OA BUY: $WEAT

Wheat prices are starting to firm up. We’ve been discussing this and a few others such as Corn and Coffee last week in After Hours with Option Addict.

More later,

OA

A few failed rallies, and a failed gap up. In this context, this move here you are seeing today usually gets bought.

I picked up $DIS calls and am moving into $V right now.

More later,

OA

This was close enough to the lower end of the developing range we’ve been following.

Last week we wanted to buy a gap that failed. I managed to pick up Russell futures at 1030 yesterday and sold them for a nice gain this morning.

If buyers show up, I’ll dip my toe into some quality: $DIS, $GS, $V. Let’s see if we find buyers or not.

OA

Shares of Lululemon Athletica Inc. (LULU) jumped in Monday’s extended session after the yoga apparel company raised its fourth-quarter outlook for both revenue and earnings due to a strong holiday sales. The company said it now expects revenue in a range of $690 million to $695 million versus its earlier guidance of $670 million to $685 million. Lululemon also increased its earnings-per-share projection to 78 cents to 80 cents from 75 cents to 78 cents. Analysts surveyed by FactSet are forecasting revenue of $679 million and EPS of 77 cents for the quarter. Shares rallied 6% in after-hours trading.

We didn’t see much of a gap up to start with. I was hoping it was a more significant gap, that drew in buyers, to get a good fast flush. None of this action has been capitulatory in nature, so until then I expect more of the same.

The $NYMO sits at -73 here today. No divergences at all to speak of. Simple grind lower to find buyers, and no buyers exist yet.

As discussed, the /ES profile is thin between 1880 and 1910.

Will float a few more headlines here during the day, but at the moment I have nada on my radar.

OA

I gave a nice long speech in After Hours with Option Addict today. I shed a few tears, rallied the troops, tried to provide a little comfort and laid out some important thoughts about where we are, and where we are going.

Then I realized my fucking webinar didn’t record, and I left a good percentage of folks without a session to listen in to. So for that, I will recap.

We started the week with this chart and laid out the following market range. This is important, because of the trend implications…obviously:

After 07, I didn’t start investing again til 2009, like most others. I added investments in fall 2010, in late 2011, a select few in 2012, a few more in 2014, and a few here in the fall. From an investment standpoint, you don’t get fearful of these volatile moves, you appreciate them when thinking of the next 3-5 years.

I mention that because when I started investing, the idea was to play the trend until it fails. This is why I yelled from the top of my lungs to buy the market a few months back….but as we approach next week, price action will test the overall trend. Maybe we repeat 2008, like many are predicting…

Maybe it fails. Maybe it holds. But until you are certain, you should try not to let short term activity dictate your investment plans that are measured in years.

Traders are so inundated with information now days. Most of it pertaining to short term this, and short term that. Trading psychology is completely skewed to short term, and this psychology comes to a head during market volatility. People are quick to move on these knee-jerk emotions. Not I. I’ve learned that if I do this, it has a tendency to destroy wealth rather than create it. Times like these are when wealth is transferred from the impatient, to the patient.

As we approach next week, the trend holds, or it fails. My investment plan has always been to trim/cut investments when the trend fails. Heading into next week, if the trend fails, I will make some adjustments to my investment portfolio. If you’d like details, I will list them in the chat below.

We discussed trading in bear markets. The good news is that if the trend fails, you aren’t too late. There will be many moves to play for in the months to come. It’s crazy stuff, but like we laid out in August,

We also discussed the Global Inflection points I blogged about recently. We looked at the charts, all of which have traded into August-September balance…not beneath them.

If you are in the mood, travel back to late August, just to recap the commentary from the weeks after Monday August 24th. Recall all the bullshit in your twitter streams, news headlines and market commentary you were told then, and watch how the market behaved.

That same approach will be used again, starting on Monday.

Rest up this weekend. I will have a lot to talk about next week.

OA