Updated Scripts for Technicians | Technically Speaking: Trading the Trend

[Music] hello and welcome to trend thursday we welcome you to technically speaking as we talk about trading the trend weeks to months my name is james boyd alongside with me my good friend michael keely uh and don't let him fool you uh he talks about fundamentals of macro and economic data but he loves the macd i know he does every time i say the macd his eyes light up so it's great to have him here as well so uh yeah so bill says uh jbs jacks up to date on the charts he is up to date on the charts yes he is i have my wife's uh nieces here six and eight years old and they've actually been talking i asked them yesterday so how do you actually buy cattle or how do you buy horses and they said well it's easy you just go to an auction and you gotta actually have cash and be be ready to raise your hand as the price goes higher that's what the six-year-old said which i thought was very funny so i it's not just jacks it's also my wife's nieces as well we'd like to welcome edward sebastian fez amanda uh jen lamont and many others amy lisa welcome to you as we get started remember that you can follow michael or myself or any instructor on twitter we do post educational content there daily we actually think of it like this we meet online to do like a webcast or online workshop but we actually for example post stuff offline and that's where you could actually see a lot of stuff we do sometimes even in the after hours like last night now just real quick as we're getting started want to give us a quick reminder that uh you should consider the investment objectives risking charges before investing okay options are not suitable for all investors especially risk inherited trading options also understand that we're going to be using the people money application make sure that you're using people on the account even if you're doing real trading it's always a great learning experience especially when you're trying to really hone uh a strategy or something you're trying to work on think of it as practice we're going to demonstrate the function of the platform we're going to use actual symbols remember that td ameritrade does not make any recommendations uh and also to determine suitability of any security or strategy now lastly also remember the uh the option greeks as well delta gamma vega and theta and the last one here is also remember transaction cost now today what we're really going to cover we will take a look at the market let's focus on the nasdaq at first let's kind of talk about the trend there it's actually down about one percent remember it's been up about 10 okay so it's down one so it's still up about nine but let's kind of talk about that because that might lead into some discussion where we talk about potential exits or maybe even using options to overlay on stock positions since many stocks are coming into earnings at the tail end of this month we will also talk about the sector quick view okay just a couple sectors which ones are strengthening or weakening we will also talk about script update i did post that uh last night i want to talk about a market watch script versus a chart script the differences and how you can see what those are we'll talk we'll play that one-on-one where we talk about a new potential entry but i really want to kind of focus on exiting okay now i know last week we kind of visually had those lines drawn on the chart i want to also talk about current portfolio management and listen to the words i'm saying i want to talk about accident okay i want to talk about stops i want to talk about using options as a way to buy a right to sell the stock at a set price i want to talk about that again the word is exit now and that does not mean when i say access oh my gosh james is bearish that does not mean but there's been some questions that have been brought up so i really want to focus on that okay now we're also as we're going to go through michael keeley is here to answer your questions but also remember uh i will be looking in the chat as well so don't wait just until the end for questions just go ahead and actually uh express those as we go now just real quick as we're getting started let's go ahead and hop right in i have the nasdaq here and i'm going to show you the nasdaq in two different charts this chart is really looking at uh the whole moving average and it's using a 10 and a 20 day 20 period moving average now what you will notice is there's been a little pocket here where we actually have seen a little softness okay now i'm just going to kind of use a yellow color there was a time actually right there where that shorter term moving average went red there was a time right there where the shorter term moving average went red and then what you're going to see is just today we actually see that moving average you can we could zoom in a lot but if we zoomed in what you're going to really notice is the moving average is red so what you're going to see is the whole moving average is a very sensitive moving average it's even a step above an exponential and you're seeing that we do see some shorter term softness now remember the 161 we actually got above that we actually had above us went within about a half percent of the 200 percent extension and the idea is that can this actually really be a uh potential area of support now since we have michael keely with us you know he might say hey look at the macd it's actually down at the lowest point so as the trend actually goes up higher and higher and higher the macd is actually at this lowest point so this momentum is starting to struggle a little bit and that's where the investor really wants to be watching for are the support levels holding now let me show you this chart in a different form probably more standard okay this chart on the right hand side this would be your kind of your classic 30 period moving average the red line check this blue line or that aqua line that's your 10 period exponential but what you'll notice is we've actually fallen down to that line we haven't broke it yet okay but we're