ALERT---MY NEWSLETTER FROM A WEEK AGO---WE ARE FAR FROM OUT OF THE WOODS HERE FOLKS..THE NYSE IS A COMPLETELY DIFFERENT MARKET FOR MONTHS NOW, THAN THE OTC, AS THE TROOPS ALREADY KNEW THIS, OUR P&F READS USING THE INDICATORS TOLD US THIS A LONG TIME AGO...THE OTC IS DEAD MONEY..ALL INDICATORS SAY WE ARE GOING LOWER HERE..SO WATCH YOUR ASS & YOUR MONEY...
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JERRY OLSON'S
"POINT" OF VIEW NEWSLETTER
DATED FEB 24TH 2002
"BEWARE THE IDES OF MARCH"
Hello everyone, i hope all is well with you and yours...
Well what the heck's going on here?..I'll tell you<g>...It's called a correction of the excessive run up from the Sept lows...Where the hell did those market mavens think we were going to "Da Moon Again"?...<vbg>...I'll tell you one thing we sure enjoyed that ride..and now we are net short here all the way down from the Jan top...Remember that 1175 SPX double top that failed?..and the lower top area at 1164? and then, and then and now?...Yes lower tops, lower bottoms have sent this market and most of the indexs to a full 61.8% Fibo retrace...
Now during this correction, lo and behold the economy is starting to emerge from the recession that they denied for months on end...heck we saw it right?...But anyway, we ARE seeing signs of recovery, and thats a good thing. It looks like Alan G's rate cuts are starting to work now in earnest...All the while we are either working off inventories or writing them off<G>..either way it works for me<g>...More important to the whole scenario is the fact that after this quarter, i feel the markets will bottom, and actual orders will begin to flow...
So what's our game plan..Well for starters, anytime this coming month if you've written those cover calls CC's on your leaps and or stock holdings, i would either let them expire worthless or buy them back. But before you buy them back let's see if 1080 SPX holds thru the next 1-2 weeks or so..you may be able to just let those nice profitable calls die on the vine...Isn't that special<G>..Yeah it is..you sell those options to someone else, they pay you money and then you get to keep it and do it all over again...ok so it's not stealing<hahahahah> but it sure works for me....
Now for those of you that have held all your Jan 2003 leaps as I have, continue to buy more here...look at the pullbacks in all our stocks in that portfolio..I'll send out a new updated version either today or later this week...But i want you to switch to Jan 2004 Leap Calls..this is for investable dollars you are not going to touch...as for the Jan 2003's you can still buy them too but they will be treated as short term options, and taxed that way...the combo should be deadly...some short terms and longer terms...
Make absolutely sure which ever broker you're using allows writing covered calls on LEAPS..A MUST.. if not? switch brokers asap...You also must be able to write covered calls in your IRA's too...You may have to sign extra papers for that thru the broker...call them immediately...
Now on to some INTERESTING tidbits of info coming to me from friends around the globe in the semiconductor biz...guess what?..this quarter will suck big time..BUT, next quarter looks better, and guess what?, a lot better...ok well what do we do with this news?...we get ourselves set up for the long haul in the semis as soon as the Semiconductor Bullish Percent reverses up from below 30% the oversold side...And how will you participate in this coming rally? Well you can use the SMH the Holders trust, you can buy the big cap techs INTC--AMAT--KLAC etc, but you will own the 2004 LEAPS for damn sure...Now the calculation I want you to use is 25%...We buy options for a lot of reasons, but mostly "Options Give you Options"....25% is the number for the LEVERAGE we want to buy those leaps..The game plan is to wait to see if the SMH breaks 39 and heads to 33-35 area...if that happens you then will buy the Jan 2004 40 strike LEAP Calls the price should be 1/4th the cost of 1000 shares of stock in the SMH...so about $8.00 per contract...
