Can You Be a Trader in a Trend? | Technically Speaking: Trading the Trend
[Music] [Music] thank you hello and welcome to Tech police speaking on trading the trend weeks to months my name is James Boyd we welcome you here to thousand Point Thursday as the Dow surged off weakening CPI data now it's a data point and uh but the market liked not seeing an escalation in that CPI staying as high or higher maybe leading to the Lesser chance of the FED not having to be as hawkish and maybe throw us a bone for Christmas if you will maybe we won't get 75 basis points maybe it'll actually say hey Merry Christmas to all of us you're only going to actually have to pay 50. so yeah anyway pretty interesting here we'll take a look at that remember when we discuss uh examples here today uh we're gonna actually use it for educational informational purposes only not investment advice recommendation many security strategy or account type options are not suitable for all investors so some investors uh like I have a son who has learning disabilities he shouldn't do options he doesn't understand rights and obligations in terms of a financial sense Okay so not everyone should do options we'll talk about options talk about stocks and then you decide for yourself what you might consider for yourself uh now also remember the Futures and Forex involve speculation not suitable for all investors also remember when we talk about demonstrating the function of the platform we will use actual symbols and also when we actually discuss uh the paid money platform which is for educational purposes only just because I absolutely or the investor says they killed it that month in paper money does that translate to real money well not necessarily because the market conditions are changing constantly right and also remember when we talk about uh the use of options we'll take a look at the option Greeks as well now just real quick as we're getting started one thing I kind of want to make mention of is here we will take actually look at the marketing sectors just briefly five minutes or less that's part of our routine second thing we're actually going to talk about is management of existing positions and then rolling positions okay which I think is kind of important right now especially with some of the moves we've actually had and that would actually be on some past trades okay in terms of managing those and then seeing is there an opportunity to roll the positions in other words exit and set up a new position in the same ticker third we're going to actually talk I've had a question from Owen regarding different types of Trends and strategies and then fourth we're going to talk about some new applications so with no further Ado let's actually go in and hop right in so first off this is the data and I would like you to kind of tell me what you see now I'm not going to say the Dow has been Maybe uh well the Dow has been where the relative strength has been the Dows has stayed above the 10 period moving average the blue line the Dow actually today did make a higher high okay so the trend of the Dow has been still quite strong larger caps have really been a focus by many investors now the SPX which we were a little at least kind of our examples we kind of talked about how it had made a like a lower high relative to where it was before let me zoom in so we had a high fell back down ran back up lower higher than where it was kind of fell back down that was yesterday well today's news on the CPI doink and you're actually seeing that really this is giving a lift there's some of these uh sectors in the s p so here's the deal I don't think anyone probably here probably just wants the market to go straight down like an anvil no probably not so when if someone has a hedge or if someone maybe has a neutral strategy and and maybe the market goes up I think more investors probably than not are more kind of tilted bullets so this is kind of like pushing back up the bullish positions and maybe the hedges or things like that they might be well down but the overall portfolio is still overall bullish so that's why we try to set up the portfolio the way we do overall it's still net bullish now the one that actually kind of tell me what you see on this one NASDAQ tell me what you see on this one is this the same or is this maybe something of potential interest well you know it now remember I did not draw this line today that diagonal line actually coming down we've actually had that line there for a bit and today if we actually said hey what is a potential interest NASDAQ getting above the diagonal resistance line that's unusual hadn't seen that before okay so some of these NASDAQ stocks that have been really pushed down aggressively all year long some of them trampolining back up okay that'll work trampolining it is now but it it well they exploded okay especially the ones some of them went down quite a bit then the last time you actually saw the NASDAQ go up 6.25 this is not a stock this is not a sector this is the Blasted index so when people say you know indexes can't really move well that's not necessarily true but I tell you what you don't typically see an index go up six percent a day now last two last things uh we actually were watching actually the the vix yesterday kind of looking to see if it could actually get above the 10 period moving average and boy it faded back down here today with the move that's welcomed if you're a bullish investor and the last but not least when we actually look at this the rates did actually drop I remember we about two weeks ago we actually