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Strategies & Market Trends : Trade/Invest with Options Jerry a Point & Figure Chartist -- Ignore unavailable to you. Want to Upgrade?

To: Jerry Olson who wrote (4647)	12/21/2001 5:10:46 PM
From: milesofstyles	Read Replies (2) \| Respond to of 5893

happy holidays to... jerry, fred, susie, marsh, velo, jeff, mish, susan, smagli, boots, rich, marketeye, steelguy, capt morgan, samanthagal, smart money, kendall, besttrades, and anyone else i may have missed and met this year in the rooms and on the threads. best wishes to you and your families. milesov

To: Jerry Olson who wrote (4647)	12/22/2001 9:28:28 AM
From: Jerry Olson	Read Replies (1) \| Respond to of 5893

MERRY XMAS AND A HEALTHY AND HAPPY NEW YEARS TO EVERYONE HERE ON SI....WE HAVE A LOT TO BE THANKFUL FOR FOLKS... HERE'S MY LAST SUNDAY'S NEWSLETTER TO THE SUBSCRIBERS...I HOPE YOU'RE GEARING UP FOR THE NEXT 1-2 YEARS...YOU NEED A GAME PLAN RIGHT HERE, AND RIGHT NOW... $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ JERRY OLSON'S "POINT" OF VIEW NEWSLETTER DATED 16TH DEC 2001 "SOME CHINKS IN THE ARMOUR" Hello out there everyone... Shopping till you drop are ya??? huh?..gosh my wife has been at the damn malls forever...we are trying to do our fair share for this weak economy<VBG>...but this is ridiculous..hahahahahahaha It just doesn't seem the same to us this year though...we do want to wish all our cyberfriends/subscribers a very healthy and happy holiday season...this has been a solid year for us here at our home...I only wish you the very best for the coming New Year... I've been thinking about what is so important to us all...making the right decisions for our future...and of course MONEY rules our lives...either we're losing it or making it..all the time...<g>...I don't think I can remember a better "potential" set up for the future of the markets like I'm seeing right here...While there are a lot of bulls out there right now, any meaningful correction will wipe that smile off their faces<g>...mine? not really..why? I'm a realist..nothing goes straight up or down...I fully expect a nice pullback to more normal numbers on all indexes and stock charts... This is why I am continuing to tell you that dollar cost averaging into long term buy and hold positions will actually "smooth" the results out over time...Look it's your money folks...I am telling you it's important to get set up before the end of Dec, and into Jan/Feb/Mar to invest some portion of your capital...We could actually correct during those months, but it will not matter...keep some of your powder dry to buy any meaningful dip at any time...Remember this always!, WE WANT TO BUY DIPS/PULLBACKS, while we can not predict when they will happen, we should be able to "SEE" them before a lot of others that just have no clue... Let me give you an example...right now there are 3 short term indicators on P&F that have rolled over and down into a column of O's...the HI-LO index, and both the 10 & 30 week percents of stocks above those moving averages..have reversed back down now...Also, the NDX Bullish Percent has given a sell signal...The SOX Bullish Percent is overbought as well...what I see as "CHINKS IN THE ARMOUR"...this rally from the Sept lows was breathtaking...but all good things come to an end...A lot of solid companies last week announced layoffs and weaker guidance lying just ahead...we have not peaked out for the unemployed just yet, that's very obvious...6% should be easy...and also last week...we saw the DJBB(the P&F) bond index we follow