Tuesday Update: Dow Plunges, Feds Probe Apple

(Tipping Point?)


Today's Market Selloff

Today's market selloff  has brought the Dow to within about 300 points of an Intermediate Term Sell Signal. Sounds far away, but with the market down 400 points as I write this, that trigger will be coming into view in the days (or hours)  ahead.  If it declines that far it will reverse the September 14, 2017 Buy Signal, which is up about 18% in about 4 months, translating into about a 1000% option gain, BUT ONLY IF WE HAD IGNORED THE TRIGGERING OF THE OCT 25th PROFIT STOP. This is compelling evidence that stops are a doubled-edged sword. Yes, they preserve profits and limit losses, but they also can miss extraordinary gains. The more I consider taking only 1/2 off when a stop is hit, the more I like the idea. That will be the rule for my own trading going forward, and a guideline for trade management in the published trade tables...If I can figure out how to accurately track the strategy. 

Gold Stop Hit

Speaking of which, the Gold (GLD) Mar $120 calls have hit their stop. I suggest selling at least half the position, locking in close to a 100% profit. 

PayPal for Yelp

We will be substituting PYPL for YELP in the Intermediate Term portfolio. Since PYPL is announcing earnings tomorrow (Wednesday), we will wait until after earnings to enter our first trade.