Trading the Trend

Hello and welcome to Trading the Trend. My name is James Boyd. We welcome all of you here today. Got Brent Moors in the chat, fellow instructor as well. We got Rick, Michelle, Mike, Grace, Eric, Ocean Life, and many others. Welcome to all. Hopefully you've been staying out of that snow. I've been trying to stay in as much as possible. I don't want to get sick. So January in the month of Utah, you just try not to get sick and frostbite. So anyway, summer's coming soon and spring break for some of you that need to kind of look ahead. We're grateful for the cold weather. That way we have water, some snow in the mountains, and we have water in the summertime. So there is a purpose to all this.

Quick reminder for that. But some of us like it a little warmer. I understand how you feel. Now, just real quick as we get started, remember that Brent and myself, we post education. Content on X. It's just our capital J, capital B for James Boyd, and then CS. Capital B for Brent, capital M for Moors, CS. Quick reminder, Brent or myself or any of us, we don't reach out and solicit anything. If someone does, it's not us. And yeah, you know that there's a fake James Boyd, a fake Brent Moors, et cetera. So we just post educational content and announcements. Schedule updates. Quick reminder: When we talk about stocks, we will mention stocks here today as we have a number of examples we need to look at.

Also, when we talk about options, remember that options carry a high level of risk, not suitable for all investors. The information here is provided for general informational purposes only. All investing involves risk. We will be using the paper money software application known as the desktop version. And also remember when we talk about options, short options or options that you sell, those could be assigned at any time up to the expiration, regardless of the in-the-money amount. Those are known as American-style options, options, not European. Okay. Also, when we talk about options, we want to reference the option Greeks like Delta, Gamma, Vega, and Theta, and know what those measure sensitivity to. And we'll talk about why are those relevant? What are they telling us?

And today, what I want to really do is I want to take a look at just real quick futures. I want to take a look at just real quick futures. We're not trading futures. We just want to look at the futures in terms of some price levels and futures we'll talk about. We'll be like Bitcoin. We'll talk about a gold. We'll talk about some of the other futures like the US dollar, perhaps a little bit, maybe in some currencies there, and also some other ones that we'll bring up like copper, et cetera. Then we'll move to the indexes briefly. And then we'll talk about sectors. We just want to take about five minutes on the front and just kind of get an idea of what is going on.

And then we'll talk about sectors. We'll talk about stocks, indexes, or sectors that could be up near resistance areas. And I want to talk about upside potential targets and or 161 Fibonacci extensions. Now, some of you think this is mumbo jumbo. You know that Fibonacci was a mathematician in Italy. And so we're talking about math here, not just math, fun math! And I want to talk about the stock market. And I want to talk about some channel setups slash V patterns. From there, we'll talk about some of the positions that are in the portfolio. And I just want to kind of look and see how they're doing. Okay. And see if there's anything that we need to consider in managing. So let's go ahead and hop right in.

So first off, I want to kind of start with just real quick Bitcoin. Okay. Now, if you look at Bitcoin, okay. And I remember when Bitcoin was 13 bucks. Okay. Now, back then we thought it was expensive. I can assure you that we thought, 'Man, $13.' I can't believe anybody would pay $13 for this thing. Okay. Now, if you take a look at this kind of Bitcoin itself is in the channel. Now the channel is after a price rally from about 60,000 up to about let's say 93,000. Top end of here, about 105. I want us to kind of pay attention to the lower shadows. Okay. And that lower shadow is going to be the top end of here. And that lower shadow is right there at the 20-period moving average.

And that 20-period moving average shows us that right there. And if you look at today, we kind of saw off a little sell-off intraday and buyers coming right back in near the 20 period moving average. The only thing I really want to bring up on this is number one, it's a channel. You kind of have like a little sideways, if you want to call it a little W pattern as well. If some of you watch some of the crypto names, crypto type of plays, keep an eye on Bitcoin. That one kind of looks like, it might be trying to make that a higher low and try to get back above that 106 threshold. So that's one that we're going to keep an eye on. When we also take a look at, let's say gold.