down at that line now this is where the investor should actually have a plan ahead of time and say geez as the nasdaq has actually gone up and it's really gone up it stayed above that for the last month okay uh and actually take that back it's been for the last five weeks so from june 4th all the way here okay five weeks of just nothing but probably sheer delight okay where it's gone up now we know that it's not always going to hold that so the idea is hey if we start to fall down below that are stops adjusted is the investor considering maybe cover calls or protected puts etc if that trend were to fall back and maybe eventually touch the 30 period moving average that's not unusual especially when we're talking about holding the trend okay so the nasdaq being a little softer we're going to want to touch about touch on that now the dow jones that was actually the one that today midday had like a hammer uh you could even argue even a hanging in especially if you thought this was the area of resistance slightly down here but still holding the 10 period and you go back to the spx you're also going to see very similar to what we're seeing on the nasdaq itself holding the 10th period but being a little uncomfortable if we close here we would actually be uh potentially maybe leaning below that 10 period moving average now volatility has been very quietly shh okay very quietly kind of nudging higher now remember as these prices go higher as the vix price level goes higher some investors might be wanting to buy puts and when you buy puts that is a way to exit or at least the option to exit at the strike price we're going to talk about that okay but that actually we're seeing the vix 1763 and what you're going to notice on the macd is the mackey is actually staying above zero if the mapping is actually staying above zero we actually might see some building of pressure of the vix and if the vix actually goes up stocks are more likely to get down below their shorter term support level so we want to note that now sectors wise we are seeing utilities now is this a bullish case if we're seeing utilities go up does that tend to be a more of a bullish case or a bearish case and i would even say bearish or neutral okay if we're seeing utilities going up ixu if we're seeing staples actually going up ixr and those areas are leading other sectors is that typically more neutral or bearish market posture well if we see those areas leading it it's kind of giving us the idea that investors might be profit taking from the higher beta the more volatile areas and they might be swinging around to actually really buying those more conservative areas that have been beaten down that have lower volatility they tend to and they're dividend paying they might not have the same upside potential some of the other tech names subscribe names but there can be more safety based upon actually uh they're backed or they tend to actually have less fluctuation on their uh their fundamentals now when we actually so utility is actually moving we see staples actually moving when we actually look at energy uh moving in the wrong direction when we actually take a look at energy we're seeing the price down below not only the 30 but below the 10 remember if we see a price below the 10 what's the prediction the prediction pain okay and we're seeing some pain in that space so if the investor owned let's say energy stocks that might be an area where they say maybe could i exit those energy stocks or could i protect those energy stocks by just looking at the sector that's going to lead us to that question last one we'll actually touch upon here is discretionaries discretionaries have been actually a strong one but the last well actually today really seeing kind of some price getting down below that 10 period moving average and if we fall down below the blue line the idea is could the price fall down to the 30. so even stocks and discretionaries are getting a little push to the downside so i've said one of the things we really want to talk about today is exiting when to consider exit whether that's stop adjustment whether that's actually using options to try to create some income or protection we're going to bring that up so now the last one we actually did not mention is that the tech tech is still staying above the 10 albeit that it is a bearish engulfing back down to uh that 10 period moving average now here's the deal i believe that most people know what the exits are but what i do believe is that people struggle in making a decision you know this when people drive you know this when you go to the store and it takes them forever to make up their mind of what they want to buy okay and they spend 10 minutes looking for what type of bread they're going to buy so the biggest actually thing is we want to have a plan ahead of time of if the price is fall where's the stop if the prices fall is the investor going to use options what type of options so let's actually get into the second agenda item now and we're gonna talk about the script update we'll look at market watch and uh the difference in the chart scripts now what i what i did actually last night is i have also posted so over the last i don't know two to three weeks we have posted or talked about some new scripts okay now what i did is when you go to my twitter page okay on the right at the very top so when i scr the first thing and they really call it really like a pinned tweet which means it is held right at the top so now if you're actually going to look at this let me just kind of make sure before we look at our first example i want to go to this right here okay now i wrote something and i think this is let me give you a little preface of why i do this okay i've been investing since 1996 and and people have asked me in the thousands of what about price performance how do you track that what are some potential entries or setups okay and uh exits what about relative strength and crossovers so all of those questions are can be whittled down for the most part really on one sheet now if you click on this with this picture click on it what you're