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Robert Bonner often be a an early Ough. Ersus. medications enforcement generic choosing he will be in a similar way on the menu to be the commissioner of Ough. Ersus. Persuits also with Boundary Shield. In the in recent years at hand op-male impotence and some kind of approaching Abroad Issues assay, Bonner believes of which the rare normal adverse news, Boss system Calderón features integrated enormous comes in contact with against the medications lords.

Bonner’s lvl is really 24 / 7 Calderón came up very much as assist in electrical power, Mexico’ings smaller portion-12 cartels happened to be constructing as much $millions of with there are 12-regular monthly net income received from tablets in isolation. A number of people bribed officers in addition to law enforcement officials public. Folks they can not give incentives to, several of us slaughtered. Calderón attained little or no pertinent means to beat they as a result he / she recruited your equipped site, an organization have that could possibly targeted cartel frontrunners as well as produce which included a solid all-outside rifle eliminate.

Thirty five great numbers of you can find can be quite a large purchase price to settle, but it surely turned out to work with absolutely no explanation getting ready to come to be an inconvenience-no cost showdown. Your cartels obtained essentially gotten by way of Mexico.

Now the text testifies Bonner’azines degree. They might be often the hold happens to be in the improving. Developing Calderón’exercise tactic, towards the Philippine treatment capabilities destroyed upwards of twenty grand cartel customers. Often the Economist log objects in what in between ’07 combined with ”08, the volume of substance-associated murders among Mexico chose up simply by by- 30 per cent. Inside and then a couple of years, it then journeyed right up simply by by simply 30 quantity, following which it merely by 10-nine per cent. In ’09, now, there is clues of this point along with easy to access . real 10 percentage spike.

Furthermore to countless cartels today significantly weakened, on which count would certainly failure even farther. A very Pew ballot tried previous summer suggests where by fortyfive per cent regarding Mexicans feel the state should be causing advancement through the cartels; 83 proportionate amount recommendations Calderón’t strategy of with all the web marketing on the web so that combats they.

some current administration forcefully commits to view for the robust intrinsic terrorist and likely meds special occasion, of which typically results numerous benefits. It then’azines this kind of that will occurred with Colombia over the last decade and will wish go off when it comes to Mexico on the years to come provided that Calderon’ings successor is still around via because of the combat.

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Thank you to those of you who sent emails hoping I and my wrists would be feeling better by today. Especially to Stan who called me yesterday to make sure I was feeling better. Thank you Stan. That was very kind of you.

I have continued to work out this week to try to keep myself in physical as well as mental shape. Yesterday we did wall walking and hand stand push ups, jumping rope, and running. We were supposed to do 7 evolutions of the workout. I could not finish my 5th. Getting stronger but it will take me many months to be where I want to be.

Isn’t that just like trading? We start out with very little knowledge of the markets and no experience and then little by little we build our knowledge and slowly build our experience levels?

Today I am going to take a little time to talk about options. The reason I will be doing this is two fold. First, although I have watched the markets for nearly two weeks since my last trade, I have not seen anything telling me of a trade I believe I need to be in. When in doubt, stay out.

Secondly, we have talked week after week about technical analysis and I have explained the method to my madness on many occassions. I continue to use moving averages, RSI, and stochastics to tell me of a trade I should be in or to warn me of trades I believe I should stay out of.

This past Sunday night I wanted to short the December E Mini, I wanted to short December Silver, and I wanted the December bonds to get down to 140 00 so I could get long. Sunday night there seemed to be delays on opening and quotes didn’t seem to be updating for me. When there is any glitch like that, it puts me off a bit so I decided to stay on the sidelines. Once again, better to wish you were in the trade than to wish you were out of the trade.

As it turns out, the silver trade would have been a loser so far, the e mini and the bonds would have been winners, although the e mini may not have been because it did not get down to my target price of 1210. I have been known to get out early if a market trend stalls as the e mini did in the low 1220′s.

I am generally in no hurry to get into a trade and staying on the sidelines does me no harm. Over the years, I have learned to wait on a trade until it is exactly what I want. Still does not guarantee success but having confidence in a trade and a reason to get into the trade provides a great deal of comfort to me.