Now if my information is correct, instead of a dollar cost average set up over a long period of time...i would prefer 2=3 buy in's over the next 1-2-3 months...Here's what i mean..at Market and Sector bottoms we want to take advantage of this selloff. While others are puking out there shares and crying "run for the hills" we are buying their shares smiling all the way to the bank...we buy low and sell high right?...Now if your going to use my example of options equivalents to shares, let's use 1000 shares of the SMH which equals 10 contracts of the options..meaning 1-option contract equals 100 shares of stock..if you trade 400 shares of stock most of the time, DO NOT BUY 10 CONTRACTS OF THE OPTIONS EVER...AND I MEAN ANY OPTION TRADE..JUST BUY 4 CONTRACTS THE SAME AS YOU WOULD FOR THE SHARES..JUST BECAUSE THEY COST LESS DOES NOT MEAN TO GO HOG WILD HERE...GOT THAT? I AM POUNDING THE TABLE ON THIS..NO EXCEPTIONS...ESPECIALLY THOSE OF YOU THAT DO NOT HAVE A CLUE ON OPTION TRADING...
So for those that normally buy 1000 shares of stock you would buy 10 contracts on the Jan 2004 40 strike of the SMH, just do it in either 1-2 or 3 buy-ins...not all at once...why? LET'S MAKE SURE WE ARE REALLY IN A RECOVERY, AND 2ND THAT MY INFORMATION IS CORRECT...I DOUBT WE GET HURT SHORT TERM..IF WE HAVE TO DUMP WE CAN FOR SURE...So that's the game plan going forward....Let's watch too see where this current down trend reverses back up from...and secondly how low we get and reverse up on those very important bullish percents of the semis, bio techs etc...BTW DO NOT SELL ANY OF YOUR JAN 2003 LEAPS...NONE...
LET'S LOOK AT ALL THE INDEX'S...
DJIA----THIS IS SHOWING THE MOST STRENGTH OF ALL THE INDEX'S. WHY? BECAUSE THE NYSE BULLISH PERCENT IS IN A COLUMN OF X'S AND HAS "NOT" REVERSED DOWN....IN FACT OTHER P&F INDICATORS FOR THIS INDEX ARE IN X;S AS WELL, SO VERY POSITIVE FOR THE NYSE STOCKS...RIGHT NOW THE INDEX IS IN A TRIANGLE ABOVE THE BSL SO THE POTENTIAL HERE IS FOR AN "UPSIDE" SURPRISE...THE BREAKOUT AREA IS 10,100...9700 IS VERY SOLID SUPPORT NEAR TERM...AND THE BSL LINE IS RIGHT THERE AT 9600 AS WELL...
THE NAZ/COMPX---THE WEAK SISTER HERE ALONG WITH THE NDX...LOOKS LIKE DEATH...LOWER TOPS AND BOTTOMS CASCADING DOWN...FROM THE 2100 TOP IN JAN, MY CALL WAS 1750-1700 THE DOWNSIDE TARGET, WELL WE HIT THAT NICELY...WE ARE ALSO AT THE BOTTOM OF THE 10 WEEK TRADING BAND I TALK ABOUT ALL THE TIME..SO A BIT OVERSOLD HERE...1760 THE 3 BOX REVERSAL UP...IT MUST NOT BREAK 1680 FOR NOW...
SOX----THIS INDEX IS TRYING TO HOLD UP HERE TOO...IT'S ACTUALLY BEEN RANGE BOUND FROM THE 600 TOP TO THE 500 BOTTOM FOR A LONG TIME NOW...BUT IT LOOKS WEAKER TO ME...480 THE DB(DOUBLE BOTTOM) SELL SIGNAL WITH 440/460 GOOD SOLID SUPPORT THERE..I THINK THOSE NUMBERS WOULD WASH OUT THE BULLISH PERCENT ON THE SEMIS...WHAT'S SO AMAZING HERE EVERYONE..IS THIS...THE SEMICONDUCTOR BULLISH PERCENT AS OF LATE DEC EARLY JAN WAS TOPPED OUT AT 75% AREA...IT'S NOW BELOW 30%...THE BIG TIME KEY FOR US ALL WILL BE THE REVERSAL BACK UP INTO A COL. OF X'S INTO BULL ALERT STATUS...WE'LL BUY THAT REVERSAL FOR DAMN SURE...THE BULLISH PERCENT REALLY ROCKS...