talked about three significant Tailwinds number one is volatility going down number two we actually talked about rates maybe just even neutralizing okay and the third thing we actually talk about is the almighty US dollar no disrespect to the Australian dollar or Canadian dollar but that US dollar has been almighty this year so the biggest actually thing is if we actually get those to all go down or at least kind of somewhat stay down that could actually be a Tailwind for stocks to maybe try to come back up a little bit now let's kind of take a look at something and I want to kind of actually pull up let's say just briefly the sectors and I'm just going to Fast Fire a couple and and I'm not going to really speak to them deeply but I want to kind of just take a look at ixm I know we talk about the financials a little bit that actually had a decent little push here today A little bit could almost take it uh like a yardstick and measure the the candle there okay uh ixb I know some of you have been watching basic materials kind of looked like it continued there even utilities actually jumped in okay you're going to see that that stock need which we'll actually look at in just a sec that actually had a crossover on the sector had a pretty good push here today and the last but not least some of you have been also looking at let's say industrial stocks what's also continued here the upside the notable lags is energy is kind of software softer a little bit Staples a little they're not down Staples not down Healthcare is not down they're just not up in the magnitude of the other ones are now what that actually said what I want to do is whenever we actually have these big moves I always start to think about let's say strategies like verticals or short puts now what I'm not going to do here is I'm not going to take five minutes on each one what I'm doing is whenever we have big moves like this I'm thinking might there be a chance to harvest any of the gains on verticals secured plugs because you can only make so much right so what I'm going to do first is I'm going to look at the verticals and if I look down here that's 99 percent and that Goldman Sachs is in financials and not only has eight days remaining when I look at let's say something like Matt has a couple positions one of those is about 50 percent the other one's about 42. we'll look at that when I look at something like Merck it's only uh down 2.43 Netflix up 23 20 excuse me 29 that has actually 36 Days remaining so I'm not going to actually touch the Netflix that still is kind of cooking in the oven but the one that I least want to talk about first is Goldman Sachs this one is is toasted okay the short option has five cents the long put has three and a half cents net of that Penny and a half really can't make that much more the investor what they could do is they could actually say James could I roll this and and we it could be for commission less if it's five cents or less on the short option okay now if we actually take a look at this what we could actually do is we're going to close down both sides right click we're going to create the closing order we're going to buy it back notice we're buying it back for for a penny or trying to we'll see if it actually fills now if I actually look at this there it is buying a backward Penny that's the mid price okay we're trying to harvest that 837 dollars there and now what I'm going to do is going to go back to like say uh confirm and send there's the commission too that way I thought was a dollar we got three contracts I thought it was actually a dollar Thirty per contract for the vertical well you got three contracts total 690 send now if we actually go back and say uh Goldman Sachs is this something that the investor might consider re-applying not changing ticker symbols reapplying like going back in and saying look I think the stock technically good good might continue to go up and I just kind of want to re-put on a trade that has a higher maximum gain than a penny well let's take a look at this if the investor said James I think there's more upside on that let's actually go back to the trade tab we're going to try to do what uh Bill kind of talks about rinse and repeat a little bit we're going to go look to maybe look kind of maybe about those uh 12 strikes going to go down to the December expiration which has 36 Days we're taking the exact same criteria we did with the other one okay now if we kind of choose something in between that Delta 30 40 it's going to be the 365. if
we chose like a five dollar wide spread if we wanted to we'll be looking at the 365 buying the 360. right click sell go right back to Vertical come back up 365 360.47 credit and we know that maximum risk there given a vertical potential is 353. now again if we're if we're talking
about risking okay let's say we're going to risk fifteen hundred dollars we're probably talking about four contracts okay so if we did four contracts fourteen hundred dollars for potential Max loss given the vertical and that cost of the trade is 520. so how long does it really take the roll of position not very long especially if you don't have to talk about it credit has been updated that's been updated we see the buying power effect is really what the potential Max loss is gonna send the order so that's kind of just kind of monitoring the trend but it's also monitoring the profit and loss but the biggest actually thing in there is you know uh just kind of putting it back on okay if someone actually thinks the upside is still there I'm not going to talk about MetLife because when I look at this that option when we look at the short option it's 40 or so it's 43. like to maybe see that at least above 50. so we're going to pass on that I'm going to go down to the short puts okay let's start with knee now does anybody like utility socks at all anybody while knee has been one that we've been watching a little bit let's just double check this and see if we might have an opportunity to roll now what is going to give us the idea that we might be able to roll well sold five contracts that's the obligation to buy the stock from now to expiration or the time we put it on until expiration upfront premium 320 330. current premium