really going to notice is it's really going to give us uh where how we could use scripts on the market watts and also on the chart so for example we talk price performance we would say one week percent one month percent year-to-date percent okay etc if we actually said relative strength we could actually look at the rs for relative strength and if we were actually looking for let's say a hole okay or a flag or a breakout we could also see those as well anything that we've talked about in the last two to three weeks was added to this chart okay now what i would actually like to do before we look at our first example now remember is it has the column heading which would be the first on the left and in the middle it's going to really say what is the purpose and in blue it's going to show what the script is now is is everyone actually okay with actually for example let me let me ask you this question that will determine if we need to do you know how to put on those scripts is there a script that stands out to you that you say i want to know how to do and and also understand that i want to kind of show you this when we actually say hold right there that's go hold on the market watch tab that's why i put that in red if you said james i would actually like to see the potential entry setups on kohold where we have those green dots and the 20 to 55 day high and again in red i actually put that i said that is really on the chart now mark is asking what is the purpose for the season okay so the purpose of actually that season is to really let's kind of just read this season that's on the market watch what is the purpose of it well let's read it together this really helps us to find the type of trend okay now let's let's kind of use that now what i'm going to do is i'm going to act i'm going to kind of say in this case that i don't know i i've never put this on i am writing down on a little sheet of paper what the code is and i'm going to put kind of right so you'll see it right there okay right so what i did is i just went to the blue i got season this is for the market watch what is the purpose it's the type of the trend and what is the code just wrote it down all right so here we go now remember it is case sensitive now what i'm going to do this will bleed into the first example so all we're going to do is going to go to the very top right we're going to go to the top right we're going to go to open shared item now it doesn't matter whether you do the market watch or the chart scripts it's the same initially if we actually go the gear at the top click on open shared item we're just going to copy that code now what you're going to see in this case is if i type it in correctly it should load up fine now if it loads up and if i wrote down something wrong it will say hey it's not working that tells me that i wrote something down wrong or etc so i type it in i'm now going to say let's import that and now what i'm going to do is let's rename it now if we do i'm going to just label this as season now remember what is the purpose of season this will bleed into our first example the purpose of season is to really show us different types of trends now let me click on okay now where do we actually pull it up right well this is a market watch quote tab script okay so we're going to go right to the market watch we want to pull up a list of less than 50 stocks we can right click on any of these headings right click we're going to customize the headings and what we just saved we're going to include it in that column heading so we right click on any one of these headings right click customize and now what i'm going to do is just click on season now what what do i get out of season well i'll tell you what i get out of the season this is going to really tell us so if i click on season let's add the item and now what you're going to see is it's going to be right cheer now if i click on ok now what you're going to see is it's going to really kind of tell us and i'll give you a definition of what these really mean okay so now if i kind of open that up you're now going to see here's a list of stocks these are stocks that for example are in discretionaries disney starbucks etc now what you're going to see is summer label summer labeled as summer time condition fall condition early winter condition let me kind of give you a little sense of what we really mean by uh let me see if i can't there it is that's what i want so when we actually say let's say a summertime condition this is where the price is above the 10 and the 30-day moving average now would that typically be viewed as bullish or bearish if the price is above the 10 and the 30-day moving average we would actually say this is probably bullish okay that would be our guess if the price is above the 10 and the 30 we would be thinking if we looked at the chart it's probably bullish okay now if we actually saw on the chart if i go back and say james what does this fall mean okay what does this follow me well let's kind of pull it up well if we actually pull it up the price is above the 10 30 day moving average so that's we would think of that as bullish but the biggest key word is it's maybe it could be up near what what's that big r word the big r word is up near resistance so we're going to say bullish but up near resistance and we would be thinking about maybe potential exit or we might even also label here protection maybe that's a cover call maybe that's a protective foot or a collar something to protect so that's kind of letting me know that the leaves are changing on that tree and hey those stocks that are in that fall condition those if i was saying i want to sell into strength that might not be a bad place if i want to actually put on protection or an income based strategy the stocks are in a fall time condition that can help the investor spot which ones could be in a different type of trend or also how close it is to resistance now james what happens if you see a stock in the early winter time condition well first off okay that's that's not what the investor wants to see if the stock starts to fall below the 10 