reverse down and into a column of O"s giving a HIGH POLE warning...this is bearish...at the same time the TNX, this is the 10 year bond yield..we used to watch the 30 year TYX...it has moved off the bottom with a vengeance meaning higher interest rates are just ahead...another negative here folks... So what are we to do...Well we have our game plan...if you did not participate during the Nov 4th LEAP Call portfolio, then now is the time to do so...you do not have to buy all the options I listed there...take a portion of your total capital, and use it for some of those LEAPS...Set up your own stock/Leap option portfolio...and monitor it throughout the year month to month...I'll certainly help you...make sure you do NOT invest ALL your capital this month...use the next 3-4-5 months and average into these positions...There is NO rush to participate...when/if you feel comfortable then start small..look we are trying to help you recoup all those losses from 2 years ago..Rome was not built in a day...this will take time, planning and lots of very good TA-FA-DD and LUCK!!!! Let's again go over what a LEAP Options is...this is an option that's like all other options only it gives you a lot of TIME for the trade to work out..We have talked about the Jan 2003 LEAP Calls...if you buy an option this month and hold it all the way out till expiration next Jan...you'll be taxed at 20% long term capital gain..if you sell it before..it's a short term tax deal...Next, the entire idea of using LEAP Options is to use the LEVERAGE that options affords us all...here's an example.. CSCO, we'll use round numbers...say you wish to buy 1000 shares of CSCO the cost is of course $20,000 dollars...1 option contract equals 100 shares of stock...so if you chose to buy the Jan 2003 20 strike LEAP it will cost you $4.60..or $4600.00 for 10 contracts..this means you'll control 1000 shares of CSCO stock for 1 full year...Now please remember the number 20..that is our strike price...here's all the scenario's as we move forward with this example... if you hold all the way to expiration...and CSCO is below 20, you lose all your investment $4600.00, if CSCO is at 22, your option will be worth $2000.00 hence 2 points above the 20 strike price...if CSCO is at 30, your options would be worth $10,000...10 points above the strike... Right here and now...the price of $4.60 is ALL TIME PREMIUM...CSCO IS LESS THAN 20 RIGHT NOW..OK?..SO THERE'S SOMETHING CALLED "TIME PREMIUM" THAT WILL WORK FOR US AS LONG AS CSCO RALLIES WITH THE MARKET... Now what if CSCO runs up to 25 during the next 3-4 months...since you own the 20 strike this would mean your option is IN THE MONEY BY 5 POINTS..BUT SINCE WE STILL HAVE "TIME" ON OUR SIDE...THAT PRICE FOR THAT LEAP CALL MIGHT BE WORTH 3.00 BUCKS MORE...FOR A TOTAL OF $8.00...THE TIME PREMIUM ERODES OVER THE LIFE OF THIS OPTIONS...CLOSER TO THE EXPIRATION THE LESS TIME MONEY YOU'LL GET...YOU ALWAYS GET ANY AMOUNT ABOVE THE STRIKE... NOW ONE MORE THING...i do not want to confuse you..but there is ways to collect money on your LEAPs while your waiting...you can sell COVERED CALLS AGAINST YOUR LEAPS AND TAKE IN CASH EACH MONTH OR EVERY OTHER MONTH DEPENDS ON WHAT YOU THINK IS BEST FOR YOU... Let's say CSCO rallies up to 25...by Feb...you could sell the 25 strike of April let's say and take in $2 dollars in premium for your account...that's $2000 bucks, making your total cost for your LEAP a lot less...and if you can do this for 2-3 more times, you might work it down to ZERO cost... whats the downside???..well so far your sitting good since you