right now is 1.20 and what you're going to see is it's a 63 up a thousand dollars so so far we haven't had to buy the stock we've just sold the put option for 330. It's now at a dollar twenty we might say could we buy that back now remember it's kind of like the law of diminishing returns that 120 could only drop down to zero so there's a ceiling so to say on how much the investor could really make 63 percent when you have 36 days left the investor if they go back to the chart and look at this and say James can we roll the option Maybe not roll out farther in time but can we roll up in strike okay so what's the strike that you have now well the strike that we actually have now is a 77 and a half put all right so we don't need to go out further in time there's still time here but if we go look at the 77.5 foot where's the
77 and a half 77 and a half survey says is going to be right about right there could we maybe try to go to the 80 and try to start with a little bit higher premium and that 80 kind of might be where we think now whatever strike you sell that's where the investor is thinking the stock could actually stay above so what we're going to do is we're going to buy the lower strike back and then try to sell the Higher One now whenever we actually sell puts we might not get the opportunity to buy the stock so we're just going to have to be okay with taking a thousand fifty that trade was actually placed uh nine days ago five contracts total amount of I mean if we talked about what would the stock position be about 37 000 if we had to buy the shares didn't have to all we're going to do is right click on that line create a rolling order and then what we're going to do is going to sell that now it's going to say that we're doing a calendar we're not really okay we're not really doing a calendar okay we're just buying back the option that we're in and then just saying look we're going to sell a new one okay things are doing a calendar we're not buying that back okay check that's the December December good now right here on the top line which one does the investor want to sell well let's say the investor wants to sell the 16 December go the same month why are we staying in the same month because they're still 36 days left we don't need to go farther on time could we yes do we have to no and then we're actually just going to go up and strike sale 80s let's just double check if we can roll for a credit and what do you know we can roll for a credit so we're gonna try to sack the investor might say I might want to try to grab that okay now here's the deal if we don't take the profit we kind of just well maybe we just kind of like seeing that on our monitor tab we haven't made anything until we exit so if the investor says I realize that I want to take that off the table given that 62 with 36 days left they might just go confirm and send and then send the order done okay so that's actually when you have big moves like this how many of you trade in or invest in verticals okay that would actually be something that you would probably be thinking about you know what I probably want to do that the last one that I also want to speak of in terms of well three more but I'm gonna do them fast is this one now how many of you have ever had second thoughts about maybe buying the stock and you said you know what James I I changed my mind now I have never done this at least this week good I'm glad you listened so pxd sold that option for 6 30 it's at 10.75. we actually go back to the charts pxd we have to now evaluate do we wanna for example all have a greater chance of owning these shares elsewhere inside 10 days to expiration we pull up pxd here's what the chart looks like now that chart doesn't doesn't look bullish to you or not that bullish now when someone says I want to buy the stock typically they're wanting a stock that is still above support but if that stock is really below the support they might say I I don't want the shares and I want to really kind of rip up that contract of having to buy the shares well that doesn't always mean it's for a profit especially if the stock has gone down quite a bit we can try to actually get out see if we can sold it for 6 30 it's at 10.90. if we buy it back we're saying look I'm willing to give 460 dollars so I don't have to outlay 25 500 in stock get it okay take a 460 loss realize it versus buying 25 000 worth of stock um let's weigh that okay we'll take the loss 460. create a closing order just buying that back now James wonder if this was a stock that was still above support though well the and the investment had the capital by the shares well they might say in that case hey I'll just go ahead and actually buy the shares okay now if we actually buy this back plus one 1090 this is gonna be for a loss that loss is gonna be about 450 50 now will says something that I've got to want to push uh kind of mention here he says it looks like a reverse