rest of your life? Don't wait to make your reservation!! Contact me today!

As Monty Hall used to say, "Come on down." But, this is not Let's Make A Deal. This is your chance to learn strategies and hone your trading skills so that you can conservatively generate income in most any market.

See below for contact information. By the way, there are also still San Francisco (June 17/18) spots available.

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CPTI CURRENT APRIL POSITIONS
CPTI April Position #1 - RUT Iron Condor - 766.23
With the RUT trading at 732.45: We sold 10 April RUT 650 puts and bought 10 April RUT 640 puts for a net credit of $.50 ($500). Then we sold 10 April RUT 800 calls and bought 10 April RUT 810 calls for a credit of about $.45 ($450). Our total net credit and profit potential of $.95 ($950). Maximum profit range 650 to 800. Maintenance is $10,000 (IF you have the right broker).

CPTI April CPTI Position #2 - SPX Bull Put Spread - 1309.04
With the SPX trading at 1287.79, we put on one half of a possible Iron Condor. We sold 10 April SPX 1195 puts and bought 10 April SPX 1180 puts for a credit of $.60 ($600). Our credit and profit potential is $.60 ($600). We have an 82 point cushion. That's a good sleeping cushion. We'll wait on the bear call spread to see if the market is going to break out to the upside. Then we'll make a decision about what strikes to use for the bear call spread, if any.

CPTI April Position #3 - RUT Iron Condor - 766.23
On Friday, March 3rd, with the RUT trading at about 740, we put on our second RUT Iron Condor for April. We sold 12 April RUT 670 puts and bought 12 April RUT 660 puts for a credit of about $.55 ($660). Then we sold 12 April RUT 800 calls and bought 12 April RUT 810 calls for a credit of about $.55 ($660). Our total net credit and profit potential is $1.10 ($1,320). Our maximum profit range is 670 to 800 and our maintenance is $12,000.

CPTI April Position #3 (Formerly March Position) - SPX "Sure Thing" Credit Spread - 1309.04
We originally sold 2 February SPX 1275 calls and bought 2 February 1300 calls for a net credit of about $7.40 ($1,480). The initial maintenance requirement was $5,000. Our profit potential was $1,480. We reversed our position and put on four contracts of the 1280/1255 bull put spread. Our current adjusted profit potential is $1,460 with new maintenance of $35,000 ($2,500 x 14). Our current position is the 14 contracts of the April 1295/1270 bull put spread.

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CPTI CURRENT MAY POSITIONS
CPTI May Position #1 - RUT Iron Condor - 766.23
On 3/22, with the RUT trading from 733 to 745, we sold 15 May RUT 650 puts and bought 15 May 640 puts for a credit of $.55 ($825). Then, RUT moved up and we sold 15 May RUT 810 calls and bought 15 May RUT 820 calls for a credit of $.55 ($825). Total net credit and profit potential of $1.10 ($1,650). Maximum profit range is 650 to 810. Maintenance is $15,000 (IF you have the right broker).

CPTI May Position #2 - SPX Iron Condor - 1309.04
On 3/23, with the SPX trading from 1298 to 1304, we sold 12 May SPX 1225 puts and bought 12 May SPX 1210 puts for a credit of $.70 ($840). Then we sold 12 May SPX 1375 calls and bough 12 May SPX 1390 calls for a credit of $.75 ($900). Our total net credit is $1.45 ($1,740). Our maximum profit range is 1225 to 1375 - 150 points!! Maintenance is $18,000 (IF you have the right broker).

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ONGOING STRATEGIES
ZERO-PLUS Strategy -
A few years ago$, I outlined a strategy based on an initial investment of $100,000. $74,000 was spent on zero coupon bonds maturing in about seven years at a value of $100,000. The principal $100,000 investment is guaranteed. We're trading the remaining $26,000 to generate a "risk free" return on the original investment. We are not compounding our profits by dramatically increasing the number of contracts we trade. Just think of how well we would be doing if we had increased the number of contracts, even a little.

Our March SPX Iron Condor position expired worthless - according to plan. We can now officially add the $2,100 of premium to our cash stash - to take us well over the $40,000 mark. We have now generated $40,550 ($38,450 + $2,100).

Current Zero Plus Position: RUT Iron Condor - 766.23
When we put on the RUT Iron Condor as a CPTI position a few days ago (see May CPTI Position #1), we put on the same position for our Zero Plus Strategy, with one exception. Instead of 15 contracts, we put on 20 contracts. Our total net credit was $1.10 and our potential profit is $2,100.

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QQQ ITM Strangle - Closed Out Previous QQQ ITM Strangle Position
It originally cost us $14,600 to initiate the position. We collected, over the life of the trade, $5,950 in premium. We had $9,500 plus the $5,950 premium for a total of $15,450. Subtracting our initial cost of $14,600 leaves us with a profit of $850. It's not that much considering all the effort we put forth, but a profit is still a profit. Now, the funds that were tied up are free for use in a better opportunity. Our return on the $4,600 risk was about 18.5%.

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CPTI SPRING SEMINAR DATES:
APRIL 29 & 30 - NEWARK, NEW JERSEY
JUNE 17 & 18 - SAN FRANCISCO, CA

Our CPTI seminars are limited to ONLY 25 ATTENDEES. If you're a serious options trader and you want to learn the nuances of our advanced non-directional trading strategies and hone your trading skills, contact me ASAP at mparnos@optioninvestor.com. I'll send you all the pertinent information. The price is right - ONLY $995.00 -- less than the profit from one Iron Condor trade -- and you'll have a two-day experience that you'll remember, and profit from, for a lifetime.

The recent Las Vegas CPTI Seminar was sold out and a great success (no surprise, they all are). There are now 25 more enlightened minds, with smiles attached, ready to generate a healthy annual return using our CPTI strategies. Remember, if you attend one of my CPTI seminars, you are entitled to RETAKE the seminar a SECOND TIME at NO CHARGE!

37 OUT OF 40 PROFITABLE MONTHS!!
WANT TO ACHIEVE SUCCESS WITHOUT STRESS?
OF COURSE YOU DO!!
USE OUR CPTI WEALTH-BUILDING TECHNIQUES!

You should really try and make one of my seminars, if you can. With what you learn, you'll see a substantial increase in your trading results. Contact me at mparnos@optioninvestor.com. If you've already signed up, I'll see you there. If you haven't signed up, what are you waiting for?

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HAPPY TRADING!
Remember the CPTI credo: May our remote batteries and self-discipline last forever, but mierde happens. Be prepared! In trading, as in life, it's not the cards we're dealt. It's how we play them.
MIKE PARNOS, Your Options Therapist and CPTI Master Strategist

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Couch Potato Trading Institute Disclaimer
All results reported in this section are hypothetical. While the numbers represented here may have been achieved or beaten by our readers, we make no representation that any individual investor achieved these exact results. The tracking for the plays listed in this section uses closing prices for the day the newsletter is published and it is not meant to imply that any reader actually received those prices (though many often do) or participated in these recommendations (even though many do). The portfolio represented here is hypothetical and for investment education purposes only. It is only an illustration of what type of gains a knowledgeable trader might receive utilizing these strategies. If you don't get close to these results, guess what. It isn't the fault of the strategies.

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