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Expert technical analysis of financial markets by JC Parets

A New Plan For Trades Ahead of Earnings

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One of the areas I’ve identified where I can improve my trading is in trade selection. Specifically, my trade avoidance.

Due to my early trading experience as a stock trader, it was ingrained in me during my formative trading years to avoid positioning in stocks that are about to announce earnings.

And for good reason.

Once a stock trade is on, our only real defense against punishing losses is to have a stop-loss order working. That’s fine if you trust yourself to always honor your mental stops. But for most of us mere mortals, the good-til-canceled stop-loss order is our best protection.

99% of the time, a stop-loss order works as intended. Sure, we might suffer a little slippage here and there. But it works like a charm in preventing disaster. Especially for intraday trades.

But for overnight holds, a stop-loss order has its limits. And these limits are fully exposed in the event of a binary news release – most notably earnings announcements. [Read more…]

[Options Premium] Adding a Little Short Exposure

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Don’t let today’s headline scare you. I’m still bullish overall.

But with the S&P500 still bumping its head against overhead resistance, it wouldn’t hurt to provide a little ballast for a mostly long portfolio here.

So with this in mind, I’m putting on a bearish trade in a stock that has not been participating in this bull market, and will likely continue to push lower as long as the broader indexes keep struggling here.

[Read more…]

[Options] A Hedge Against Spending

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Today’s trade is in a name that many American shoppers are familiar with.

You’ve probably seen TJ Maxx stores everywhere, frequently located in strip plazas throughout the suburbs. And there’s a good chance your family has dropped some loot in there, taking advantage of the deals they are famous for.

JC commented today that he’s invested in $TJX in his long-term account as a hedge for his wife’s spending at this store. I think many of us can relate.

But what’s got me most excited about this setup is the recent base just below $100, which would be an all-time high. Around here, we call that the hundred-dolla-roll, and it’s one of my favorite setups: [Read more…]

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