|Weekly Newsletter 04/11/14|
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breakout events of the week and provides additional guidance that
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The NASDAQ continues to be hit harder than the other major indexes showing the largest loss for the week and also the largest loss year to date. The index is close to the February support level of 3968 and just below that is the 200 day moving average. These levels are psychologically significant to traders and may provide a measure of relief. Regardless of these levels, watch our market signals and stay on the sidelines until they turn up. The signals turned down on March 31 which should have saved you two weeks of grief. Stay calm now until they turn positive again.
|Weekly Breakout Report|
Best performer for the week was QID (ProShares UltraShort SmallCap600). This is an ETF that allows you to go long while benefiting from short sales made by the ETF. Other opportunities to go long were restricted to CwH stocks and once again those that were in a squeeze were among the most profitable.
|New Features this Week||Additional Value that we added this week|
No new features this week.
|This Week's Top Tip||Tips for getting the most out of our site|
Squeeze Breakout Directional Options Trading
A subscriber sent me the following explanation of how he is making outrageous profits by options trading from the CwH list....
I wanted to share with you an example of the kind of option trades I am doing using your CWH Watchlist-with the new Squeeze Filter. The best trades are those where I buy an ITM (in the money) Call option at the closest strike price to the BOP (and still be ITM).
I only take trades if the Squeeze = "Y".
I buy the closest expiration unless there are less than 7 days left-in which case I go to the next month. Finally, I am looking for adequate option volume at the strike price near BOP and decent bid-ask spreads.
Here's a real example:
CWH Alert: 3/26/14 at 7:47 AM (Mountain time) (This is when I got it on my cell phone)
Option traded: MAR(2014) 192.50 CALL
Purchased at: $2.25
Sold 3/28 at: $5.80
Gain%: 257% in 2 days
This is a good trade - meaning not all of them do this well - however, it isn't the best one either. Let me know if you get any questions on these kind of directional trades.
While JIm is referring to squeeze breakouts from the cup-with-handle list, the strategy can also be applied to the Squeeze Play list.
If you would like to know more about Jim's strategy, post your question to the support forum and let the conversation begin.
|Market Summary||Overview of market direction and industry rotation|
|Top Breakout Choices||Stocks on our Cup-and-Handle list with best expected gain if they breakout|
|Top Second Chances||Stocks that broke out this week and are still in buyable range|
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