Okay. Now, if I were to ask you a question, are you bullish gold, bearish gold? Okay. What do you see here? Now, a lot of times gold may go up because there's fear out there. I don't know. I mean, what is fear? False evidence appearing real, right? I don't know, maybe it's in the eye of the beholder. And if you take a look at this, what I want you to kind of recognize is there's been a nice little scoop from 2600 and the moving averages have just been that green color. So if you said, 'What's your favorite color?' Okay, green. Now, your spouse, there's a little joke that someone said to me one time when I was teaching an in-person event; they said, 'James, any money I make or potentially any money I make matches any dress my wife wears.' That's what she told me.

That always stuck with me. I didn't tell my wife that because then she would say the same thing. All right, a little fun there. Now, if we take a look at this, gold, now again, how does this relate to stocks? Well, we would be thinking about, now by the way, when you look at gold, of course we're thinking about gold itself. Something that's tracking the price of gold. Second would be maybe gold miners. Okay, third point would be maybe with that is, well, how do they get the gold out of the ground? They need industrial equipment. Okay, so we're kind of thinking of three things. Number one, what tracks the gold price? Is there a product that does that? Second would be gold miners. And the third would be industrial stocks.

And it would probably be like say stocks like Caterpillar or something like that, that actually is large scale equipment. Now, speaking of that, when you look at that, and I'll just bring this up now, you look at the IXI, that IXI has done a beautiful, okay, little W pattern, a little run up, fall back down, run back down, fall back down. And it's just been green for a while. Now, yesterday we fell down for just one day and then it just fired right back. So the momentum's still being very strong. So when I look at, let's say gold, I'm always kind of thinking about the correlation to let's say industrials. Because you don't just get it out with a shovel. You don't just go bend over, pick up a gold bar on the ground.

You need the machinery, okay? Now, if we also take a look at something else, I want to just bring up, now this might feel a little off, but I'm not sure, okay, about that. But I've been kind of talking about, if you look at, let's say food prices. Now food could be, let's say chicken prices, pork prices, beef, okay? I think Americans, we like beef. Live cattle prices, hitting up a brand new high. You are also seeing feeder cattle hitting a brand new high. That dollar menu at Mickey D's may be getting a little tougher, okay? And many of us might be saying, 'Hey, we might become a vegetarian if those prices keep going up, which would be really, really potentially sad.' Now, if we take a look at the SPX, the one thing I want to kind of point out with the SPX, and I did point this out on X, we've seen this pattern lately.

And we've talked about this, okay? We talked about the setups in the market. And when you get something that breaks below support, and I'm just kind of putting a square around that candle, only to see the price snap back above. I'm going to tell you, I don't see anyone talking about this. I really don't. I think this is one of the most bullish setups that you can get. Now, James, how did you learn about it? I'm going to tell you how I learned about it. Okay? There's two ways that I learned. Number one is this way, which is when a stock or an index or whatever it is goes below support, there are some people that go bearish. They buy puts, they go short, whatever.

And all of a sudden they go bearish only to see the price snap back to the upside. Now, here's the deal. That's not very fun because if you just, let's say, got in, let me kind of draw this. If you just got in, let's say here, and all of a sudden the very next day it goes up, you're thinking, well, it's still bearish because you just put your bearish trade on. And then the price goes up again. No, I'm not going to take that loss. Let's see if it falls back down. You start digging in your heels because you think you're right. Don't just say it was me. It's probably you too. It happens to all of us. And then it goes down and you're like, yeah, yeah, exactly.

I told you I was right. And then it goes up again and it's like, uncle, uncle. Okay. Now all of a sudden, oh my gosh, this hurts. And oh my gosh, it's going up more. There's no way. And then all of a sudden now we're confused because we did a bearish trade below support, made sense, only to see it snap back to the upside. So how did I learn about these types of trades? Easy. I was short. I was doing bearish trades. And I noticed the ones that had violence sometimes moves back to the upside. Where the ones that only fell down below support for one or two days, only to snap back up. Now, usually on the right hand side, it's like a V pattern. Okay. And it goes vertical.

