LOW's Chart This Morning

If you want to look at charts that I am speaking about there is a free chart service on the web http://www.bigcharts.com/ . This is a great place to look at charts. Just type in the stock symbol and hit enter! Sorry I haven't figured out how to put charts into these blog posts yet. Techie I'm not.

So What Has Happened to LOW and ACOM?

As seems usual on thes breakaway gaps both LOW and ACOM (for the second time) yesterday made a little foray back up to areas where selling recommences. They went up a ways. I had planned to buy another put contract or two of each one if they went up significantly which would lessen the average price I paid for them overall. I did that with HUM and was well rewarded a couple of weeks ago. ACOM is already falling however this morning so have decided to wait and see if it tries to run back up before buying some more. LOW is also up but was falling back a few minutes ago so I will wait and see on it, too. So far these breakaway gaps have not been overcome and Steve Wirrick states that breakaway gaps are never filled so am proceeding on that basis. It sure worked for me on HUM as I was really biting my nails then. The stock climbed back up even back up into the breakaway space and I thought it was going all the way back up but it didn't. And when it turned back down it went down very nicely. I think given all the problems these breakaway gaps give one in the beginning it makes trying to milk it for all its worth on the way down a good idea. I sure got out too early on HUM. I sort of get the sense that people have to get used to the idea of the stock going down and when they finally do there isn't much resistance until they completely traverse the expected distance. Remember Wirrick said the distance the stock can be expected to go down/up is the same distance as the height/depth of its previous range whether it's a triangle or a rectangle. One thing also with a rectangle which he calls a "Cash In The Box" he says the longer they base the further they race, so the longer the rectangle the further a stock will go down/up once it breaks out of it. In fact I need to go back and check in his book, High Octane Trading, but I think the length of the rectangle determines how far the stock moves and is of equal distance down/up as the length of the rectangle.

A Day Gone Bye

A dear friend lost some of her nearest and dearest yesterday so this blog was silent, which it has been more often than not of late. Not because of nothing going on but because of so much going on that I have neglected to record. She lost three dear pets. Some might say that pets are of no significance. But judging by the profound ways that they touch some of our hearts and weave their way into the very core of our lives and beings I would have to disagree. Each of these mysteriously wonderful creatures is a unique creation, so unique in fact that there will never be another just the same. They are as unique as snowflakes are said to be...and far more complex. They seem to absolutely blossom in the presence of any human love shed on them. This loving part of them more than any other is proof that there is a God Who made them and that He is indeed love. The Bible says that God is love, and His creation and His humble creatures that share our lives at our feet, on our laps, in our arms are significant in that they point us to Him and utterly break our hearts when they leave us for it is a little piece of the Creator's care for us that goes with them. Is it any wonder that their absence leaves us so bereft?

High for LOW

OK. So I chased it a little. I bought the $26 LOW June put for $1.09. Hey, I did wait until the half hour before close this time. That is what my mentor Jon Wirrick taught me to do. That is not considered chasing. Now watch it go to 95 cents! It always does that to me. Oh well, that's trading.  It's hard not to let emotions interfere. The stock was at $25.48 so the option is now about 50 cents in the money or so. What fun! ACOM is also cooperating and seems to be heading back down.  Lets hope they keep on going.  I put a sell order in right away for the LOW puts at $5. So if they happen to zing up there it will go KA-CHING!

Chasing LOW!

Well, LOW has seemingly taken off. It's now about 35 minutes before market closing and the put option I was trying for has gone up to $1.01. Which is still not bad. I put my order in for 95 cents. We will see if it comes back to me. I try not to totally chase things but with a better than even chance to at least double my money I hate to let it get away. I may buy on close if it does not come back to me. It would be a strong bearish close if it keeps going down.

Why Am I Trading Stocks and Options?

What could be more ideal for an RVer? With portable internet access you can trade almost anywhere you are RVing. If done at a profit it will provide a more than adequate income. For instance if you have $100 to trade on options and can double it the first month (more than possible using options for instance read my previous post regarding LOW the 86 cent put could easily more than double in a month). You will have $200 to trade next month. If you can double your cash six times in one year you will have $6400 to trade with. Take out half to pay your taxes and to spend and that will leave you $3200 to trade next year. If you can double that cash just 4 times you will have $25,600. Reduce it by half for spending and taxes leaves $12,800 to trade with. Double that four times and you will have $102,400. Reduce it by half for spending and taxes and you will have $51,200 to trade with. Double that once in a year and that will afford you a really nice RVing income or income supplement. Of course the sky is the limit for profits and you only risked $100. Many online brokers like OptionsXpress.com will allow you to open a brokerage account with any amount of cash, even $100. The commission to trade 1 option contract is only $14.95. So if you were to trade my LOW $26 put option for 86 cents it would cost you $100.95 with the potential of more than doubling your cash (of course you can lose it, too! There is no profit without risk that I know of no matter what business you are in).

How LOW Can It Go?

Looking at a year chart of LOW reveals that recent previous support is clear down to $17.95 so I expect the stock to go down there again.  That could mean a gain from here of about $8 less any premium paid for the put option. I guess I will see if I can find a reasonably priced put.

I see the June $26 puts are about 86 cents with the spread of only 2 cents. So for a month of time it will cost me 86 cents to play. If the stock plumets to $18 profits would be about $7. But I think I stand a better than even chance of at least doubling my money on this put if the stock even drops to just $24 the put will more than double in price. The stock seems to be drifting higher right now midday so I will wait to pounce. The higher the stock rises the less the put will cost. I put my order in for the put at 65 cents, maybe the put will go down since the market is trying to go up right now. Might get it for less than 86 cents. Which would be fun!