Monday: No new trades. Potential repeat Sell for Citigroup (C) at the close. The MSFT calls bought July 3rd hit +100% on Friday and with all of July trades coming off the board on Friday, there is plenty of room in the active portfolio for new trading positions. All of the current and closed trades are posted in the table below. As I have noted before, my bad for delaying implementation of the new system one month, as not appearing in the table are stellar signals from April in AMZN (Buy @ 1434), TWTR (Buy @ 28.10), QQQ (Buy @ 161.30), PYPL (Buy @ 74.60), and NFLX (Buy @ 291.77, then repeat Buy @ 310.16). The Big Picture For the bigger roadmap of where we are I still like to use our trend-line based charts from the former trading system. The weekly DOW is still Short, and in a maddening sideways trend since early February. Maddening because no matter what your trading strategy, sideways trends are the most difficult to navigate. This one will end, and it will end badly...except for puts. For new subscribers: We don't trade my opinion here, we rely upon an algorithmic based system that makes our trading decisions for us. Nonetheless, I'm the boss and it's still fun to pontificate. Below is a "2-Day" chart of the Dow with a closer look zooming in on the past three months: If it looks to you like the Dow is running out of steam and about to turn down, I agree. The question is how far down will it fall? The closing low on March 30th is 23,644. A drop much below that level would open the door for a much steeper decline. Trends always go down faster than they go up, the perfect storm for the new trading strategy. We are on the cusp. TRADES TABLE These are all of the real time trades since implementing the new trading system. To review, we use an algorithm to identify primary trends and then monitor periodic counter-trends against that primary trend. Upon exhaustion of the counter-trend we enter option positions always in the direction of the primary trend. The shaded rows in the lower half of table are closed trades; the unshaded rows on top half are current active trades. Keep in mind that one of the characteristics that applies across the board to these trades is in the number of days it takes for the trades to unfold toward the higher returns. In some cases it's a matter of days, in other cases a matter of weeks and in rare cases a month or more. That sometimes equates to holding a position with no gain, or is underwater, for extended periods of time. This is a psychological hurdle for implementing the system, sometimes exasperating, but all of the time necessary. Stops are not used in the trades, but if it helps you stay with the system, use something very loose (70-75%) until your confidence is boosted by the other more immediately profitable trades. The alternative is to pocket smaller gains like +25% as soon as they occur, again to bolster confidence in future trades. You know yourself better than I do, so I leave those two tweaks to individual preference. Next Update: Who knows? (No later than Tuesday's Open) Allan