Head and Shoulders what the investor second option can be can they roll this out in time and could they maybe just you know Kick the Can down the road is what I say yes you can just sell another one next month but it doesn't mean it's going to be for profit because when we roll it it does realize this loss just because it's not on your screen anymore the investor screen doesn't mean that the investor didn't take the loss if you buy it back and sell another one you did realize the loss we're going to buy it back we're not going to roll and now what you're going to see is there it is buying it back higher than what we sold it for loss plus 65 cents at insult injury and now gonna click on send guys and gals that's real right sometimes it happens sometimes that Trend doesn't go in our Direction okay and the thing is is when we actually do this if it gets further and further in the money if it gets closer and closer and closer to expiration it can be harder to get out of as the open enter shrinks okay all right now let's kind of talk about some new examples okay now are there any questions okay well so one of the actually things I want to kind of bring out here is when we actually take a look at first off uh I'm gonna bring up a stock and I'm going to bring up Apple okay now Apple we actually did a bearish synthetic yesterday on Apple and apple was actually right down near the support area they've had all kinds of problems right they got you know China has no coveted policy or at least that's as expressive it is they've had issues with actually kind of supplying things uh wait times things like that if you buy the stuff can you get it in the store whatever okay today it gets a push to the upside now when we actually go back so here here's kind of the tough thing about Trend right can you still be in a downward trend but then have like a counter-trend rally back to the upside well sure that's what we've been doing on the SBX the SPX has been in a counter-train upward move in an intermediate to longer term downtrend but these moves to the upside can can be quite well they could be a lot especially if they have these big swings or this swing right here this is not small this is 20 points okay now let's go to the trade just real quick and what I'm going to do is I'm going to take a look at the position now what you're going to notice is we have this short call vertical okay so there's the short call vertical okay now remember this was we call this a short synthetic and I'll just speak to this quickly but it's worth mentioning so first thing what we notice is on a short call vertical we have sold the 140 we bought the 150. okay and what you're going to notice is well the short call is bearish long call bullish that position on the short call is down 236.
the damaging side of the trade is the one that you paid more for it and the one that actually has negative time Decay boo okay now option number one is could we just take that down if we actually take that down and realize that 360 lost what we could do is try to actually maybe just sell that so we don't lose the remaining 279 and I think that's a viable option if the investor actually does that they're really saying look I think you know the markets might get a lift here and if someone has a long put on it on a stock where we have a thousand Point move on the NASDAQ and the NASDAQ breaks out to the upside which of these trades is more directional it's the long put both have a built-in maximum loss so what I'm going to show which might kind of surprise you a little bit is we're going to sell this okay we're going to right click on that we're gonna we're gonna sell the put and that foot right there was bought for 640 it's going to sell this to uh it's going to sell it for 279 and try to and we're going to actually say uh we're gonna exit that takes a loss how much is the loss loss is 3.60 okay now if the stock was bouncing off support no I don't because they we we position size this Lisa for the maximum loss which is kind of like having a well a wall right now if you take actually look at this what you're going to notice is it's going to realize about a 360 loss now on the account side it's not going to really mean a lot we're going to say send it now if we're bouncing off support what might the investor consider if we're kind of getting a counter Trend rally where the market or where the market is helping Apple bounce back up well why not just maybe try to come in and see if we can't get a little counter Trend rally why not why can't the investor say you know what I'm going to sell the 140. thinking we might try to get a little bit of a bounce in the shorter term and just say I'm going to sell the put now sometimes that happens you get these counter Trend rallies and instead of the investor becoming super bullish they say look I just think that maybe the the stock might try to stay above 140 it's just situation you know kind of what that situation is and what it's actually doing is dragging up some of these stocks that were beaten down we get it but what could the investor do we're just going to sell one put 420 confirm and send there's the commission and if that's okay gonna send it so what it did what this what we really did is we we altered that the position was actually negative Delta before we sold the put which actually increases the Delta and we actually said you know what maybe in the shorter term there is a little relief rally can this short put well not that can this short put right there can we actually kind of make some of that money back that we lost on that stock