10,000

I'm not talking about the DOW...I'm talking about how much money you should have made today. We broke through all the resistance (and support) levels we talked about yesterday. DIA, SPY, QQQQ, and Oil all broke above resistance. The VIX and the dollar broke their support (although the VIX rallied back up the the support/resistance area at the end of the day...I'll address this later). Most sectors were up which means that most (if not all) of the stock picks over the last few days have gone up. Like I said the other day, I loaded up ahead of the move in anticipation of a breakout. Because I was aggressive, I was able to participate in the gap up this morning. Financials did lead the way...as I mentioned yesterday...and they should continue to move with C, GS, and BAC reporting over the next few days. The market should continue to move up tomorrow with GS and C reporting in the morning and GOOG, IBM, and AMD reporting after the bell. If GS and/or C don't shine, the market may pull back a bit as investors take some profits. If this happens, look at it as a possible buying opportunity or a second chance to get into the trend. If you haven't gotten into anything by tomorrow (if we go higher tomorrow), just continue to sit on the sidelines. There comes a point where you begin to chase the trend and it sets up bad reward to risk trades. You can buy some breakouts, but stick mostly to the trade management technique I taught you (or will teach you) in the course. Most traders buy breakouts when they are late to the trade or they just don't know how to recognize and trade ABC patterns...or they are waiting for additional confirmation which is what we have done sometimes in the past. The VIX spiked up a bit at the end of the day (back up to the support/resistance area at about 23). I think most of that was due to a rush to buy protective puts on the breakout. It shows that the institutional investors are still a bit worried as to how far we can keep going up...but it doesn't signal any panic. The protective puts are relatively cheap right now so it only makes sense to buy that protection. It also puts my theory (October 2nd posting) on hold for another month as the institutional investors were able to buy cheap put protection for another month...we'll see what happens in November.

Some students have found nice patterns in the past. If you find a pattern that fits the trend criteria that I taught you in the course, e-mail it to me and I'll see if I can post it on the blog. The rule is that it must fit the course criteria and I must like it. I don't want to post something that I don't have confidence in...I can't...I have a responsibility to the Followers. However...if I do post the pattern, I will give you full credit for the pick...well almost full credit...just first name and last initial. You can e-mail me those patterns at jerry@myoptionmagic.com. Alester R. found the RIMM pattern a month ago that made about a $10 move when it broke out. That was before the drop that followed...but we were out of most of the trade by then. By the way Alester, I'd like your success story from that trade...that is if you traded it. I hope you did.