It's like the whole break of support never happened. Now, if you back this off from a daily to a weekly perspective, this is where it breaks down on the weekly chart, excuse me, on the daily chart, but on the weekly chart, it shows a lower shadow. Okay. Guys and gals, I want you to remember this. Okay. That's huge. Now, by the way, you could see the exact same pattern on Caterpillar. Now, if we pull up now, the one thing I do want to say here, if we were to look at this chart, I'm going to ask you a question. Give me an answer. What do you think the chances are with that V pattern on the right hand side? What do you think the chances are of the SPX going higher?

What do you think they are? Now, remember, if it goes up vertical, okay, like a space shuttle, do you think really that prior high is probably going to go up? Is it going to be a strong level of resistance? Well, maybe not. Okay. So what's my point in this? The point is when you look at the indexes, I think we have to kind of start thinking, maybe one of the major points we want to talk about here today is talking about resistance to a 161 extension. Well, the difference between support and resistance, a channel, James Channel Boyd, as some of you called me, okay, is 222 points. If we take 222 points and add it on top, 222 points is going to give us a potential price target of, okay, $6,300.

So, if we were to put a price tag or price target on the S&P 500 and then said, 'We wouldn't be shocked if it went there; we're saying kind of that it might try to go to that 6,300, the channel width add-on top 6,300. And we're saying that if it really pushes aggressively like that, that resistance might not hold in; it might push to the upside. Now, the NASDAQ, you're going to see a similar thing. Now, the other thing I learned about kind of bearish trading is when it breaks diagonal resistance, okay? So, you had a high. Okay. And please learn from kind of my lessons of stupidity. Okay. Feel free; and I don't even mind if you make fun of me, okay?

Now, if you take a look at this, it was going down, down, down. And one of the things that we've you've actually seen is when you have a downward channel and then on the right on the bottom you really have like a divergence right MACD at the slowest point shallower and if you see a situation like that where the MACD is going one direction and you're going to see that the price is going down that's your classic divergence the reason why we focus on diagonal breakout so much after meaning the price is a pullback which by the way this channel is really diagonal meaning the price is made lower lows and lower highs and

if these stocks break out sometimes these could be also very strong bullish trending stocks guaranteed no this stock market we don't guarantee this is not fixed income buying treasuries for crying out loud it's stocks okay risk risk risk now if you take a look at this it does break out and it goes to the upside now if we were to look at this and say well james what about the price target here okay now on the nasdaq in closing here you're going to see about 693 points in that channel with 693 points would actually put us right at the prior high that is not unusual and so that's why when you talk about let's say a breakout many traders they look for the the price to Rally back to the prior high now are we saying that the NASDAQ can't extend?

No, we're not saying that. Probably could, okay. Now if you look at the last one Dow Jones, when you look at the Dow Jones itself, the prior high on the Dow Jones is sitting here about 450 points. Now when you look at the Dow Jones, we said last week, the Dow and the small caps were leading. The paper money account likes I said the paper money account likes the large caps better than the small caps. We talked about why. And if you look at this, we only had one down day, fired right back, one down day, fired right back. Okay, not very bearish. Canada here never even re-took back. Or went down below the prior day's uh prior day's green candle, and the today bullish engulfing right back to the upside.

Sorry, yeah, we spoke about live cattle and feeder cattle now. If you take a look at that 45,000, now we're talking about 45,000. You remember one of the downs like five thousand, six thousand, seven thousand uh here we are at forty-five thousand. So, remember if you don't want to kind of make me become unhinged, I'm having a little fun with us is don't say words like it's too high, okay? Because last week that kind of took me over the edge. All right now just sectors just briefly before we look at our past trades and well new. Trades and pass trades, I just want to say industrials again, very solid in terms of that sector. Healthcare, if many of you look at that, been quite strong.

The financials which we brought in the fund class last week, you're gonna see have been very strong to the upside. Energy maybe kind of cooling off a little bit, warning like an alarm clock. We do see a red line right there, strike one, strike two, being the moving average crossover. There might be some profit taking in that energy space again. People like to make this really complicated. The first warning sign to sell is when the shorter-term moving average goes red, strike one more. confirmation would be the moving average crossover to the downside strike two and if you said look I want more confirmation but what does that more confirmation mean that means that the investor is probably giving back more of their potential unrealized profits to get the confirmation so you have to decide you want to get out early

no confirmation in the middle which is maybe where someone might start step two the moving average crosses down or do you want to wait to the 20-period moving average goes green no not green because it already is green then it goes red and it's showing confirmation that price is falling So, a little warning signal in the energy space, okay. Now when we look at let's say also the communication, okay. Now I let me just speak to that when you look at technology, I don't have anything there to say outside what we already talked about but when you look at technology, I don't have anything there to say outside what we already talked about about on the indexes and then when we look at the dollar sign IXC, we talked about on Tuesday the communication sector, okay.