bouncing back up the nice thing about the short puts is they can be a little bit more forgiving okay at least initially okay so we're gonna now what are you gonna do with that short call vertical we're going to hold that we know there's a backstop on the given the vertical of a Max loss built in that is a more forgiving trade than a long put vertical which actually had more Capital invested okay so that's actually my comments on Apple that's kind of like a little trading mentality there if you actually see maybe this stock maybe come up to let's say 150 155 maybe that's actually where that short-term high is keep an eye on it but at least in the short term if that stock does bounce and the NASDAQ continues to go up might we actually see that maybe Apple tries to go up with the NASDAQ which wouldn't be very surprising today's move on the NASDAQ was more of a material move if it can hold there now I'm going to bring up also the position on Nvidia we did a position on Nvidia the other day I'm not going to actually do that we already have that example that nice little bounce what I am going to speak to is is maybe it's twin cousin and its twin cousin is survey says I'm going to go AMAC okay now if we she said amen what do you see in terms of the trend on AMAC now when you look at a stock like Amat like many NASDAQ stocks it has been beaten down so when I say beaten down what I mean by that is there's just been lower lows lower highs lower lows lower highs it's been a nightmare if you've actually been a bullish investor and trying to ride that okay hold the stock and ride down this stock has have lately broke to the upside we see though that there is upcoming earnings and the upcoming earnings is in a week okay now what you're going to notice is volatility peaked when the stock price was pretty much at its lowest point and when the stock actually started to go back up what you're going to notice is the volatility started to fall so we're not at the highs of volatility I don't see that we're not the highs we're not at the lows either we're kind of in the middle okay and by the way that middle is not a bad number you're literally at 50. okay so that's not small now you got to remember we have earnings next week if the investor said James I want to get in this with the expectation of maybe try to get in it for the next week or so try to maybe write a portion of the trend well they might say I might consider cash secured put if they said I'm going to hold over the earnings thinking might this trend continue and continue to go up well maybe they pick a strategy that has more of a built-in maximum loss now remember let's kind of go back to something if we go back to the trade and we go look at the option table the 16 December 50 implied volatility what you're going to notice is if the investor says look I'm going to sell the 100 that is kind of it's a little higher in the upper end of the range okay if we choose a five dollar wide spread okay we might do the hundreds sell that and then buy the 95s right click sell vertical okay now the question came out to me the other day in a in a survey why do you pick a wider strike answer sometimes you're the reason why you pick a wide and strike is the open interest might be higher okay just because there's a strike in the middle doesn't mean it's as good as maybe the 95 or the the strikes that are every five dollars or ten dollars second if you're going to do multiple contracts you might widen out the spread so that way you're not actually having as much in terms of commissions now when you look at this this is the December expiration the 16th of December 1.67 credit confirm and send we take a look at these numbers what we want to really evaluate okay what we really want to evaluate is here is what is that maximum gain 167 dollars the potential and then what is the potential maximum loss 333 dollars so if we look at the RoR there the re reward relative to the potential risk and I should say potential reward potential risk it's 50 that's a decent number now on a one contract basis 333 potential Max loss if we said look the investor could risk fifteen hundred dollars we're talking about four contracts these numbers now will adjust to the four contracts here here in the commissions and if that's what they want to do gonna send the order okay now the reason why I'm picking uh you know when we talk about Nvidia the other day we said you know sometimes what can happen is indexes can get so pushed down that if these some of these stocks start to go up at all you got to remember that there's short sellers in these stocks that have pushed the stock prices down they sold the stock they don't own it they sold it with the expectation that the market or the stock might drop but if the stock starts to go back up there's two things that could be happening the short sellers actually say my gosh I don't want to be in anymore it's starting to go up now they buy the stock back to get out of the position so it gives this appearance like oh people are buying are they buying the exit their position that absolutely could be the case if someone then comes in and says they don't have any position I am going to buy the stock they buy the stock Etc and that's the second type of buyer if you get short covering and you get actually people actually buying you kind of get this squeeze of Interest so to say to the upside and that stock can go up you know like big percentages in a very short period of time okay now if we actually take a look at this we're going to send that order the other one I'm going to make mention