Good Day Traders,
Overview & Highlights: I will host a “Final Hour” live trading webinar this Friday at 12:00 p.m. PDT. Several members have asked to observe my thought process for placing the Strategy III orders. A separate Webinar invitation will go out to all Premium Active Trend Traders.
Webinars: At Active Trend Trading we offer two webinars per week to provide training plus trade and market updates. See the schedule below for the next webinars.
How to Make Money Trading Stocks on Friday, Oct 14th
Register now for the next live webinar at the link below:
Register Here: https://attendee.gotowebinar.com/register/1406282346712848642
11:00 a.m. PDT
Next Training Webinar: Oct 12th
For Premium Members our Wednesday evening training is developing some fantastic traders!
Topic: Building a Strategic Plan—Pulling it all Together Part 2
Managing Existing Trades: Positions open for 1 strategies.
Strategy I Portfolio Building:
Strategy I Weekly Results Week ending 10/7:
NUGT: $0.00
Opened position in NUGT on 9/28 at 17.80
Target 1 = 10% — Closed ½ position at 19.78 or $495 profit
Target 2 = 15-20%
Stop Loss = Trailing Stop Set at Breakeven—Trailing stop hit and closed at 17.80
Strategy II Income Generation: No Open Position
For members wanting to better understand this Strategy there is a very good training video at: https://activetrendtrading.com/basic-option-strategy/
Strategy III Wealth & Income Generation Trades: Three Foundational Positions are in place to sell weekly options against. The recalculated weekly revenue needed from these foundational positions was forward in an update report earning last week. My objective with this Strategy is to collect enough weekly premium during the life of the LEAPS Strangle on both NUGT, SPY and TSLA to both pay for the capital invested and gain between 50% – 100%. Closed the first TSLA LEAPS Strangle which was opened on 9/28/15 for a 100% profit on 9/2/16.
The closed half of the TSLA position was replaced with January 2018 LEAPS. This is a very volatile vehicle but if we get the timing correct my lead to a gain of 100% at an accelerated pace over the next 16 months. Details on the new positions are below.
Strategy III Weekly Results Week ending 10/7:
SPY: Profit of $0.00
TSLA: Profit of $560.00
NUGT: Profit of $0.00
Trade 1: Foundation Position is 4 contracts of SPY Jan17 205C and 4 contracts of SPY Jan17 200P Current Trade—Currently Up 31%; Premium Collected since opening trade on 1/4/16 = $7,535
10/7 sold 4 contracts of SPY 14Oct 214P at 1.24; potential profit $496
Trade 2: (Long TSLA Jan17 250C & Long Jan17 220—Closed on 9/2 for 100% gain since 9/29) + New Positions Jan17 210C and 220P: Current Position Total Invested $14,900. Currently Up 82.08%: Premium Collected since opening trade on 9/28/15 = $15,688.50 + New Positions at $5,536.50 = Total Collected $21,225
Waiting for weekly set up
Trade 3: Long NUGT Jan18 18.4C + NUGT Jan18 18.4P. 4 contracts each side of the straddle for total investment of $6,720. The required weekly premium to collect each week to achieve a 100% return by Jan 2018 is $191.43 per week.
Sold 2 contracts of 14Oct 11.5P at 0.85; potential profit $170
Sold 2 contracts of 14Oct 12P at 1.15; potential profit $230
Tip for Experienced Option Traders: Occasionally after a weekly trade goes against me but the trend appears to be changing I will add one naked contract over and above my foundation position and close this out after it gains at least half of the premium I’ve collected. Doing naked options is not for everyone and I keep my risk small by only doing one contract above my covered limit. In other words, if I can sell 4 contract covered by my long leaps I’ll sell one additional. This helps hedge the losses a bit but it this tactic is not without risk and must maintain a tighter stop than I would normally use with the regular position.
Note: We do our best to get both text alerts and email alerts out in a timely manner, occasionally there will be trades that are missed because of delay in the Text or Email alert applications. Additionally, please double check with your broker to assure they allow spread trades like we do with Strategy III. Some do and some don’t.
Additionally, it is crucial when selling premium against the Long LEAPS position that the premium collected cover the weekly cost of holding the LEAPS plus an additional amount to over this amount as a gain. This is one of the reason I sell premium of weekly options that are close to be “At The Money”. I base my selling on the expected move during the next week. If one is not bringing enough weekly premium this trade will not work out as well and may wind up being a losing trade.
Several members have asked about this strategy and a more detailed explanation is available at: https://activetrendtrading.com/wealth-and-income-strategy/
I posted a video about how to choose the weekly options to short for this strategy. It can be viewed at: https://activetrendtrading.com/videos/
Additionally, some of these trade may be selling weekly puts on up trending stocks. If you are interested in parallel trading this strategy register at this link: http://forms.aweber.com/form/99/1278533099.htm
Potential Set Ups for this week: Keep your eye on this section of the weekend Trader’s Report and Market Updates later next week. I will be honing down to fewer choices but providing the charts with specific entry points and profit targets. My objective is to highlight 2-5 stocks per weekend for Strategy I consideration. Each of candidates will be analyzed in agreement with the training sessions we’ve provided over the past several months. This will begin the week of Oct 10th.
No hurry to jump into any trade on any Monday. Let the market settle in and use Monday to identify candidates and preferred trading levels.
I still like NUGT off of identifiable & established levels of support. This is a highly volatile ETF for gold miners. The ideal way to trade it is to know how much it usually runs after a bounce and then plan to take profits during the run not at absolute profit projections. Using this strategy should open the door to profits in the 10%-25% range within a very few days. So we will have to be quick.