own the 20 strike...the stock is at 25...you sold 10 contracts of the April 25's for 2 bucks and took in $2000.00...so what happens at expiration in April...if the stock is below 25 you keep the $2000 and can write those calls all over again...Let's say that CSCO runs up to 27 by April exp...and that April 25 call is now worth 2 bucks still..remember..the reason you got $2000 was because you sold these options in FEB, and that person that bought these calls, paid you that TIME Premium till April..hoping for CSCO to pop and run to 30 so he/she could make some good money too...well if the stock was at 27...you would have to BUY BACK THE VERY SAME OPTIONS YOU SOLD FOR THE SAME DOLLAR AMOUNT..IN ORDER TO "KEEP" YOUR LEAPS...NO BIG DEAL...AND THINK ABOUT THIS..YOUR JAN 2003 STRIKE 20'S ARE NOW WORTH A LOT MORE TO BOOT...there up another 2.00 as well... So all in all, as Tom Dorsey always says...there are "Options on Options"...I know it all sounds too good to be true..but guess what folks..it is TRUE...please study more about LEAP's and what they mean to anyone looking at using leverage like never before... Let's check all the indexes... DJIA---THIS INDEX TOPPED OUT AT 10,150 AREA AND HAS PULLED BACK TO 9750...9900 IS A 3 BOX REVERSAL BACK UP..9650 WOULD BE A SECOND SELL SIGNAL ON P&F, AND THAT WOULD BE A NEGATIVE TO ME...I USUALLY IGNORE THE FIRST SELL SIGNAL ON ANY INDEX OR STOCK CHART AS LONG AS WE'RE IN AN UPTREND... NAZ/COMPX---LIKE LAST WEEK NOTHING AS CHANGED..RAN RIGHT INTO HARD R AT THE BRL..1900 THE 3 BOX REVERSAL DOWN..WE'LL WATCH IT OVER THE NEXT 2 WEEKS... NDX---SAME AS ABOVE, HIT HEAVY R AT 1700 RIGHT AT THAT OLE' BRL LINE AGAIN...1550 IS THE 3 BOX REVERSAL BACK DOWN..THE NDX BULLISH PERCENT CHART GAVE A SELL SIGNAL LAST WEEK...THAT WOULD MEAN A NEGATIVE FOR THE QQQ'S... SOX---SAME CHART AS THE OTHER 2 ABOVE...THEY EVEN LOOK THE SAME...520 THE 3 BOX REVERSAL BACK DOWN...RIGHT TOWARD THE 40 EMA DAILY... SPX---GAVE 4 CONSECUTIVE BUY SIGNALS, AND NOW HAS GIVEN A SELL SIGNAL AT 1120...1140 3 BOX UP..MAYBE A LOWER TOP??? 1170 WAS THE HEAVY R AREA THERE...THE .38% FIBO RETRACE BACK DOWN IS 1088... OEX--HIT A DOUBLE TOP AT 595..AND SOLD OFF...580 3 BOX UP 545 THE BSL LINE.. THE VIX INDEX...I HAVE CONFLICTING NUMBERS ON THIS P&F CHART...ON THE DAILY CANDLE CHART I HAVE THE TOP OF LAST WEEK AT 27.88..PLEASE CHECK THIS OUT...28 IS VERY HEAVY R..WITH 29 A BIG TIME BREAKOUT..WHICH IS INVERSE TO THE MARKETS..MEANING WE WOULD BE MOVING LOWER... WHAT WITH 3 P&F INDICATORS IN O'S AND SOME OVERBOUGHT AREA'S THAT NEED TO CORRECT..I AM CAUTIOUS FOR NOW...LET'S CHECK OUR FAVORITE STOCKS... BRCM---THIS STOCK HAS MADE 2 CONSECUTIVE LOWER TOPS..I WOULD THINK 45 IS THE NEXT LOWER TOP TO SHORT...ON THE DAILY CANDLE CHART THERE'S A DEFINITE ROUNDED TOP THERE..ANY BREAK OF 41 THIS STOCK WILL PLUNGE...44 1/4 THE BUY TRIGGER LONG...42 1/4 THE SS(SHORT SALE TRIGGER)...IF IT BREAKS 41 STAY SHORT ALL THE WAY TO 35ISH... CCMP---WHAT A GREAT TRADER AND CHART...I LIKE EVERYTHING ABOUT THIS CHART, SECTOR AND ATTRIBUTES...79 3/4 THE BUY TRIGGER LONG 82 WOULD KEEP YOU LONG...77 1/2 A NICE SS TRIGGER... EBAY---MAN YA GOTTA LOVE THIS TRADER---VERY NEAR A SELL SIGNAL...SO 65 1/2 THE SS TRIGGER..YOU HOLD THAT SHORT AS IT WILL BREAK A DOUBLE BOTTOM ON P&F...TARGET 63..THE ORIGINAL BREAKOUT WE ALL TOOK LONG<G>..OH WOW I LOVE THE MARKETS..IT GIVETH AND TAKETH AWAY<vbg>...67 1/2 THE BUY TRIGGER LONG..WITH 70 THE 3 BOX REVERSAL BACK UP... ISSX---OK THIS IS A TRICKY ONE FOLKS...SOLID CHART TILL LAST WEEK...IN FACT THIS STOCK IS UP FROM 8 1/2!!!!!!!!..WHOA!..WISH I