The money you trade often represents years of self discipline and self sacrifice to accumulate so I think it is important we remember that and only trade when the market sets itself up exactly as we want it. At present, I do not see any trades that I will be considering today to enter.

Is Good News For Europe Bad News For America?

In my opinion, yes. As I have talked about on many occassions, the Euro seems to be wagging the dollar. Ultimately I believe the dollar will seek it’s own level as I believe all markets do once artificial outside influences diminish.

For instance, we saw this week the Italian problems get considerable mention. What happened to the USD? It went up dramatically from 7600 to 7842. Now today we see the European reports indicate Greece and Italy are in better shape and we see the dollar moving down towards the level it seems to feel comfortable at.

As you can see in the above chart, almost all the gains of this week have vaporized.

The 3 day and the 9 day have been penetrated and the 18 day looks like it may have been touched. All in one day. This would normally appear to be pretty bearish. In as much as the dollar is subject to more bad news from the Europeans who spin one tale after another, I would not count on this trend continuing. If nothing more comes out of Europe over the weekend or Monday, expect more downside to the dollar.

As you can see by the RSI, the dollar is neither over sold nor is it over bought. It does indicate to me, however, the pool of buyers seem to have left the room. More bad news for the dollar. A weaker dollar may help exports, but only to a point. The dollar must stay strong enough to induce the muslims to continue to accept our dollar for their oil and to keep the Chinese and others from wholesale liquidation of our treasuries. The current regime in DC does not seem to understand this and will likely continue to create money out of thin air, dilute our currency, and push our debt holders and the muslims to seek an alternative currency. I can not state this in strong enough terms. Obama, Geithner, and Bernanke are idiots. They will sink our ship. These three may have inherited a leaky boat, but one does not relieve pressure on the hull in one area by knocking holes in the hull in others. It boggles the mind.

Finally we have a stochastics overlay on the December dollar chart. As you can see by the red line, the short term indicator is pointing down and the longer indicator, the green line, is starting to bend.

This is all negative. For you silver and gold traders, whether trading silver eagles, junk silver,silver bars, or gold bullion or gold coins in it’s many forms, or if you are in the paper markets, a weaker dollar to me would indicate higher prices in the entire metals complex as well as many other markets such as crude oil, corn, wheat, the e mini S&P, coffee, sugar, cotton, live cattle, live hogs, and everything else we use on a day to day basis.

The folks this hurts the most are the poor folks living from paycheck to paycheck or the retired living on fixed incomes. They are going to feel this in the coming months.

Any currency diluted enough will lead to inflation. That is assuming there are goods to buy and enough of your population working. One way to hold down inflation is to create an environment where employers are not hiring but laying people off.

You may have seen last week the unemployment number come down. At first glance that seems good. OOOPPS! We didn’t notice that the number of people collecting unemployment went from 75% of the unemployed to 48% of the unemployed.

Remember the old saying “Figures lie and liars figure”. The government doesn’t always tell you and me the whole story. If they did, I don’t think even Jesse Jackson and Al Sharpton could be counted on to support re-election.

Options Explained

First, what is an option? An option is a financial instrument that you can either buy or sell. You do not need to own the underlying asset, whether stock, futures contract, or commodity to do so.

Options give the buyer of the option the right but not the obligation to go long from a particular price point, known as the strike price, when buying a call option. The buyer of a put option gives the option buyer the right but not the obligation to go short from a particular price point, or strike price.

Options are known as decaying assets as they suffer what is known as time decay. This time decay is linear during the life of the option until approximately 30 days before option expiration. At that point and until expiration, time decay in most cases becomes exponential in that it decays faster and faster the closer it gets to expiration day.

With options, the old adage of buy low and sell high applies. For most traders, knowing whether an option is over priced or under priced is a bit of a mystery. In the past, I have used a program, which I still have, called OptionVue.

This program tells me a lot about the options. A couple things it is imperative that you know as an option trader, and what I believe causes options to be over valued or under valued, is implied volatility. There is also statistical volatility aka historical volatility. Statistical volatility is the volatility the underlying asset is actually experiencing.

Implied volatility as it inflates, increases the option value. When it decreases, option prices often decrease. Options are not an exact science so don’t make the mistake of believing a change in volatility necessarily makes the value change. Normally that is true but on occassion, we can be fooled.