of just briefly we we talked about need the other day remember we mentioned me we said Hey look utilities once when stocks actually go down especially utility socks some people want those dividends we made mention that hey wonder if rates just even neutralized even if they just neutralize could some of these utility stocks be maybe oversold could they start to go back up again well if they start to go back up they'd be getting above the 10th period moving average if they start to go back up again they'd be doing a moving average cross if they did both if it starts to go back up again and actually gets above the 10 how it's a moving average crossover and breaks out the horizontal resistance or just seeing confirmation of confirmation of confirmation now the one of them that I want to actually kind of bring up if you bring up AAP that's actually another one in that space okay AP if we actually said well what other one is actually in that space well we could actually bring up and name some I'm going to actually think about what are some other stocks in that space type those in what are some other you got AP and uh let me actually just pull up uh just real quick I was actually you know I was actually thinking about I was actually thinking about Wisconsin Energy [Music] here we go so if we actually take a look at this Kio I'm getting a little reversal CG kind of more of a trend continuation uh if we actually look at American Water Works getting a little bounce as well First Energy Fe not as strong as some of these other ones so we would actually say that's a lagger x e l that's kind of something that looks just like uh knee the reason why I'm showing you these is when the market goes back up don't think that everyone just buys tech stocks there's some people that say that is not really suitable for me where I am in what my investing goals are some people's investing goals are not price appreciation first some of it is they want income from the dividends they want the potential lower potential price risk and third is price appreciation now I'm also going to go back to the one other space we talked about and it was ding ding ding REITs and that was yours truly Simon Property Group you remember this one right we said hey one of those rates kind of neutralize we know that these Real Estate Investment Trust they borrow money well if in what two quarters ago you could borrow money for two percent and the next section uh quarter ago then it was actually six percent and now you could borrow money for seven percent that's the interest rates that should go up higher and higher and higher number one is you gotta have an investment where you think you could make that much to pay the interest and that's what these real estate investment firms have actually been dealing with how do you find real estate products where you can make a return big enough to pay for that interest now what we're going to actually do on this is I'm going to ask you a question is this starting to show a trend change yes or no now if we kind of looked at this and kind of said you know kind of have like a word drop down came back down rallied up fell back down I think we could at least say there has been some levels of resistance let's say right in here okay now uh if we actually take a look at this we want to get full disclosure if we actually said was there an existing position on that from the last trade the answer is yes okay now I I studied ethics this morning uh for at five a.m in the morning for for two hours ethics and I you know I I'll be honest I I study ethics a lot I I'm a big fan of it I think trust is everything okay and what you're going to notice is uh I just want to get full disclosure and I want you to think that we didn't have a position on this in the past example so I'm just getting full disclosure hence the word ethics okay so here it is November 1st where was that let's actually put that on the chart and let's evaluate might an investor consider putting on a new position we talked about this idea of managing and rolling so when we actually look at this we put this on kind of right after earnings right up near that area of resistance now if you take a look at that it stayed above the 10 period moving average and from here to here okay that move was on the three contracts the short putt well sold it for 4.95 it's at a dollar ninety one
nine hundred and ten dollars so this little tiny move here here is 915 now remember we can only make a certain amount left if we have a higher percent okay and we still have 36 Days remaining we might say geez that's a pretty good return considering we only have 36 Days remaining we're going to right click on this create rolling order rolling order we're going to buy the one we actually have back and then sell another one so if you're watching this and say well he didn't put any new trades then you don't understand what rolling is rolling is a new trade but you're using the same ticker you're already in let me ask you this do you think Warren Buffett went to the office every day and said you know what today forget Coca-Cola I'm going to actually talk about buying Pepsi and Monster Energy and stuff like that what you're going to notice about these institutional investors they tend to take these same names over and over and over and over and over and over again and they tend to ride some of these Trends they're not jumping back and forth to all these different stocks every day back for it back for okay try to find some stocks that are trending and then soak that Trend and squeeze it for every stinking thing that