And if you take over the communication sector, it's had a pretty big divergence here to the upside right low low low going one direction oscillator going the other. Direction okay, and that diagonal breakout really in the last three days now let's take a quick look at what is in this portfolio okay. Now let's kind of pull this up so December 24th we hit the reset button on both accounts okay. Now what I want to do is I want to kind of show you what is in these accounts okay. Now it's a lot of times people say well, or they might say well it's just options, but it's not true. I mean we did a lot of stocks too now.

I label this stocks in long synthetics and I'm going to show you what I'm going to show you-stocks in long synthetics would be delta the tire okay. We buy hundred shares of stock, it's a hundred. Delta, so when we look at this, we have IBM, Cisco, Starbucks, and when we look at let's say the sectors that we have information tech, information tech, consumer discretionary, healthcare. About ten days ago, maybe eight days ago-ish, or maybe two weeks at tops, we bought you and a which, and Cardinal health. Notice that their position size: a lot of these are not a hundred shares. What you're now going to see is Google in Communication Services; which we could argue is this technology for the most part, okay? Nvidia, GV, 15 chairs, Meta at Communication Services or technology healthcare energy.

So we looked at kind of at the top; we would say. Wow, you're really weighted to technology, and that's true now if we gave some feedback to to this portfolio, we would say, 'Man, it looks like you were light, maybe financials, fair comment, okay?' And it looks like you've been light industrials, fair comment, okay? Now, if we look at, let's say, the kind of short put section, information tech, you look at, let's say, that section on short verts, you got materials that are in energy, but still information tech. And if you look at that, you're going to see that, man, this whole portfolio is really loaded in two major sectors, communications and information tech. Where's utilities? They haven't been going up for the most part outside CEG.

Where's staples? They haven't been going up much either, okay? Where's healthcare? They haven't been going up much either, okay? We only had two of those, UNH and CH, and we bought those, but those have been underperforming as well. And when you look at real estate, it's been underperforming as well. So all of these trades, December 24th, we did, let's say, three trades or so. All these other trades were really in the last three weeks, okay? Now, what I want to do is I want to kind of talk about some new positions here for just a moment, okay? Now, what I want to do is I want to start with the Dow stocks for just a second, okay?

So let's go to MarketWatch, and let's kind of get a quick look as far as relative strength on the Dow Jones, okay? So if we were to look at this and say, okay, what do we got? American Express, we talked about the cards, credit cards, posted about that today, okay, on X, take a look at that. American Express, Cisco, BA, Industrial, Kinnicat, or Caterpillar, is right there, PG, Goldman Sachs, Triple M, and so on. So there's a couple stocks there on a relative strength basis getting a little push. That relative strength is leading to a bullish bound setup known as a 'Cahold'. That push is leading to some breakouts. And the duration of the breakouts we look at is a shorter-term breakout, 20 and 55.

Now, I want to kind of take a look at maybe a stock that might be a little bit underneath the radar. Like what? Well, I want to go back to Sherman Williams for just a second. Now, if you look at this trade, what do you think I'm looking at? Now, Villager says 'loaded in trend three'. I didn't think you'd notice that, okay? So if we go back to something for just a sec, trend three, three, three, three, three, three, three, three. So when does the investor tend to do well? It's when they're in trends three, okay? Now, I think I've been pretty clear on that, okay? They're not always going to be like that. That's not telling us that it's guaranteed to go up, but it's just at this moment in time, prices above both moving averages, okay?