SPX----RIGHT NOW AS YOU ALL KNOW WE TRADE OFF THE SPX OR THE FUTURES...THE SPX BULLISH PERCENT(BP) IS IN O'S AND MOVING DOWN HERE...BUT WHAT ANOTHER NICE PICTURE WE SEE OFF THE SEPT LOWS TO THE JAN HIGHS...AMAZING POWERFUL MOVE UP TO THE TOP...NOW HERE'S THE BIG DIVERGENCE TO ME...WE HAVE ALMOST CORRECTED 61/8% FROM THAT TOP BUT THE SPX BP IS ONLY DOWN ABOUT 25% ON THIS MOVE DOWN...INTERESTING SITUATION...MAYBE IT'S UNDERLYING STRENGTH HERE???..THE KEY WILL BE THE BREAK OF 1070, THEN TO SEE IF 1050 HOLDS AND REVERSES BACK UP OVER THE NEXT WEEK OR SO...IF ALL THE PLANETS ALIGN THEMSELVES UP TOGETHER WE COULD GET ONE BIG SURPRISE RALLY HERE SOON...JUST THINKING OUT LOUD....<VBG>...HECK THE BOTTOM OF THE 10 WEEK TRADING BAND IS AT 1040...ONE MORE OBSERVATION, IF WE DO NOT BREAK 1050 WE MIGHT HAVE COMPLETED THIS PATTERN I'M LOOKING AT ON THE CHART..WATCHING WITH GREAT INTEREST...
NDX---PRETTY MUCH THE SAME AS THE NAZ...HIT MY TARGET AT 1350 LAST WEEK...THAT WAS A 61.8% RETRACE I TALKED ABOUT...THE BP OF THIS INDEX IS IN A TRIANGLE RIGHT NOW...40 IS GOOD, 26 IS NOT...WILL BE WATCHING HERE...1400 THE 3 BOX REV UP...
VXN---HELD 43--- 3 TIMES AND HAS RALLIED UP TO MY UPSIDE TARGET OF 50/51 AREA...52 A BREAK THERE VERY NEGATIVE FOR THE MARKETS...53 SOME HEAVY R THERE...GOSH 54 WOULD BREAK THIS INDEX OUT, AND BREAK THE MARKETS DOWN LARGE...NOW WE COULD GET A REVERSAL DOWN 3 BOXES TO 47 FIRST, THEN POP UP AND TAKE ALL THAT R OUT..ALL IN ALL A CONFLUENCE OF EVENTS ARE ABOUT TO PLAY OUT ON ALL INDEXES...
VIX---SHAPING UP AS WELL...IT'S FORMING A ROUNDED BOTTOM LOOK, AND THEY USUALLY BREAK UP AND OUT, WHICH IS NEGATIVE FOR THE MARKET TOO...28 THE DT BUY, 29 SOME R, TARGET WOULD BE 32...
SMH---IN A VERY PRECARIOUS POSITION HERE IT'S RIGHT AT 40...39 IS THE SERIOUS BREAKDOWN AREA...I WILL LEG INTO JAN LEAPS AT 35 THEN AT 33...AND CONTINUE TO ADD AS WE REVERSE BACK UP...
QQQ'S---THEY'VE BEEN A SHORT ALL RALLY TYPE STOCK...THIS HAS NOT REVERSED UP HERE FOR AWHILE...AND IT BROKE THRU THE BSL LINE TOO BOOT...LET'S SEE IF 33 HOLDS..
BBH---RAN UP AND INTO HEAVY R AT THE BRL--THE BEARISH RESISTANCE LINE ON P&F...THE DOWN TRENDLINE FOLKS...NOW MOVING LOWER TO SUPPORT AT 112...BUT--THE BP ON THE BIOS IS AT 30% HERE AND PROBABLY WILL MOVE LOWER...WE'LL WATCH AND WAIT FOR THE BULL ALERT REVERSAL UP...