OWNED IT THERE<G>....ANYWAY...IT GAVE A SELL SIGNAL AT 30....31 3/4 THE BUY TRIGGER LONG...33 THE CHANGE IN TREND UP..HOLD ALL LONGS THERE...YOU SHOULD WAIT FOR 29 AS THE SS TRIGGER, TAKING OUT THE FRIDAYS LOWS...NO RUSH BE COOL... NVDA---THIS STOCK WILL NOT QUIT..IT HAD SOLID NEWS BY TSM ABOUT HEAVY XBOX CHIP DEMAND...SEE? I KNOW SOME FA!!! HAHAHAHAHAHA...66 3/4 THE BUY TRIGGER..64 1/2 THE SS TRIGGER... RFMD---THIS STOCK IS RIGHT ON THE CLIFF...TRADING BELOW THE 20&40& 200 EMAS DAILY...22 1/2 THE GOOD SS TRIGGER...QUICK TRIP TO 19 IS POSSIBLE...24 1/4 THE BUY TRIGGER LONG...26 3 BOX REVERSAL BACK UP HERE.. SEBL---STOCK HAS MOVED SIDEWAYS FOR WEEKS NOW...IT'S NOW OR NEVER...25 1/2 THE BUY TRIGGER LONG WITH ANY BREAK OF 26+ STAY LONG...23 1/2 THE SHORT SALE TRIGGER... SNDK---VERY NICE CHART SO FAR..JUST PULLED BACK HERE...17 1/2 THE BUY TRIGGER LONG....16 THE SS TRIGGER...15 IS THE P&F SELL SIGNAL STAY SHORT... NTAP---THIS STOCK IS AT THE TOP OF THE 10 WEEK TRADING BAND AND ON A HIGH POLE...20 1/4 THE SS TRIGGER..22 THE BUY TRIGGER LONG... TSM---STOCK IS OVERBOUGHT HERE ON GOOD NEWS... A LOT OF GOOD NEWS..ARE THEY DONE YET??? IS IT PRICED IN HERE?...IT'S RIGHT AT THE TOP OF THE CHART ON A HIGH POLE AND AT RESISTANCE...17 1/2 THE SS TRIGGER..PLACE A STOP AT 18 1/2 A SIT ON IT..THE SEMIS BP IS AT 78% ...19 1/2 IS THE BUY TRIGGER LONG..NOW THAT WOULD IMPRESS EVEN ME<VBG>...BIG BREAKOUT OF HEAVY R... VRSN---THIS STOCK IS ALL OVER THE PLACE BUT TRADABLE...JUST REVERSED DOWN HERE...40 1/4 THE SS TRIGGER...41 3/4 THE BUY TRIGGER LONG.. QCOM---FAILED TEST OF TOP AT 62...HAS ROLLED OVER AND DOWN GAVE A SELL SIGNAL LAST WEEK AT 56...54 1/2 THE GOOD SHORT SALE TRIGGER...56 3/4 THE GOOD BUY TRIGGER LONG... GNSS---POWERFUL STOCK CHART HERE..EXTRA BULLISH FOR SURE...THIS STOCK WAS 20 BUCKS AT THE LOWS...WHOA....70 3/4 THE BUY TRIGGER...68 1/4 THE SS TRIGGER... MYGN--BIG PULLBACK AFTER A BALLISTIC RUN UP...MAYBE ROLLING OVER HERE...53 1/2 THE SS TRIGGER, WITH ANY BREAK OF 52 YOU STAY SHORT...55 3/4 THE LONG TRIGGER WITH 56 STAY LONG<G>..THE 3 BOX REVERSAL BACK UP.. PDLI---BROKEDOWN & OUT OF A RISING WEDGE AT 35 AND FLEW DOWN TO 29 BREAKING THE BSL(BULLISH SUPPORT LINE) TOO..NEGATIVE..JUST REVERSED BACK UP 3 BOXES HERE AT 32...THERE IS HEAVY GAP RESISTANCE JUST ABOVE...33 1/4 THE BUY TRIGGER LONG...31 1/4 THE SS TRIGGER...ANY BREAK OF 28 LOOKOUT BELOW.. HGSI---HUGH BREAKDOWN ON THE CHART AT 43..WE SPOKE ABOUT THIS STOCK NOT PARTICIPATING IN THE BTK RALLY...BAD NEWS "WAS" COMING...THE CHART SAID SO...SEEMS OVER SOLD HERE...34 1/2 THE BUY TRIGGER LONG...35 3 BOX REVERSAL BACK UP YOU HOLD FOR A BIT THERE...MAYBE PLACE A BREAKEVEN STOP AND SEE IF IT RUNS HIGHER BEFORE WE SHORT IT AGAIN...32 1/4 THE VERY GOOD SS TRIGGER... IDPH---THIS WAS THE SECOND TRIPLE BOTTOM BREAKDOWN ON THIS CHART...WAIT FOR 69 FOR THE BUY TRIGGER IT'S A TRIPLE TOP BREAKOUT BUY SIGNAL<G>...66 1/2 THE SS TRIGGER...CRAZY CHART FOLKS... IMCL---SOLID CHART HERE..BUT LOOKS TO BE ROLLING OVER..IN FACT ALL THE BIO TECHS HAVE MOVED LOWER SINCE THE BTK INDEX GAVE THAT SELL SIGNAL...71 THE BUY TRIGGER LONG...MIGHT CATCH 2-3 POINTS THERE...69 THE SS TRIGGER...WITH ANY BREAK OF 66 YOU STAY SHORT... Ok thats it for now...I'll see everyone in the room tomorrow, bring all your a-mail friends in too..please convey to all your family & friends we are all trying to help one another to trade the markets for fun and profits..I know it's hard..but we can and will help anyone... with warmest holiday regards jerry Jerry Olson Master Class Trader jerry.olson@verizon.net www.buyitbuyitsellitsellit.com