Noted. Now, why do you think I'm bringing this up? Well, because I think it's going to be a little bit on SHW. Well, if we go back to this prior low, okay, you're going to see that we kind of have this old plateau of support, okay? And we know that we have earnings upcoming. Now, Sherman Williams, what sector are they in? Well, if we go back to analyze for just a sec, analyze, let's go to fundamentals, okay? And by the way, don't shy away from fundamentals. You're an investor. We're not buying ticker symbols. We're buying companies. Okay? We're buying companies that trade using a ticker symbol. So, when we look at this and say, what do we got? It's in the material sector, okay?

Now, if I pull this up on Sherman Williams, okay, what you're now going to notice is this is kind of right on the cusp of resistance. Now, we know that if we went to the left-hand side, think of more delta neutral strategies. If we went more to the right-hand side, higher delta strategies like buying shares, you know, you got to be more optimistic. You've got to be kind of more confident of the direction of trend. Long shares or buying shares of stock does have defined risk, but that's assuming the stock goes all the way to zero. Defined risk on stock doesn't mean there's a small loss. It could be a huge loss, okay? Now, if we have earnings coming up on January 30th, verify with the company's website just to make sure, okay?

Usually be at the bottom or top, investor relations and they'll have on the company's website when the earnings is going to be. And they'll release those right on the company's webpage. Now, what I'm going to do is I'm going to go to a long call vertical, okay? Now, what I'm going to do is I'm going to bring this up, SHW, okay? SHW. And I'm going to go and just kind of look and see, are they liquid options? Let's kind of look and see. Now, you tell me, are they liquid options? Okay. Now, I've seen this lately and I just want to make sure we're clear. If I go to the monthly options and I go look at the liquid options, the at the money bid-ask spread, and they're wider than 20 cents, this is not something we're looking for, okay?

Too wide, okay? If you look at the open interest on the at the money call and put, they barely have 100. Not very liquid. So, what are we going to do in this case? Well, we're going to buy the shares, okay? Now, when we do this, it probably means like our other examples, we're not really going to be buying, let's say, 100 shares of stock. Fine. Got a position size. We're going to right-click on the chart, buy custom with OCO bracket. Now, I'm going to go over here to the pool balls, click on that percent, dollar amount, and I'm going to put in that $5,000, let's go $6,000. The $6,000 on this account size, what percent of the account is that? 6,000, 105 and a half.

It's about 5. 7%. We said, and we'll continue to say, any time we do this, we're going to be buying. So, we're going to right click on the chart, it's probably going to be within 5 or 8% of the capital of the account. We're at 5 . 7. Now, how many shares is that? 16. We're not buying fractional shares here. So, I'm just going to type in 16 shares, okay? Now, what I'm going to do is I'm going to kind of put this target right here in the upper end. We might lower the target, maybe 1% to 2%. So, we just try to get out a little bit prior to maybe where we think that target is. So, we're going to type in 16 shares.

So, I'm going to type in 16 shares. So, we're going to type in 16 shares. So, we're going to go data GTC there. And what you're now going to notice is on the stop, the thing is, if you set a really tight stop loss and you're coming into earnings, you just did it to yourself. What do you mean did it to yourself? If you set really tight stop losses, knowing that the earnings is coming up, you just had a really, really high chance of getting stomped out. We don't want a tight stop. We want to give it some breathing room. Now, this is a really, really tight stop. Might shock you. Now, I've done both. Set really tight stop losses only to find out that I thought I was being prudent, but I was extremely successful in getting stomped out.

Now, if we set a stop, let's say at $344, we might say, well, that's ludicrous. That's absolutely insane. Well, let's think about the math here, okay? Don't think something like that until you run the math. Well, if we get at $360, we set a stop at $344, it's $16 worth of risk. And if we have 16 shares, the potential loss is $256. Now, the loss could be bigger if the stock were going to gap down. Noted, okay? So I'm going to kind of set a wider stop there, and that stop is going to be underneath kind of that area. I'm trying to give some more room on purpose, okay? Now, this is kind of the nice thing about having a spot.

I'm going to set a stop at $344, and I'm going to set a stop at $344. If you have a smaller number of shares, you can allow it to vacillate more in price without maybe prematurely getting knocked out, okay? So trade number one is we're going to set up, this is a channel trade, right? Something that fell down below support, that was knocking on the resistance again. And if that stock were to hold that $358, could we actually start to see the movement back to the upside? Now, remember, when we actually see the stock do this, this could be, now, if it did it. This could be bearish traders exiting, but it could also be, at the same time, that bullish investors are entering.