BTK---TRYING TO BASE HERE NEEDS TO HOLD 460...THIS INDEX COULD HIT THE SEPT LOWS...WEAK SISTER...
OK LET'S CHECK OUT THE STOCKS ON OUR WATCH LIST...
AMAT---TOUGH NUT TO CRACK--BUT WE'LL SEE HUH?....41 1/2 THE SHORT SALE TRIGGER(SST) 39 1ST TARGET, THIS WOULD BE BREAKING DOWN OUT OF A RISING WEDGE TOO...43 3/4 THE BUY TRIGGER LONG(BTL)---
AFFX---GOSH THIS ONE CAN GO ANYWHERE...25 1/2 THE BTL---27 THE REVERSAL 3 BOXES UP...THIS WOULD FORM A TRIANGLE...23 1/4 THE SST...21 IS ANOTHER BIG BREAKDOWN THERE...
BRCM---THIS CHART LOOKS SICK...IT'S STILL SHORT ALL RALLIES HERE TILL IT CHANGES...34 1/4 THE BUY TRIGGER LONG...31 3/4 THE SST...BOTTOM HERE LOOKS LIKE 28...CHEAP THERE FOLKS..MAYBE<G>...
BRCD---THIS STOCK FELL OUTTA BED HERE...CHART LOOKS BAD...BROKE DOWN ON THE DAILY AND WEEKLY CHARTS...24 3/4 THE SST...21ISH THE TARGET---26.90 THE BTL---29 IS THE 3 BOX REVERSAL BACK UP..THINK IT'LL GET THERE??? NOT ME<G>...
CYMI---DOUBLE TOPPED AT 41, ROLLED OVER AND GAVE A SELL SIGNAL AT 37..THE 3 BOX REVERSAL BACK UP IS 39 A LOWER TOP...WATCHING IN EARNEST...34 3/4 THE SST---36 3/4 THE BTL--EASY HUH<VBG>...
CHKP---SURE IS BEATEN UP FOLKS...THE SOFTWARE BP IS AT 32% AND MOVING LOWER GOT THE TOTAL PICTURE HERE?..THEY ARE ALL MOVING LOWER...27 A SOLID SST THERE...29 3/4 THE BTL---WITH 31 THE 3 BOX REV UP...
DELL---COMING DOWN HERE INTO BUY TERRITORY...THE COMPUTER BP IS AT 34% UH HUH....22 3/4 A PRETTY SST THERE TAKE IT FOR SURE...24 3/4 THE BUY TRIGGER LONG NOT BAD EITHER...27 THE 3 BOX REV UP..
EBAY---LOOKS BAD HERE EVERYONE...LOWER TOPS AND BOTTOMS..JUST LIKE EVERY OTHER STOCK CHART I'M READING TODAY...50 3/4 IS A BIG TIME BREAKDOWN THERE TAKE THAT SST...53 1/2 THE BUY TRIGGER LONG TIGHT STOP THO...
EMLX---3 BOX REVERSAL UP LAST WEEK TO 37, IT DID NOT CLOSE THERE..LOOKS LIKE A HARAMI THERE OR INSIDE DAY TOO BOOT..IF WE MOVE LOWER MONDAY WE'LL SST THIS FOR SURE...34 THE SST...33 IS THE DOUBLE BOTTOM(DB) BREAK YOU STAY SHORT THERE...36 3/4 THE BUY TRIGGER LONG, AND IF IT TAKES OUT 28 STAY LONG...
GNSS---GGEE WHIZ--I KEEP CHECKING THE WEEKLY CHARTS ON ALL OUR STOCKS..THEY LOOK SCARY HERE FOLKS..A LOT OF THEM HAVE BROKEN SUPPORT..SO IT LOOKS LIKE LOWER WE GO BEFORE WE BOTTOM...HMMMMI THINK I SAID THAT ABOVE NO?<VBG>....THIS DARLING OF A STOCK IS NOW A DOG WITH FLEAS..HAHAHAHA...37 3/4 THE SST---A BEAUTY TOO...40 1/4 THE BTL TIGHT STOP THO...