it's worth one thing you'll find about new investors they're bouncing all over the place and there's no consistency of really finding Trends rolling is trying to ride the trend same ticker just trying to ride that next potential move if there is one create a rolling order sell buying actually the December 110 back wait does the investor actually have to go out to January they don't have to still got 36 Days remaining we go back to the December 36 Days remaining we come down to the option table and say well is this kind of like before we don't go out farther on time but we just roll up and strike when we say roll up and strike we got the 110 strike now we're just going up and strike and actually what we mean is just a higher strike price than where we are now answer might be or yeah the example we could look at is the 115. we're going to change this from the 16 December to the 115 and what you're now going to notice is if we take look at this can roll for a credit now that is actually something in the online course and really what we talked about in the online Workshop a lot consider it consider rolling if you can do so for a credit that's littered all over the place of the material but that that means we'd have to read it okay see in the online course it's in the online Workshop here it is sing an example that consider rolling if you could do so for for a credit ding ding ding ding ding gonna now send the order now but wait does the investor have to do three contracts no they don't have to okay but if we want to kind of reinstall the three there you go and now what you're going to see is confirm and send and there it is right there so there's the new updated credit less the commission send the order bang now let's actually take a quick uh peek uh what I want to kind of do is take just a couple moments and I want to answer a quick question from Owen okay now Owen actually talked about kind of just talking about the uh the trend conditions okay now if you're not familiar with let's say the uh the trader talks Channel okay if you're not if you're not on the trader talks Channel you I I just did this and when I read Owen's question today on Twitter I thought to myself well geez I wonder if I actually type in Trend conditions James Boyd what what would actually come up here and I literally uh I I looked on this and uh I saw that there's a couple actually trading the trend understanding Trends and I actually went to the second one and on this what I'm going to do is I'm going to actually look at this is there's actually a number of these different classes that actually kind of cover the concepts of trading the trends understand different types of Trends so make sure that you actually subscribe and then for example that you're using that now the other one that I also looked at as well is uh Trend seasons can change let me show you what I mean by that if you look at this what you're going to notice is some of these are going back to like the last one or two years make sure that you're using that okay but so I just want to make sure sometimes you can answer your own question but let me answer this right now in five minutes we know Trend condition number one is price below both moving averages okay now so number one is we want to know what the stock is doing relative to the moving averages that is what is creating one two three four five okay one two three four five is a way to categorize and or monitor the trends now two is the price above 10 but not 30. okay now I could write down EMA SMA I think we might be pretty good on that okay and I'm also going to save a little space and time so all I'm going to actually do here is let me just type these in and we're going to talk about the strategy number three is where price above both moving averages I'll just label Mas this is actually where the price above both Mas buck up near resistance okay just label it like that and then what you're going to notice is this is where actually the price Falls below 10 but price above 30. okay now of the two that are the most important if we said my gosh if you miss these it could have a dramatic outcome or effect on the portfolio the ones that we would actually share the most important if you're going to try to catch a trend reversal is two because actually two is really what we call diagonal breakouts and if we actually said let's say what is number five and by the way diagonal breakouts are really bullish momentum okay bullish momentum diagonal breakout to the upside and five would actually be bearish momentum and this is diagonal breakdowns okay so that's that's half the question now but let's kind of talk about the strategies so let me ask you this let's start with number two if you had a downward Trend like we saw an amped and a d Nvidia the NASDAQ and you started to see the stock getting back above the 10 period moving average what might the investor consider well you might even consider volatility I'll just kind of put Vol question mark if that volatility is still high they might be thinking about short put verticals because bigger bigger higher ball don't it bigger premiums bigger premiums lower brake demons greater probabilities they might say I'm going to focus on that first second might be uh cash secured plugs why well higher of all higher volatility bigger premiums lower break evens cast secured well let's let's just call them csps okay cash secured plugs but James can the investor maybe buy a stock well they might actually say look I'm going to buy stock why because at least now you have a breakout you have a higher high he might