So you can kind of have a twofold effect. Bearish investors exiting, covering their shorts, buying the stock, or, and/ or, with that, bullish investors maybe buying their shares. We're going to go confirm and send, and we're going to read out loud what's going on. This is in the IRA. We know that that's the capital amount right there, and we could actually see the commission. Nope. Okay. Stop order. We could read that out and say, 'Is that okay?' And if it is, we're going to go ahead and send the order. Now, a lot of times when I do this, a lot of people kind of maybe, maybe make fun of it. They think, well, yeah, I can't make any money or lose any money doing this. You just feel like you're wasting your time.

Well, let's go back there if someone were to ever think that, okay? So just because we have nine shares, ten shares, et cetera, we're going to go ahead and send the order. And we're going to send the order. Now, let's go back to GEV. Now, how many of you remember us talking about GEV, GEHC, GE, those three companies? Well, this stock was purchased at 382. I'll show you on a chart in just a moment. The market price, or where it is now, is triple force, and it's up $948. Now, this 15 shares of stock, which was entered in the last two weeks, has moved the portfolio 1% by itself. Now, if you go back and say, well, when was it entered? It was actually entered on January 14th at 9:41 my time, and there she is.

There's the price. Now, I need some help here, okay? Now, if we go back to GEV on the page, you're going to tell me definitively, okay? Don't give me this maybe stuff. I'm not interested in maybe right now. If we're using moving averages as maybe a way to have an earlier sell signal, some confirmation, more confirmation, is it giving us any sign of reasons to say, we're going to sell the stock? Just give me a yes or no. I don't accept maybes right now. I'm not interested. Yes or no? Yes or no? Yes or no? Yes or no? Yes or no? Yes or no? Yes or no? Yes or no? Okay. Now, remember, let me repeat what I just said.

If we're looking at the moving averages and we're using that as our criteria to sell, okay, is there any red line on the 10-period moving average? No. Is there any crossover? No. Does the 20-period moving average show red? No. Do you ever say yes for anything? No. Okay. A little fun there. Just make sure you're listening. Now, so the hardest thing to do is when we talk about trading, trading, trading, trading, trading, trading, trading, trading, trading, trading, trading, trading, you know what the hardest thing to do is? Stop touching stuff. When you see these red candles, do not take this as, oh, it's showing signs of weakness, okay? And these red candles were still up higher than the previous day. They're red because the price closed lower than where it opened.

And this is where the Hakanashi candles can help to kind of tame your emotions, okay? You are the enemy. You are the person who's going to be the enemy. You are the person who's going to be the enemy. You are the person, I am too, that kind of overthink the basics of moving averages. We are the enemy. Shining a mirror, right? Now, if you take a look at this, you're going to see it went through the earnings and a big bullish engulfing candle. So on GEV, what we could do, now what I am going to show here is I'm going to set like a little moving average envelope, or I could just kind of put a little five-day low. Let's kind of do this if I can. Let me go.

10-day low, do I have that? Let's see what we got here. And I think it's actually on the other one. Let me actually kind of bring that up. Let me see if we can't talk about, there we go. So if I said, now, by the way, I'm going to show this because we're visual people, okay? We're visual. I'm going to go to this chart. Let me share this with you, okay? Now, this script is about as simple as it gets, okay? And I'm going to put that right there in the chat, and I'm going to bring it back to there. How do we put this on? Set up, open shared item, and I'm going to bring it up, okay?

Now, once I do that, I'm just going to call this a five-day, whoop, and you need to make sure that there's no spaces. That way, when you go look to find it, it's just five-day low. Now, what I'm going to do is once I go back into the test tube, I'm going to type in five, there she is, okay? Now, once I double-click on that, it's going to plot where the five-day low is. Now, we could also do the 10-day low as well. What's the purpose of this? Well, the purpose of this is really, if we go back to where was the entry, okay? The entry was right here. Now, if we had to grade ourselves and say, James, how good was the entry? Did you buy when the moving averages were green?