this is where the investor or the price we're losing momentum now really in this case you have to wonder stop loss okay protection right so when you see stocks in the early wintertime condition they were going up and now they're starting to drop now remember let's go back to that sheet what i wrote someone said season what is the purpose of it it tells us the type of trend well do you want to buy stocks that are falling down below the 10 period moving average now i'm only going to ask one silly question okay now are there some investors where that is their entry signal maybe okay i haven't no one's told me that that's what they'd like to do but maybe there are some institutional investments that that's what they like to do okay now when we actually look at let's say a wintertime condition this is when the price is below the 10 on the 30-day moving average so now we actually have negative think of this as bearish okay we would say shorter term okay for sure and we're falling down okay so when those prices are in the winter time condition okay so the question was what is seasons seasons are different types of trends why do you care well the type of trend will probably determine what you're going to be considering with that stock if that stock is in the winter time condition we would say the stock in the shorter term is bearish and the price is falling down and the last one we'll bring up in answer to the question is well what about springtime well if the stock was falling down but now the price is getting back above the 10 this is where we would say it was bearish we would say is it turning bullish okay now i want to ask you a question here which of these seasons of trend do you like the most if you said james if i could pick one for me every stinking day this is what i want what do you want okay well now what you're going to see in this case if someone said well james when does the investor tend to actually benefit the most if they're positioned or postured in the market well it shouldn't take a phd to answer that question stocks that are really above the 10 and the 30 that is where the investors probably thinking to if this keeps going you never know okay retirement could be closer than i think okay because to a bullish reversal springtime condition okay where does it go from i was doing well to now all of a sudden i have just given the mother stinking load back well it's that should not be a phd question either you would know if you actually just looked at the here if we if we actually start to see prices fall down below the 10 okay that early winter condition these two spring and early winter are really the changes in momentum spring would be going from bearish to bullish and really early winter would be going from bullish to bearish i don't need to look at all of my all of the the stocks in the watch list i just actually wrote the code to actually be able to see what types of trend they are so if we had limited time and we said hey you know i just want to kind of see which stocks would i be the most concerned about well we'd be the most concerned about the one that was in the early winter condition and that one is survey says tesla the stocks in the summer time condition those are the ones that probably are still trending actually nicer and the ones that are gonna fall those would actually be the ones we would say do you want to sell the strength do you actually want maybe want to do a cover call protected put etc now i want to kind of just see if there's any questions okay okay let's see if there's any questions now uh the cold comes up but does not appear on the chart okay so let me kind of go back so first off i want to make sure you're reading this right okay and and uh if we have some uh the second question we have okay is let me just bring this up regarding okay let me just kind of slide this over and what i'm going to do is be careful here because when we actually take a look at this it's going to show cohold okay so there's cohold closed above the high of the low date and that says in red why is it in red because that you you need to note that okay i'm trying to make this a little bit bigger it actually says that's on the market watch tab okay so if someone says no i actually want the potential entry setups they'll hold that green dot that 20 in the 55 day high that is on the chart you want to use that code so b be watching that color code i did the color code for a reason so if you took the code for the hold and you said hey i'm not getting cohold on the chart that's because it's not for the chart you probably grabbed it from the market watch tab okay so if you said i want the hold and if you don't mind let's show this and then we're going to do our first example but i'm just answering these questions as we go someone said i want the code to actually be on my chart okay well let's actually write this down so i got k m u h w w r the only letter in there that's capitalized is capital u so let's let's check it together now let's uh so the question from a rope says how do we get the hole dots well that's what we're going to show right now so if i click on that gear at the top same thing as we did before let's go to the gear let's go to open shared item and i'm just going to type in what was on that sheet k n capital u h w r okay now if i wrote it down right and i typed it in right i'm going to now just click on preview now what you'll notice is it kind of gives me like a little picture of what it could be and i'm gonna go ahead and say let's import this okay now watch what happens it gives me a little box here saying hey what you just imported here it is now does this actually have holds on the chart so thomas i'm betting that maybe you grab the hold for the market watch tab that screens a list if you want those potential entry setups like a hold set up or a 20 or 55 day high you want to look at the the the script for the chart please be watching what is in red potential entry setups on chart in red okay what is the purpose of that well let's read it together these are bullish bounce setups okay so guys and gals i've done everything i