say I'm going to do a long synthetic they might actually say I'm going to do a long call notice in two they're re-engaging in the trend why because it it's finally starting to reverse look it's going to be tough to always see stocks going down to zero at some point they tend to reverse and if those stocks actually get in a two condition they can sometimes have violent reversals okay and why might the investor focus on volatility place first well play the probability of trade and volatility falling volatility but why might they still do the stock in the long synthetic and the long call because they want strategies that are more uh well have a higher Delta now in finishing this up if we actually saw the stock actually making higher highs with higher lows they've actually might say James this is kind of like rinse and repeat of what we saw before okay now what I'm going to do is I'm going to kind of flip the order a little bit they might actually say James based upon that we actually have a higher high and higher low I'm actually seeing Trends more conducive for maybe more directional type positions like stock like long synthetics like long calls that's Trend condition number three when we actually get to let's say four we're up near the area of that bad word resistance and not every time we go up to resistance does that stock actually pull back this is where we get into ideas such as exiting okay this is where we get into the ideas of scaling out selling some if the investor says I'm not going to do either of those they might say James I'm going to maybe buy a protective put on chairs if I have them or they might say cover call which is an income strategy and if they combine those two you're now talking about the collar now lastly if that stock does not actually break resistance and now it starts to drop and it's dropping and it's dropping this is when the investor usually says have I been stopped out question mark okay might they scale out okay if they're talking I'm gonna sell and this is also when they're probably thinking geez it would be nice if I wanted to consider options do I know how to use things like protective puts or cover calls or callers remember callers are the combination of the protective put in and the cover call now you actually take a look at this and said okay now the price is in let's say number one condition I mean it it just looks like everything is being smashed to the downside lower lows lower highs price we're looking up we're looking up at both moving averages this is usually when the investor if we're talking about for bullish they're waiting or they can waiting for the stocks okay to reach horizontal support they're also keeping an eye on for maybe bullish Matty divergences which might show that that's those those bad Sellers and I don't mean that literally those bad sellers look they're people too and they have a perspective right but those sellers okay sometimes can maybe become a little fatigue like buyers and might you see some of the selling pressure kind of a bait a little bit if you're in a trend condition number one what you need to understand is you sure hope by then you maybe if you were going to consider protection actually you're scaling out that that has already probably happened okay using Trend condition number one you're trying to wait for you're in protection you're just kind of waiting for actually us to fall down to horizontal support you're actually looking for the ball smack Divergence and can the investor be in bearish trades bearish trades yes but the biggest actually thing is these are probably let's say they're probably nearing targets so if someone says I'm going to put on bearish trades when we're in train condition number one what I would tell that person you're probably waiting too long if you're if you're talking about putting on Bears positions the investor is trying to apply potential new bearish positions in for four and five because you're actually trying to put on Bears positions like short call verticals okay long put verticals Etc when we're at an area of resistance and we haven't fallen yet usually in Trend condition number one this is when those Bears Traders they tend to profit take okay because the prices are dropping in or have dropped down to the Target so that's kind of like your eight minute answer to your question Ellen okay I'm out of my time here today try to answer more questions today as we've had a live active Market let's actually go back and actually take a look at uh uh the market Dao sitting here at 1021. this is a thousand Point uh Thursday on the trend trading class today we actually covered a number of examples we talked about signing a property group we rolled that cash secured put we also rolled the position on me when you look at positions on met did make a brand new high here today PFG also actually hit a brand new high here today keep an eye on those financials those actually have been quite strong basic materials Industrials have not been uh an area laughing Boeing even though some people think about historically what's happened with Boeing Boeing actually breached out an area resistance so there's actually a few names here that are actually kind of giving a trend to work with I'm out of my time here today remember with what we discussed it was done for example illustrative purposes only thank you so much and with that said please fill out the survey by the way some of the questions I got were from the survey so thank you for that and that gave some content for today's class with that said thank you so much take care bye-bye