GENZ---WELL IT IS TRYING TO BASE BUILD HERE A BIT...IT RAN UP AND INTO OVERHEAD R AT THE DT AREA AT 47..HERE'S THE NUMBERS....44 IS THE SST I'D WAIT FOR IT...TOUGH CALL ON THE BTL HERE...46 3/4 THE BTL..BUT 47 IS RIGHT THERE..TIGHT STOP, AND ONLY TAKE IT IF THE BIOS AND MARKETS ARE UP STRONG..
NVDA---ANOTHER DARLING TURNED SOUR....FULL ROUND TRIP TOO...SOME BOTTOMING ACTION RIGHT HERE FOR NOW...51 1/4 THE BTL---53 THE 3 BOX REV UP...THE STOCK DID BREAK THRU THE BSL LINE HERE...48 3/4 THE SST--WITH ANY BREAK OF 47 STAY SHORT..THAT AIN;T TOO GOOD...
IDPH---OK WELL THIS IS A REAL TESTER FOR ME<G>...HERE'S THE STORY EVERYONE...IT LOOKS LIKE IT BOTTOM AT 51 IN FEB A DOUBLE BOTTOM AREA...RALLIED UP RIGHT BELOW THE BRL LINE...AT 62...THEN ON ANOTHER RUN UP RECENTLY ON THAT FDA NEWS IT BROKE A TRIPLE TOP AT 63.."BUT" RAN RIGHT INTO THE BRL LINE HARD..NOW THATS A BRICK WALL<G>..THEN IT REVERSED DOWN 3 BOXES.. A NEGATIVE...THIS PARTICULAR PATTERN IS CALLED A TRIPLE TOP FAILURE PATTERN...HOWEVER--I WILL GIVE IT 1-2 DAYS MORE TO SEE IF BUYERS COME INTO THE BIOS AND THIS LEADER OF THAT GROUP...I HAVE BEEN SHORTING THIS ONE FOR A MONTH..TRIED IT LONG ON FRIDAY WITH LITTLE SUCCESS...SAME BUY TRIGGER LONG HERE AT 63 1/4 WATCH VOLUME SPIKES...60 3/4 THE SST...
QLGC---THIS ONE COMPLETELY BROKE DOWN LAST WEEK AT 42..OFF A SPREAD TRIPLE BOTTOM BREAK THERE...VERY WEAK CHART AND A SHORT ALL RALLY STOCK...(SARS)<G> TIRED OF TYPING IT..HE HE HE...39 3/4 THE SST...41 3/4 THE BTL---THIS STOCK BROKE THRU THE BSL LINE AS WELL...
QCOM---WHEW!!! A REAL DOG WITH FLEAS...HIGH ADX READING ON THE DAILY SO WE MAY GET A SHORT BOUNCE TO SHORT<G>...31 1/2 THE SST---33 3/4 THE BTL---
MYGN---SEEMS VERY OVERSOLD ON THE WEEKLY AND THE DAILY CHARTS...VERY LOW STOCHS...BUT VERY WEAK CHART TOO...IT'S NEARING PRETTY HISTORICAL LOWS HERE...SAY AT 25/26 OR SO..WATCHING FOR AN ENTRY...37 1/2 THE BTL...MIGHT CATCH 2-3 MORE ...35 THE SST...
GILD---STILL BUILDING AN ENORMOUS BASE..I THINK WHEN THE BP TURNS UP WE WILL OWN THIS LONG...67 3/4 THE BTL LONG...65 THE SST...
IBM---NEARING SOLID SUPPORT HERE...I LIKE THE WEEKLY IT HELD THE UP TREND LINE...99 1/2 THE BTL...97 1/4 THE SST....
MSFT---BROKE A TRIPLE BOTTOM LAST WEEK AT 58 NOT GOOD...AND THE CHART LOOKS WEAK...56 3/4 THE SST..STAY SHORT THERE LOOKING FOR 53ISH...59 THE BTL---61 THE 3 BOX REV UP...