can to kind of make it as clear as possible even color coded so that way you kind of know why would someone want to hold on the market watch well when you bring up a list of stocks you're able to screen maybe 50 stocks without having to look at one chart that's why someone would have a hold on the chart once someone actually has identified okay a setup they and they want to kind of see is it setting up is there a hold on the chart you know et cetera et cetera that gold could still be plotted on the chart okay now let's actually go ahead here uh and by the way once we have this how do we save this okay we can actually go to where it says studies we're going to say save study set now if we do save study set right there we could i i just label this as potential entry setups that's a little less now if i click on save that okay so if i go back into style and load style you're gonna see that it should be right in that area where it says potential uh entry setups okay and uh mine's gonna be i've actually saved so many of these yeah it's going to be in there okay just save it and it's going to be in that drop down okay now uh let's actually go to actually this next point which is let's kind of talk let's go back to the market real quick let's kind of shift into trader mode here okay now if we have so there's a couple stocks that i want to bring up so when we actually look at the nasdaq what type of stocks do you think if we saw the nasdaq starting to drop down a little bit okay if we saw that what type of stocks do you think could be affected now it shouldn't be too hard because when you think about what are some of the biggest market cap stocks in there well it could be google facebook apple microsoft right let's bring up the example uh in this portfolio let's go as a monitor and let's actually look at for example what stocks are in this portfolio and let's imagine the investors said well james if this index the nasdaq were to get a little bit more volatile what are some of the considerations and why so i'm going to talk about stocks okay here's a hundred shares of apple now if we go and pull up the apple stock okay as one example what you're now gonna notice is apple just made a brand new high here today okay but what you're gonna see is on 727 the stock has earnings so here we are with 12 days remaining go into earnings now what would you consider if you saw this stock up if we said is it selling off well it's a bearish engulfing is it breaking support well no okay it's not necessarily breaking support but now we're starting to get inside that two weeks before the earnings now when we have earnings upcoming where does the implied volatility tend to go does it tend to go up okay where does that implied volatility tend to go well the implied volatility actually tends to go higher so what a potential opportunity does that really bring up well the higher the implied volatility the bigger the premiums the bigger the premiums the more the investor could sell a call that was maybe out of the money and still get up to that strike and more premium on top okay now what i want to do is let's go to the trade tab and let's say the investor said in this case that they want to sell an option where it was maybe the 20th of august and they decided hey look i want to sell an option that maybe has a lower probability of the stock closing above the strike now when we talk about probability the option greek we would be mentioning would be delta so that delta is saying if we if the stock is at 147 and change the investor sold the 155 that's the strike that is in between the 30 and the 40. it's the only one and you're gonna see if the 155 strike now remember this paid one account has 100 shares so it could sell one call now let's run these numbers just really quick now when you do this over and over and over again you're going to kind of see that we're just kind of saving some time here and what i'm going to do is i want to kind of see what was the stock purchase for about 129.88 so what i'm going to actually look at here is i'm going to take a look at 129.88 we're looking on actually selling the 155 call and that premium price and what that premium price just want to make sure that pulls up right there it is the the premium there let's kind of verify that kind of see is is the premium potentially worth it well the premium if we were to sell it at the bid price it'd be 224. let's run the numbers just

real quick so that premium is really 224 and so that premium yield is really 1.7 now remember that premium yield is just taking the option premium dividing that back into the entry price of the stock it's 1.7 which is not necessarily that bad considering that uh this option is for 30 days now the strike to the upside is the 155. we know that the stock appreciation that's pretty high but you got to remember the paid money account bought at 129. the option premium in this case really being 224 and the maximum gain and again chunk of that gain really coming from the stock it's about 27 so the percentage here is going to be high it's just because the stock was purchased at 129 when a lot of investors were saying 135 was resistance which didn't turn out to be resistance now if the stock were to stay flat theoretically it lowers the average price of the stock but if that stock was any lower than 127.64 it would be in a losing position now uh vj is actually saying says apple is still in summer oh that is true but what actually might kind of make it interesting to do a cover call well even though apple is still in that summertime condition and when you say summertime condition what does that mean again it means the price is above the 10 and 30. why would the investors still maybe

