6th day of $QQQ short term up-trend; FB climbs after green line break-out–writing covered weekly calls on FB and GLD


All of my indicators remain positive.

Given the strong market up-trend, I am looking for some stocks in strong Stage 2 up-trends which have recently broken above their green line base. Facebook (FB) is a perfect example, as this weekly chart shows.

FBweekly02182014FB broke above its green line top (all-time high base of at least 3 months) in September, re-tested that line in November, and now is in a nice up-trend.   Also positive is that FB came public in the last 2 years and has   earnings that are increasing at triple digit rates. I bought some FB and sold weekly   out of the money calls on it.   I am content to collect time premiums for FB that equal   more than 1% each week.   Writing weekly covered calls on stocks and ETF’s appeals to me because the position lasts only a week and can deliver large time premium income. Every Friday I can   reassess whether I want to repeat the trade again.   Alan Ellman and I will be doing a   workshop on covered calls for the DC Metro AAII Chapter   in July. Alan’s books, listed on the lower right of this blog page, are a great way to teach oneself about covered calls.

I am also writing covered weekly   calls on the gold ETF, GLD.   Gold looks to me to be in the beginning of a   Stage 2 up-trend. Check out this weekly chart. GLD is now above its critical 30 week average. It will be in a full Stage 2 up-trend if the 30 week average (red line) curves up. Meanwhile, I am content to collect time premium income each week.

GLDweekly02182014Click here for a CBOE list of weekly options on stocks and ETFs.

Here is a short article about the technique.

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