I'LL BE WORKING ON OUR LEAP CALL PORTFOLIO OVER THE NEXT FEW DAYS..I CAN TELL YOU THAT MANY OF THE OLD STOCKS WILL BE THERE AGAIN..BECAUSE WITHOUT THE TOP NAMES WE ARE GOING NOWHERE...WE MAY HAVE A SECONDARY LEAP PORT WITH NYSE NAMES TOO FOR A CHANGE...AND YOU ALREADY UNDERSTAND THE WAY TO PLAY THOSE NICE DIVIDEND STOCKS RIGHT???
HERE'S ANOTHER EXAMPLE..RIGHT ON THE COVER OF BARRONS...WHICH SCARES ME<G> IS THE BIG "CAT"..CATERPILLAR...HAS A DIV OF 2.66%...FOR THIS EXP..YOU BUY 1000 SHARES OF CAT AT CURRENT LEVELS SAY $52,600...YOU HOLD FOR 1 YEAR AND GET 2.66% ON YOUR MONEY..HOWEVER...TO FURTHER YOUR "INVESTMENT" YOU SELL THE JAN 2003 OPTIONS STRIKE OF THE 55'S AND RAKE IN $5.00...OR $5000.00 BUCKS...YOU SOLD 10 CONTRACTS AS 1 CONTRACT IS WORTH 100 SHARES OF STOCK HERE..
NOW WHETS THE DEAL..THE IF'S AND'S OR BUTTS<g>
1...THE STOCK GOES ABOVE 55 BY JAN SAY IT'S 57....YOU GET TO KEEP YOUR $5000.00 BUCKS ON THAT COVERED CALL...AND THE OPTIONS BUYER PAYS YOU $55,000 FOR YOUR STOCK, YOU DO NOT GET ANY PRICE ABOVE 55.....YOU PAID $52.600, YOU MAKE ANOTHER $2400.00, AND YOU GET 2.66% IF YOIU HOLD IT FOR THE YEAR, A VERY NICE RETURN.....GEE WHIZ THIS IS COOL HUH? AH YOU FOLKS OUT THERE FIGURE YOUR RETURN ON INVESTABLE DOLLARS..HELLO?..WANNA LEAVE IT IN A BANK OR A CD??? YEAH RIGHT!!!
2...THE STOCK STAYS BELOW 55, YOU KEEP THE $5000.00 AND THE DIVIDEND, AND GET A SHOT TO WRITE THIS OPTION ALL OVER AGAIN FOR NEXT YEAR..WOO HOO...
3...THE STOCK FALLS BELOW YOUR BUY IN PRICE OF 52.600, YOU STILL KEEP ALL OF THE ABOVE AND YOUR DOWNSIDE PROTECTED FOR ABOUT 6 POINTS...YOU STILL OWN IT AND CAN STILL WRITE CC'S ON IT...
ALL IN ALL..ONE WHALE OF A WAY TO TAKE IN, AND RAKE IN CASH..RIGHT???...THESE ARE COVERED CALLS...GET THAT MONEY LAYING IN THE WEEDS TO WORK FOR YOU...SAVINGS ACCOUNTS AND CD'S SUCK BIG TIME...
OK I'M DONE FOR NOW...I HAVE A VERY BUSY WEEK THIS COMING TIME FRAME..SO I WILL NOT BE IN THE ROOM MUCH, BUT THERE ARE WONDERFUL SUCCESSFUL TRADERS THERE EVERYDAY..ALL I ASK IS THAT YOU GET IN THERE, POST ANY REAL TIME NEWS, AND USE THE MIC TO LET PEOPLE KNOW WHATS GOING ON OUT THERE...I'LL BE THERE WHEN I CAN...
WARMEST REGARDS TO YOUR FAMILIES
JERRY
PS..I SURPRESSED THE E-MAIL LIST FOR TODAY TO SEE WHO DOES NOT GET IT....PLEASE LET ME KNOW...
Jerry Olson
Master Class Trader
jerry.olson@verizon.net
www.buyitbuyitsellitsellit.com |