consider a cover call well they might consider a covered call because now you're starting to get inside that two-week window of prior earnings okay when you start getting inside two weeks a couple days prior to earnings that's when you're gonna see volatility at its peak state it's not going to be a day before two days before typically it's typically going to be two it's gonna be days before now you gotta remember if this stock as soon as the company announces earnings where's the implied volatility going to go down like a balloon and what that's going to happen is it's going to actually deflate the option value and the investor might decide to try to buy that back for maybe a lesser amount than what they sold it for now this is this is a spreadsheet that we've kind of just made over well we just made it on the spot we this is kind of talking about where the stock goes up the stock goes sideways the stock goes down there's nothing unique about this this is the math we would be doing and drawing in but we just like to save time now how do we actually sell that call assuming we already own the stock already well one thing we're going to do is just click right on the bid if you already own the stock already the only thing you're doing to make it a cover call is just click on the bid price of the option single cell one contract because 100 shares we're now actually going to change it to the uh that price of 226 limit now what you need to understand here is whenever you sell a call you sell a put at any time that option to me can be assigned that means if the investor did a cover call their shares can be taken prior to expiration and up to expiration and or at expiration but that means the investor still makes all the way to 155 and they still get to keep all of the premium that actually means that their rate of return was higher than what was initially thought but they would lose the stock okay now i know some of you are thinking of how do i get to the front of the line to have that happen i've never been able to figure that out but boy that sure would be nice okay now we're gonna go ahead and confirm and send the commission on this is gonna be 65 cents and again we're trying to create some income here but also some upside as well let's go ahead and say send that order and now what you're going to see in that case is apple has been turned into a cover call but you got to remember the stocks at 147 the upside is still eight more dollars away from where it is right now and that's the eight dollars for the next really 36 days now the comment says maddie says why not just sell the july 30 instead well so when we actually bring up the july 30 when we actually come down there's a certain amount of premium that the investor might want okay so in answer to many's comment why not just sell the 30 july well if we go look at let's say the options that maybe have as close as we can to a delta of 30 to 40 but not over 40 it's going to be the 155 medi uh we're not even getting we're barely getting one percent of the uh the option yield many i don't know what you like okay but this paper money account wants to see a percentage of greater than one and a half percent if it doesn't get one and a half percent it's not going to sell the 30 julys okay so let's just be 100 crystal clear when we say premium yield what is that a really what does that mean okay so premium yield that's going to be the option it's going to be the option premium okay divided by the stock entry price so we're trying to really kind of figure out what's the option premium relative to the stock price if it's not greater than one and a half percent it's going to sell further out now you might have some different criteria but that's what this paper money account does now let's go to the next uh topic and let's kind of bring up let's say a new example now one of the things we actually do on a on a daily basis okay uh if we actually bring this up and say okay where can we actually look for potentially new examples now remember we're being very forthright okay we're being we're kind of showing this is now showing uh really the dow jones okay now what i'm gonna do is i'm gonna fast forward here here's the nasdaq and then i'm going to go over to really the s p 100 okay and i post this okay now when we actually look in the s p 100 the list is broken down into 50 stocks each and i shared that script again last night okay you're on twitter you saw that now what i'm going to do is i'm going to actually kind of look for maybe some stocks that are maybe showing some let's say an increase of trend now when the investor actually looks at this they might say well geez what stocks are rotating now james when you say rotating what do you mean well maybe it goes from burgundy to burgundy to red to green so dd is doing that we also see cvs is doing that now that does not mean stocks like maybe costco they're horrible because they've been green forever and it doesn't mean that they're gonna uh if they've been green for a while they can't keep going up remember we hit that okay and just because the stock has been all red doesn't mean they're going to stop losing because it can't get any worse okay don't get me off on that topic okay because we know that that's not the case now another stock that's also been kind of rotating from burgundy red red uh burgundy twice red gray to really in this case green well that's actually berkshire hathaway the b shears okay so the investor kind of might want to make a habit another one we're actually kind of seeing rotation especially from a trend perspective over time is really bmy now the paperwork account already owns bmy okay but we're making a habit of actually looking for these stocks that are rotating amgen amg now we're seeing two uh protection companies almost said that i1 okay i can't say that but if i actually look at this we're seeing aig in berkshire let's go to that area just real quick okay now when we actually look at these stocks let's kind of start with in this case aig to begin with that was the one up near the top so if we actually looked at aig and said is this really showing something where we're getting a a bullish bounce or a reversal well the one thing is if we said what season what type of trend is this in well we would actually say that aig is really in a what type of season well it it's actually in the fall don't mess with me like that's true it's not the fall it's actually the spring because actually the price is getting above 10. now the price gets above 