I hate to enter new positions on a gap open. Fortunately today was not a gap an crap but more of a gap and consolidate.

Entering positions on a gap open is almost always the kiss of death. Gaps have a tendency to evaporate after the opening short covering ends and that leaves us with skinny premiums on the entry and inflated premiums on the close.

Fortunately today's market did not give back all its gains. Yes, it faded slightly into the close but held its gains at new highs. This kind of action in an over extended market is actually bullish to some extent because it shows there are buyers chasing stocks and suggests the dips will continue to be bought.

On our new positions CRM and FCX gapped open only to roll over and head back to negative territory. Both are still in safe territory but I question holding any stock that is not positive on a +75 point day. We will keep them one more day and then decide if we need to bail.

Check the new stop losses in the portfolio graphic.

Jim Brown



Current Portfolio




Current Position Changes


None


New Recommendations


None


New Long Term Recommendations


None - Waiting for a "real" market dip, not a one day wonder


Current Aggressive Recommendations


None


Prices Quoted in Newsletter

At Option Investor we have a long-standing policy prohibiting the editors and staff from actually trading the individual recommendations in order to conform to SEC rules concerning trades.

The prices quoted in the newsletter are the end of day prices in most cases.

When discussing fills or stops the prices quoted are the bid/ask at the time the entry trigger or exit stop is hit. This is NOT a price that someone on staff actually got using a live order.

For entry/exit points at the market open the prices quoted will be the opening print. The majority of the time the readers are able to get a better fill than the opening print because of market maker bias at the open.

For trades with an opening qualification the prices quoted will be the bid/ask at the time the qualification was met.

All of these rules normally produce worse prices than an active trader would normally get. Because they are standardized there may be some cases where a price quoted was better than an actual fill. If you received a price that was dramatically different than what was quoted please let us know.