This is the video recording of the October 2019 Conference Call for Members of All Star Options

This is a question I get a lot from friends and family or someone I just met that knows what I do for work.

What's funny is that they don't ask it quite like that. They won't ask, "JC how do I make money in the market?", even though that's what they really mean to say. It's usually more like, "Which pot stock do I buy?" or "Which Crypto Currency should I buy?", depending on where we are in the cycle. It's rarely an IF, and more of a Which One?

The way I see it, you can add the same amount of money every month for decades and just let it compound. If you're disciplined enough to do it (most of you aren't), I can see a good case for that strategy. But if you're looking to get into more specific trades or investments, I think a well-defined risk vs reward strategy is the only way to profit. If you can't manage risk responsibly you'll be gone soon.

Here's my take:

From the desk of Tom Bruni @BruniCharting

New Mystery Chart!

For those new to the exercise, we take a chart of interest and remove the x/y-axes and any other labels that would help identify it. The chart can be any security in any asset class on any timeframe on an absolute or relative basis. Maybe it's a custom index or inverted, who knows!

We do all this to put aside the biases we have associated with this specific security/the market and come to a conclusion based solely on price.

You can guess what it is if you must, but the real value comes from sharing what you would do right now. Buy, Sell, or Do Nothing?

From the desk of Tom Bruni @BruniCharting

The TSX Composite Index is attempting to hold above its 2018 highs after breaking out earlier this month.

In early August we wrote a Canada Update for Premium Members outlining ideas (and another post 2 weeks ago), many of which are working well, however, we're following up on this post today with a stock on our watchlist that's become actionable.

Nothing will frustrate stock market bears more than European Stocks breaking out to new all-time highs!

Do you know anyone who has anything positive to say about European Equities? Are conversations you're having and articles you're reading preaching strength and growth out of this area? I don't.

Prices, however, are telling a different story! Let me point you to the WisdomTree Europe Hedged Equity Fund, which prices European stocks in local currency. This is similar to the $DXJ vs $EWJ Funds in Japan.

The way I see it, this looks like a consolidation within an ongoing uptrend and most likely the beginning of a NEW uptrend, and not near the end of an old one:

Stocks in the U.S. Financials Sector have been underperforming since the beginning of 2018. If you recall, that is precisely when the majority of stocks around the world stopped going up. It's been a sideways grind for many stocks and sectors since then and a solid downtrend for many more, like small-caps, emerging markets and certainly financials, particularly on a relative basis.

A funny thing happened last week, however, while the gossip columns were filled with impeachment talk and upcoming recessions: Financials broke out to new multi-month highs relative to the S&P500. But not a whisper about it anywhere. I like that!

Ok, today's title is a cheeky play on the ticker symbol I'm trading today. I couldn't help myself.

Today I'm getting into a low conviction trade, but shifting the probabilities in my favor so that even if I'm wrong, I still have a good chance of reaching my profit objective. Pretty sweet, right? This is one of the many reasons I like trading options.

It's that time again where we start heading into the next monthly expiration cycle and I review any options positions that remain open which might require some adjustments, monitoring, or closing before we get too close to expiration.

The October expiration cycle has been good to us. At the time of this writing, I've already closed two positions that hit my stop loss levels ($NKE, $DE), and two others that hit my profit objective ($GLD bull call spread, $PHM bull calendar spread). And as usual, the bulk of profits for this cycle came from just a couple trades.

These are the remaining open October positions that need some monitoring:

During the course of my day-to-day engagement with the markets and market participants, including subscribers to All Star Options, I'm often asked my thoughts about how I would manage some position that somebody is in. Usually goes something like this:

Sean, I've been in this inverted double reverse downward dog position and now I'm losing money. What should I do?

Ok, so I made up the name of the position, but you get my point. People do weird things and they are looking for help.

One commonality I get from people engaging with options is that they bought long-dated calls (sometimes Leaps) in stocks they are bullish on in lieu of buying stock. And they got lucky -- real lucky. So lucky in fact that they are sitting on enormous open profits on calls that are now WAY in the money.

But this has them in a bind.

They want to continue to participate on the upside if the stock has more room to run, but they are scared to death of losing any part of their open paper profits. It's getting to a point where they are paralyzed with indecision. I've been there. I know...

I've been following the work Willie Delwiche for years. As both a CFA and CMT Charterholder, I think it helps him really put things in perspective for the Advisors he works with at RW Baird. I really enjoyed the conversation we had about the markets and his process. Willie incorporates a number of breadth and sentiment measures that I've always been a fan of. He helps the Investment Advisors at the firm work with their clients and manages several portfolios as well. In this podcast episode we discuss a number of different things...

In this Episode of Allstarcharts Weekly, Steve and I make the bear case for US Stocks. I think we've been pretty clear about the fact that we believe stocks resolve this consolidation since 2018 higher, not lower. But I always think it's important to take the other side and consider the alternative. What will the market environment most likely look like if we're wrong, and we should be selling stocks rather than buying them. I think we brought up some good points here.

Sometimes, the charts set up where one could make a case for a consolidation being on the cusp of breaking out. One such beleaguered company appears to be doing just that. If there's any follow through, there is blue skies ahead and I've got a play lining up on the runway to take advantage of the tailwind.