10 that actually means that we could be going from bearish momentum to false momentum now if we had a dollar for every time someone said yeah but we're below the 30 and the 30 could act like resistance why hasn't been resistance for a long time and that that can be a potential resistance okay but a lot of times if you're waiting to kind of see lots of these areas resistance resistance resist you never get in that's why the investor didn't get an apple that's why they didn't get a microsoft because they saw previous levels of resistance and a lot of times not all the stock will break through all those levels then the stock makes a brand new high and then investor says i'm too late so you just got to understand that these are potential levels okay they haven't been tested lately you only have one test right there and the stock is reversing now the stock is coming into earnings now this is kind of interesting because the investor might say hey some of these protection type companies aig and berkshire hathaway maybe should be starting to base and get some false momentum now aig with the earnings upcoming might have a little bit higher implied volatility now i'm going to choose a lower price dollar stock and choose a higher price dollar stock let's start with a lower price dollar stock first now wonder if the investor said james i want to actually sell a put and i want to be more aggressive the way you could actually tell if you're going to be more aggressive or if you're you're doing that you get a higher premium second we can actually see that there's also a higher delta as well now you gotta remember there's a higher likelihood of the stock being below if the investor says i know that but i'm more confident on the stock staying above that strike they might decide that you pick the higher strike close to the current price of the stock the investor can right click right on that bid going to go to cell going to go right to vertical and we're going to do a vertical now why are we doing a vertical well the reason why we're actually doing a vertical is because this actually has upcoming earnings we don't want to be in a situation where the investor is selling a put the volatility goes up and those are a negative vegas strategy we talked about that on tuesday now if we were to open this up and say could we actually do let's say what strike are we going to buy 46 45 43 guys and gas we can go down to a 42 those still have a couple hundred contracts on those and we could actually really widen out the spread now in this case what i want you to notice is the paper money account is going to sell the 47 a little bit more aggressive by the 42. now if the investor did this they can also position size based on the match loss so if they said well we can take fifteen hundred dollars of max loss which is what the paper money count here can take we would really be doing about in this case about four contracts so if we go to edit we're gonna change it back to four okay four confirm and send now what you're gonna see is it's right around that max loss we can now see what the credit is for the four contracts the commission for the four contracts now we widened out the spread a little bit so we weren't getting have a higher commission but still also not really going mat aggressively above what the max loss is now in the ira account the buying power effect is 1520. so

we're fine there now the paid money account wants to do that we're going to go ahead and send that order and now what you're going to see is it's selling the 47 buying the 42. now this is a lower price if we go back to let's say the berkshire hathaway and we actually look at this what you're really going to notice in this case is this is a stock that also kind of is going into earnings it's kind of created a couple times where it's maybe falling down we can see that but there's been a couple times where we can see that the stock has been trying to create a base or a level of support now when you look at the shorter term yes it's down we get that but when we actually go back and look at the daily the three year weekly chart this is what that trend is really showing now what you can have sometimes is where the stock actually goes up and then it plateaus or pulls back and what you'll see is lately berkshire hathaway has really ran up and really pulled back now what you're going to notice is if you look on the three-year weekly chart the investor would really like to see the price stay above the blue line why because that's actually when the stock kept its momentum okay now if we for time's sake i'm not going to tackle this one but i think i think the the example is the same it's just a higher price dollar stock now whatever the support level is okay whatever the support level is that's where the investor might decide to sell a strike close to that level and or below where they're thinking the stock could really stay up above that level okay now if we had time we would actually add the berkshire hathaway but let's kind of pick a little different stock here now if i actually also go back to let's go back to this let me actually bring that back up i'm going to show yeah let's now i want to kind of tackle that second list so keep an eye on the insurers if we actually look at different type of stocks that are also getting a little rotation but we're also seeing an area like lowe's burgundy red okay so think of burgundy as something that's massively underperforming the s p red would be still underperforming but not as bad relatively sp think of gray as mimicking s p performance and think of green as something that is outperforming now if we say lows we would actually probably say uh home depot now lowe's again is really going to be in consumer discretionaries now if we look at also a stock let's say mondelez which would be staples we look at merck which is another one rotating we look at knee that's another one rotating now i'm going to make my comments on me okay me is a stock that is one of the more volatile names in the utility space which for some investors they like that volatility now if we looked at this