Trading RM, LLC.

Great job today by all our traders, followers on twitter, and users of Trading RM Real Time who got into gold names, specifically ABX. Check out our tweet pre open today:

"TradingRM trade off the open. short $ABX on a bounce back and hold under the 45.45 level $$"

Below is a 2 minute chart of ABX. The thick blue line shows our entry level from this morning's tweet.



Below is a video screen shot of the opening few minutes. The shot is a bit blurry, excuse us as we work on video quality. Please click on video and make it full screen for optimal viewing.

• The top right shows out Trading Rm Real Time Chat room. This is available to outside traders. Notice the buys of ABX puts and the timing. (It is noted as +ABX P MM, trader MM bought ABX puts).
• The bottom right shows and options entry window with time& sales to the right. (we pull up the ABX 45 puts to start.) Our first entry was $1.60. When we pull them up for the video they are trading $1.70. As of 12:45pm the high of the ABX 45 puts was $3.40.
• The top left and middle of the shot shows various time frame charts of ABX.
• The bottom left of the shot is an "option chain"
  
  
  
  Followers of our twitter feed and users of our Trading RM Real Time were able to see our ABX idea before the open and see our ABX trades real time from the open of trading on.

We encourage all our readers and users of Trading RM Real Time to follow us on twitter: (@ tradingrm). Throughout the day we post trade ideas, news stories, and other items important to traders. Every morning we post trades ideas for the day. Check out this mornings post at about 8:15am cst:

Mid day update: today we saw one of our favorite trade set ups in AIG. Some simple characteristics that got us involved in this trade:

• Break down on daily chart. Below is a daily chart of AIG going back to March 2009.

• Intraday relative weakness. Check out posted chart, SPY (in red) makes a move up of the open (highlighted by the channel). AIG (in green) shows no sign of strength. This is a great timing mechanism. When market/SPY roll, AIG accelerates to downside.

• AIG is a name in play and on people's radar.



• AIG options trade in pennies, which is one thing Trading RM focuses on.

Sometimes the simplest set ups are the best ones.

As a followup to the CL video here is a similar video of a trade some of our room did in GWW on Wednesday 11/18/09. As with the CL trade, this video shows our interns screen. The top right is our Trading RM Real Time product (available via AOL IM). The bottom right of the screen in briefing.com. The bottom left of the screen shows our options view.

The trade involved a move in GWW after it announced guidance and a buy out of Alliance energy solutions in an all cash deal.

As you watch the video please note the following times and actions:

• Time in video 0:00, the GWW 100 puts are 0.85-1.00. We also see first headline on briefing.com posting that GWW is announcing guidance. At this point the major news services had only announced GWW guidance, but did not mention the buy out of Alliance Energy Solutions. The guidance was in line, but the price action told another story. We noted the price action and were ready for a trade.
• Time in video 2:14 trader AE buys GWW puts. (+GWW P AE). Put market is 1.50-1.55
• Time in video 2:52 trader AE is out of his puts. Trading $2.00 and higher at this point.
• Time in video 4:16 our traders see an opportunity to get in GWW for another trade. GWW 100 puts roughly offer $1.90.
• As the video ends the puts are bid 2:20

This week my trading has lacked the rhythm and fluidity that I often look to establish during the day. For one reason or another my decision making has been disconnected with my execution and outcomes. Over the course of a trading career, this is inevitably going to happen from time to time. The key to dealing with this situation is how one responds going forward.

After "battling" this week, I decided to take a step back at my desk mid day. This provided me with an opportunity to refocus and rebalance, while reviewing my trading. Throughout this time I continued to stay alert and ready for any opportunity in the market that would present itself.

Fortunately, one such scenario came late in the day with CL news (potential takeover target). I was able to recognize that this was a play worth getting involved in. More importantly, this trade allowed me to get back on track, to focus on a setup that is good for me, and bring me back in tune with the market.

At TradingRM we like to say "all it takes is one good trade." One good trade can get a trader back on track, recharged, and ready for the next stretch of trading. This is what I will be doing going into the final two days of this options cycle.

Thanks to all who listened in to our webinar on Monday. We hope to be having another sometime after Thanksgiving. As we discussed in the webinar, we feel it is better to learn by doing and/or seeing. Our interns have been working hard to capture "how we operate" and how our Trading RM Real Time can benefit you as a trader. Our interns Charles and Jason were able to capture some great setups that we can share with you.



The video below details a trade the majority of our room did in CL on Wednesday 11/18/09. The video shows a snapshot of our intern's screen. To the top left is the ES mini chart. To the top right is our AOL IM based Trading RM Realtime product. User "trmdata" is our clerk. The chat room "TRM" is Trading RM Real Time. Outside users view this chat.