Yes. On that day that the entry was made, was there a close above the high of the low day? Yes. Okay. So, we have to say it's pretty solid, okay? Now, when we take a look at this, what's the blue line? The blue line is what the five-day low is. It goes back five trading days and plots where the low is. One, two, three, four, five. Of those five days, what's the lowest price or point there? It's right there, and that's why the blue line is right there. Now, what you're now going to notice is, why did you, James, jump to really the five-day low? Well, because on the right-hand side, you have the five-day low. You have the five-day low. You have the five-day low.

On the left-hand side, there's been an explosion of price, and so what we're going to do is we're going to move up the stop to 387. Now, this might sound like blasphemy, like, oh my gosh, okay? Well, when we go back to this, what I need you to really understand, that five-day low, if I put that on here, five-day low, okay, we're visual people. We want to see where we can adjust the stop to. I'm just going to take that right there. Do not click on the X because it'll cancel the order. We're going to move it up. Now, in this case, the investor might not even mind that the stock consolidates. Why? Well, because the five-day low would increase. We're using the five-day low as a way to move up the stop manually.

If that stock were going to consolidate maybe next week or the end of this week, just a couple days, that stop might go up dramatically. Now, remember, the stop doesn't guarantee I'm going to lock in profits. You didn't lock in anything. You don't know if you locked in anything until you see where the fill was. The only way you could say you locked in profits is if you bought a put on it because that's contractually the right to sell at the strike price from now to expiration, contractually. The stop, if you think about that, it's just a trigger to sell. So those are big differences. They're not the same. Now, if we take a look at this, so that's number one.

The other one I want to go back to, which I think we need to double check, is I need to go back to just real quick. Now, IBM, we did a caller on this. We don't need to do anything on the caller. Now, if the caller is making money, that tells us the stock hasn't gone up. Sideways are down. I don't know. The bearish options are making money. That actually tells us the stock has gone down. Don't need to do anything there. Now, we patiently waited for Cisco. Cisco, entry 60,14. It's up about two bucks. If I bring up Cisco and said, what do we have here? And if I look at Cisco, we also have another opportunity to raise up the stop.

Now, I'll share with you the 10-day low in just a moment. This is where the initial stop was. James, show me where the entry was. Love to. The entry was on January 16th. So we're talking about a week ago in this class. Now, if you go back and look at this, where was it on the chart? Well, let me show you where it was. Cisco, the 16th. What did it look like? Okay. The 16th. There's the 14th. There's the 15th. And it was purchased right there. So when we bought that, we're probably thinking that it was really a breakout. The moving averages were green. A lot of times people ask a question like, well, where's the entry? Well, the entry could have been there. Could have been. Moving averages were green.

Got a little crossover. The very next day, it could have been right there. But we got in right there. Now, by the end of the day, it went red candle. But that red candle did not lead to the moving averages changing color. Neither did it do it the next day and the next day and the next day and the next day. So what I'm going to do is on this stop, we're going to go back in and just move up the stop. We're going to move it up to right there. Okay. So $59. 80. Now, if I did that and I kind of said, well, where's the target? The target there is about $64. 30. Now, ladies and gentlemen, boys and girls, when we are within one to 2% of that target, what starts going through our minds?

Better be saying 'reward', 'risk', 'stop losses'. If you say, I don't know what that is, I don't know where you've been. You probably wish you had been where we talked about it a couple of times. So I'm going to repeat what I just said. If we're within one to two percent of the target, the investor might adjust to a one-to-one methodology, stop-loss wise, or one-to-one and a half. So if this continues to go up next week and many of these examples, we're going to revisit that again because many stocks might be nearing their price targets. Now, I'm also going to go back to another area that we haven't had a whole lot of exposure to, but I'm going to try to see if we can get a little reversal here to the upside.

Now, the many of you might be 50, 60, 70 and so on. Now, by the way, some of you might be wondering, are you? I'm 47. Okay. And so the biggest thing is, we're all eventually, now, by the way, my dad always says, 'Look, I don't listen to anyone who doesn't have gray hair.' Why is that, dad? And because the person that has gray hair or snow on the roof, as he says, they're the ones that have all the wisdom. So I'm trying to get there. Okay. Now, if you look at, let's say PM, which we're talking about a staple stock, when we look at PM and you look at, let's say the dividend yield, it's 4. 33. Now, we're pretty flush with stocks and technology.