chart what is the green line showing well the green line is showing the green line is signifying that it's making a 20-day high and that think of that as a shorter term potential breakout the yellow line is again showing visually on the chart uh over time that's why we see the line not just now but where is this where's it been over time we can actually see that the yellow line is a 55 day high okay now on the bottom what do we see well what we see is we see green dots here here there and there those green dots are signifying where the cold candles were okay closed above the high of the low day so just yesterday the stock did a close above the high low date let's verify which of these three candles was the lowest recently one two three it's day one did that price yesterday closed above that candle that is in white it did that's why we're seeing a green dot now if we have earnings upcoming are we really massively concerned about not necessarily okay the reason why we're not massively really concerned about this utilities so we're not really expecting such a great volatility on their revenue and earnings per share now the one thing about me is if we go to knee if the investor said you know what james i want to do something where i could have some leverage okay the reason why we would actually say some leverage is the yield that actually me is about two percent so it's not maybe as high as the others and the investor might say can i still get that same stock exposure but not really have the same capital investment of course the investor can go a long call which is a bullish position and they could sell the put the selling the put is actually reducing the debit for the call we're going to right click on that ask price go to buy go right to where it says color synthetic so guys and gals we talked about this yesterday on the caller and synthetic webcast we now see if the 75 calls 75 put what is the cost out of pocket 1.55 the investor has a right to actually buy their shares at 75 but that right is cost 1.55 that's why the break even is 76.55 now

the investor can still set a stop so they could say hey if we start to go let's say at or below a price we might say look if we went at or below let's say 73 27 the investor might say i want to exit well if we take 73 27 less two to three percent that exit might be 7107 assuming a 3 stop loss below that support well let's go back in and do that i'm going to change single order to first trigger seq right click on that line create opposite order now we're making the exit conditional upon the stock price we're just going to set the stop or the exit okay market gtc we're going to click on the gear and now what we're going to say look me if you get at or below the price of about 7107 which would be below support exit the position now the position profit loss wise is really going to be mimicking as if the investor owned the stock now if that's what the investor want to do they could save the order 7107 is the exit if it went or blow sell the call buy the put back we see that and the commission there is a dollar thirty because it's buying the call and selling the put the comment from a riff says could we actually also do it maybe like a short vertical put to decrease the buying power effect absolutely we talked about that yesterday and each week on wednesday we discussed that that's an option absolutely especially if we're in an ira account by doing this the investor is really trying to not still get the same stock exposure but not really in this case outlaying seven thousand six hundred fifty dollars okay now if the stock actually went up to let's say our area of resistance like 81 40 or 85 could they actually sell those calls or buy the put back prior to expiration absolutely that's up to the investor's decision okay now i'm out of my time here today what i want you to do as a takeaway okay is i would like you to for example make sure that you've really taken a really good look at what i posted on twitter and be up to date with some of the recent scripts and also some of the scripts that are really of interest to you i want you to think about what this is think of it like a menu okay and a restaurant you don't read the whole entire menu you pick what interests you the most so if you're interested in price performance go look at the top if you're interested in relative strength look in the middle if you actually want to see potential entry setups look two thirds down if you actually want to see for example crossovers look down near the bottom so think of it as this is just one page where it's probably going to answer a lot of investors questions about how they could script or screen for that potential now also remember that in in the uh in the chat there is a survey if you could click on that it's a quick four or five questions please fill that out i read those q uh read those comments i want to also thank michael keely for answering those questions in chat thank you for your comments your questions and your participation keep an eye on the nasdaq that's going to be something to watch and see if we actually were to break down below support have a plan in place make sure that you've actually reviewed your stocks also go back and look at what we talked about last week as far as a visual way to move up stops as well remember with what we demonstrated here today we demonstrated the function of the platform we use actual symbols with a paper money account make sure that you watch and uh review what i post on twitter right at the top make sure you've actually have those scripts and you know how to put those on and you practice with those stay tuned for our next webcast coming up just shortly you enjoyed today's session reach out and just smash that like button and again thank you so much for your comments and your participation uh as far as tomorrow i'm gonna be on twitter this afternoon be on twitter tomorrow post educational examples check those out and uh stay tuned for our web next webcast coming up just shortly thank you so much take care bye

2021-07-22 05:31

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