Pre-Earnings Trade: The following candidates may provide some Pre-earnings opportunities: GRUB, FB, EDU, CHFC, BIIB, BABA
Upside: NFLX & potentially TSLA
Downside: LGIH
On the Radar: Stocks & ETFs that could go either way include: UPRO, SPXU, TQQQ, SQQQ, TNA, TZA & their associated non-leveraged Index ETFs.
Other candidates on the radar include: ACIA, BGS, PZZA, ULTA, TSLA, NUGT and NFLX
Stocks identified by ** that are close to a potential entry point.
Early Warning Alerts for Leveraged Index ETFs: Last Trigger: 9/14. Waiting new signal or secondary trigger.
EWA Account Return to date: 12.09%
The Early Warning Alert Service hit all eight major market trading points in 2015. See this brief update video for more details: Early Warning Alerts Update Video or at https://youtu.be/GJwXCL4Sjl4
If simplifying your life by trading along with us using the index ETF is of interest, you can get the full background video at: https://activetrendtrading.com/etf-early-warning-alerts-video/
General Market Observation: Some commentators highlighted last week as simply a market with no conviction. While this description has some validity, the Indexes are still moving enough to make good weekly profits within the support and resistance constraints. For several weeks the market has not provided any trigger to trade long or short except for short burst. This is where our Strategy III can help traders continue to generate income while waiting for this market to make up its mind on which direction to proceed. Next week could be exceptionally volatile with several Fed Regional President providing comments. This will be topped off with Janet Yellen comments on Friday. The scenario they used prior the last Fed meeting was to sound very hawkish which cause a drop in the market. This was followed up with more dovish comments which eased concern and led to a brief pop going into the September meeting. If this scenario is repeated, then the market could have a bit of a bounce moving towards the election which is week after the Fed. The next Fed meeting is during the first week in November.
Each of the 3 Tracking Indexes are working within its own track of support and resistance. The SPX is working with in a wide horizontal range as can be seen on the chart below. In addition, there is a down sloping trend line that connects the highs over the past eleven trading days. There is support that has been tested multiple time around the 1243 level. Both daily Momentum and RSI are flat-lined showing little directional preference. With that said price action has been moving freely between support and resistance 2165. If prices break above this level the next level of resistance would be at the 2179 level. This corresponds to a $2 range on the SPY which can be tradable if conditional orders are used and profit and stop losses are set prior to entry either an upside or downside trade.
The NDX shows it is still living above the main moving averages. It too is showing a small trading range between the 4842 and 4890 levels. This equates to a range a bit over $1 on the QQQ’s. RUT is finding support at the 50 day moving average. Ever since this Index made a new high on 9/22 prices have moved slightly down. Like the other Indexes the indicators for the RUT are mixed with the longer term weekly charts looking ready to fall more. The daily indicators are neutral to slightly negative.
Both the NDX and SPX may provide the best trading opportunities if one uses the intraday hourly charts to time entries! A trader doesn’t need to watch the intraday during market hours just make it part of your after-hour review and apply support and resistance lessons learned over the past few weeks.
SPX: Downside Market Short the SPY, SPY Puts or SPXU.
Preferred Long ETF’s: SPY, UPRO and SPXL
NDX: Downside Market Short the QQQ, QQQ Puts or SQQQ.
Preferred Long ETF’s: QQQ and TQQQ
RUT: Downside Market Short the IWM, IWM Puts or TZA.
Preferred Long ETF’s: IWM and TNA
The How to Make Money Trading Stock Show—Free Webinar every Friday at 11:00 a.m. PDT. This weekly live and recorded webinar helped traders find great stocks and ETF’s to trade with excellent timing and helped them stay out of the market during times of weakness.
How to Make Money Trading Stocks on Friday, Oct 14th
Register now for the next live webinar at the link below:
Register Here: https://attendee.gotowebinar.com/register/1406282346712848642
11:00 a.m. PDT
To get notifications of the newly recorded and posted How to Make Money Trading Stocks every week subscribe at the Market Tech Talk Channel: https://www.youtube.com/c/MarketTechTalk
– The Active Trend Trader Referral Affiliate Program is ready. For more information or to become an Affiliate please register here: https://activetrendtrading.com/affiliates-sign-up-and-login/
Index Returns YTD 2016
ATTS Returns for 2016 through Oct 7, 2016
Percent invested initial $100K account: Strategies I & II invested at 0.0%; Strategy III invested at 20%.
Current Strategy Performance YTD (Closed Trades)
Strategy I: Up $616.80 or +0.88%
Strategy II: Up $3187.00 or +3.18%
Strategy III: Up $25,6019.00
Cumulative YTD: 29.82%
Active Trend Trading’s Yearly Objectives:
– Yearly Return of 40%
– 60% Winning Trades
– Early Warning Alert Target Yearly Return = 15% or better
For a complete view of specific trades closed visit the website at: https://activetrendtrading.com/current-positions/
Updated first full week of each month. The next update after first week in October.
Outs & Ins: No stocks made debut on this week’s IBD 50. With earnings season approaching quickly there are several pre-earnings candidates that may result in a 5-10% gain between now and earnings.
Stocks that are currently pulling back or consolidating include: GRUB, FB, EDU, CHFC, ACIA, BGS, PZZA and ULTA.
Share Your Success: Many of you have sent me notes regarding the success you are having with the Active Trend Trading System. Please send your stories to me at dww@activetrendtrading.com or leave a post on the website. Thanks.