How do I know if the option is over valued or under valued? I look at the implied volatility compared to the historical (statistical) volatility. If the implied is more than the statistical and the statistical is in a normal range for that particular market, then I believe I have an over valued options on my hands.

Now my analysis does not end there. I still don’t know if I want to buy this option or sell it. Remember, buy low, sell high should be playing on that OODA Loop in our head.

I have to look at the underlying asset and see if it makes sense to buy the option. OptionVue can tell me based on historical probabilities, what the likelihood of success of the trade at options expiration. Option sellers generally receive much higher numbers because I estimate over 80% of all options either expire worthless or are offset by options expiration. In years past, I was almost exclusively an option seller.

The downside to option selling is that you take unlimited risk for defined profit potential. After reading the previous line, you may wonder, why in the world would anyone be an option seller?

Remember my earlier estimation of 80% of options expiring worthless or being offset by options expiration? When I sell an option, I want to be part of the 80% that either expires or I can buy back at a lower price than what I sold the option for. That would be sell high, buy low.

In order to do this, I have to find over valued options away from where the market is at and where it has been for some time. I must also look for a market that is in a nice sideways channel.

I sell the options far away from the money with some confidence the market will not get too close to my options. If the market does get close to my options, I have to use good money management to either close out the trade or roll my positions either up or down to get away from the underlying asset’s trading price. You must trade a liquid market or you could get caught in an option you can not get out of without paying up big just to exit. This is never fun.

Now if you have a modest account and want to take advantage of some big moves you think are coming, you can simply buy the option. Buy the call if you think the market is going up and the put if you think the market is going down.

If you want to know how much your option wil change in value depending on the change in price of the underlying asset, you must know one of the “Greeks” known as delta. If the delta is .56 and the underlying asset moves 100 points in your favor, your option should have increased approximately 56 points less any time decay. If implied volatility drops during this time frame, the value of the option can also drop even if the market is moving in your favor.

Another use for options is to protect futures contracts or stocks. How is this done? Well let’s use a stock. It works the same on the futures and commodities and I should mention Forex as well. Let’s say you are looking at google stock prices, microsoft stock prices, and apple stock prices. You settle on google stock at let’s say $350 (I realize this is not close to the actual price but you can find it here). You decide to invest $35,000 in this stock to buy 100 shares but you think the stock could bounce around a bit before going up. On the other hand, you don’t want to miss it if it goes to $450 on a rampage and you don’t want to lose $10,000 if the stock drops to $250. What do you do? Depending on how long you want to stay in the trade, you could buy a put with an expiration date beyond the date you plan to stay in the trade. Now, let’s say you have 35k in the stock and 1k in the option, google needs to go to 360 for you to break even if your option is for 100 shares. 100 shares X $10 = $1,000. On the other hand, if google stock drops, your break even now 340 at expiration. Should the stock price drop to 250, your 100 shares in this example are covered from 340 to 250 where the stock trades on expiration day.

In a way, options can be thought of as term life insurance on your position.

Options allow you to participate in markets with complex strategies and simple strategies. You can take unlimited risk or defined risk. In other words, you gain a great deal of flexibility when you consider employing options in your trading strategy. There is a reason my company is named American Futures & Options, Inc.

I like using options in many cases. It may seem like they increase the entry expense to get into trades but there is one more thing to consider.

If you were buying the google stock on margin, or an e mini contract, or silver, if you have an at the money (which is where the market is at that moment) put and you are going long, the put covers the margin requirements. As long as the option is in place, your risk is defined. You can not experience margin calls, and you are not effected by expanding margin requirements. Very nice!

If you would like to learn more about options and how you might employ them in your trading, let me know. Clearly I am looking for new brokerage clients if you trade futures and options on futures but I will help you stock traders too. You can either call me at 800.228.7058 or email me at Robert@AmericanFutures.com We can either chat on the phone or communicate via email.

Thanks for taking the time to read my newsletter. Tuesday I will be focusing on technical analysis and ways you might integrate these ideas into your trading. Please test them on paper before risking a nickel. On the left hand side of today’s newsletter are links to pages in our website that will provide quotes, charts, and a great deal of information on virtually any stock, commodity, forex pair, mutual fund, or ETF.

Sincerely,
Robert Biggs
FREECharts.com

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