The bottom right of the video shows briefing.com news feed. The middle and bottom left sections show 10 minute, 5 minute, 1 minute, and 30 minute charts on any given stock.



Keep in mind that while there is no sound with this video, our interns our talking through all the aspects of the market (volume, trades buys and sells, news, etc..). This is available to outside users via our Audio Clerk product.



The specific trade involves speculation that Colgate maybe be close to being bought or linking up with Lysol maker Reckitt Benckiser Group Plc. As you watch the video please note the following along with their times in the video:

• Time in video 0:00, our TRM chat shows our first trader, AE, buying calls in CL (+CL C AE). Time is 1:57pm cst


• This news hit Trade the News around the same time, 1:57pm cst.


• Time in video 0:03 our intern pulls up CL charts, we can see CL sharply higher.


• Time in video 0:021 we see more traders buying CL calls. Unfortunately this video did not capture our order entry window. (Future videos will) Our purchase price was roughly $0.35 on average.


• Time in video 0:34 trader AE sells his first piece of CL.


• Time in video 0:50 briefing.com posts CL/ Reckitt merger news. Our Trading RM Real Time and our Trading RM Audio clerk announced this news earlier. Our first trader (AE) was in and out of some of the trade by the time briefing.com posted.


• As the video passes the 1:00 mark you can "feel" our traders starting to scale out of their winners.


• At the 1:40 mark our intern pulled up an option view for CL (bottom left of screen). Note the CL 85 calls are trading 0.75-0.85. (Again, future videos will show option prices and trades from the onset). Although we purchased at $0.35 there was still a trade to be had.


• Time in video 02:16 we see trader PG has reentered long CL calls. (+CL C PG)


• Time in video 03:22 "last price" on these calls was $1.90. If you got in with AE and our first traders you have a 600% return at this point. Even if you were "late" and paid $0.80 you have over a 200% return.


• Again we see guys finding an opportunity to reenter the trade. Time in video 05:03 a couple guys buy calls again. Prices approximately $1.75.


• Time in video 05:25 the bid on these calls is $2.40. (more sales by our traders around that price).


• The last minute of the video you can "feel" the volume in the stock and options die a bit. Most of our positions were sold before the last minute.

The main point here is not to do every trade we do when we do it. But users of our products (RealTime and Audio Clerk) can generate a feel for the market and a feel for trades in play. Not only were our traders and our external users of Real Time first to this trade, we were also selling at optimal times and reentering at optimal times.

• Gap up post earnings


• approximately 10% short interest


• Mini breakout on daily chart


• Home builders have performed after earnings (see BZH yesterday)

If you click to enlarge the picture at the top right of this post you will see how our room approached this. On the left side is a copy of our Trading RM chat, available through Trading RM Real Time. Our trades are put into this chat real time for our subscribers to view. To the top right I have added a 2 minute chart of TOL (in green) against SPY (in red). The bottom right is a daily of TOL showing the breakout of its mini consolidation around $18.00.

As you can see we were accumulating TOL long between 8:35 am cst and 8:52am cst.

During this time the SPYs (in red) were in a mini down move. This is highlighted in the top chart by the blue channel. Further down in the Trading RM Blast you can see our traders exiting this trade profitably as TOL accelerates up from 9:06am cst through 9:20am cst.

Some of our traders also found support in TOL at $21.00 and entered long later in the day with the overall market weak, but TOL showing some support. I underlined this $21.00 level in blue.

Please visit us here or at http://www.tradingrm.com/ for more information about Trading RM.

A real quick snap shot of a RIMM set up I saw today. We saw futures spike post ISM #.

The S&P futures are in red on the top chart to the left. I circled the spike in the S&P price post ISM.

At the same time RIMM (in green on top chart) was weak. RIMM was -$4 on the day. RIMM had absolutely no uptick with the market.

Below we see the daily on RIMM. I am an amateur chart technician at best, but it is clear there is the gap to fill on this chart. So we had a weak stock, divergence with the market, and confirmation on the daily chart. When the market sold off RIMM accelerated a bit to the downside. I like the percentages with this set up.

Early morning offered a decent set up for a select few short trades. We saw the major indices catch a bid early a.m. MA, V, LVS, MGM, WYNN and several stocks initially seemed strong. But 20 minutes into the trading day we saw the SPX make new highs with the leading stocks on the open not confirming. The Nasdaq was also not confirming highs. Meanwhile several names (AKAM & SYMC) remained weak.





SYMC ended up dripping lower all day and picking up some acceleration lower as SPX sold off in last half hour.