One of the other ones I want to bring up just quickly is a little PM. Now, notice that PM, for example, has earnings upcoming, noted. Now, like in our previous example, we're going to look and see, could PM also try to go back up as well? Now, on PM itself, what I'm going to do is I'm going to right-click on the chart, buy custom. I'm going to buy the shares. With OCO, we're going to go back to the stock market. Now, this one I'm going to do a little faster because I think we just covered this. Okay. We're going to put the target, let's say within one or 2% of that 132-ish area. And if we did that, it's going to set a target right at about, let's say 132.

You might do it a little bit less, et cetera. Stop, what I'm going to do is I'm going to set the stop underneath this area, kind of where we broke out from. We're going to take 1 . 25, 1 . 253, less 1, 2, excuse me, 2 to 3%. We're going to take 2%. That's how we set the stops. Anything that's over $50, we take support less 2%. 0 . 98 is just 2% less than the support level. 1 . 19 is going to be the stop. Now, we also got to think again, the IRA, capital wise. Now, this is not, well, I want to do this. I want to do that. We're going back to adhering to how much could it invest?

Well, if the capital that we are buying is $6,500 worth of stock, how many shares is that? 52 shares. We come back in and say, 'I'm going to buy 52 shares.' There it is. Okay. Is this right? Well, and these orders, data GTC, data GTC, et cetera, you're going to see that, they're now good till cancels, not day orders. Now, some people might be a little concerned with the upcoming earnings. Some of these staple companies tend to have more stable earnings. So, they're not like discretionary stocks. People don't typically stop chewing or smoking tobacco, okay? Usually overnight, typically. And so just like many staple stocks, their earnings revenues tend to be more consistent. Now, what's one of the risks?

I wonder if they come out and say, 'We're just shutting down half of the plants.' Well, now it's something completely different. But likely, maybe not, okay? So if the investors are going to buy shares over the earnings, they want to kind of think about how sticky or how consistent those fundamental metrics are, okay? The numbers, revenue and earnings per share. We're going to go ahead and send this order, okay? Right there. Now, I don't want to go ahead and send this order, okay? I'm going to go ahead and send this order, just kind of want to mention a couple other stocks here, okay? And I'm going to go back to Dash for just a moment. Now, the other day I was at Jersey Mike's, not a recommendation.

I'm not one who gets paid to advertise. But I was just sitting there in the parking lot and I saw three people go in and grab food and then leave. Grab food, leave. Grab food, leave. And they were people that were doing DoorDash and all this other stuff. And I was just so amazed. I was like, who are these people that are so busy where they can't just come get the food themselves? Now, you think, well, maybe you're in the peak time. I wasn't in the peak time, okay? It was like 2:30 in the afternoon. Now, what I'm going to do is post this. Now, if you've never used DoorDash or ever looked at it, it's interesting because the prices of, let's say, Chick-fil-A items, Burger King, whatever you're buying from, they're not the same.

The price is inflated a little bit to compensate the driver, DoorDash, et cetera. So it's interesting, plus a delivery fee, among other things. Sherman Williams fills. The last trade we're going to do is we're going to sell a cash-secured put on DoorDash. DoorDash is an example of a resistance, but the price smashing right into that and maybe trying to do an extension. So our last trade example in the last 90 seconds, we're going to go to the DoorDash, the monthly options, okay? And what we're going to do is we're going to look at the 21st February, and we're going to look to sell. The one that actually has a delta of, let's say, 30 to 40. Now, I want to also take a look at open interest.

We're going to sell the one that has the highest open interest, namely the 175. And also with that is when we look at buying the puts to the downside, we're going to look to buy the put that really has also some liquidity as well. And we're going to look to buy, let's say, the 150-ish, 150. So we're going to look to buy the one that has the highest open interest, namely the So we're going to sell the 175 and then buy for downside protection the 150. Now, I'm going to see if our paid money portfolio will let us do this, okay? Right-click on that 175, sell, vertical. Now, this is not your typical vertical. We call it a short wide put spread. It's more cash-secured put-like. Credit's not as high. Noted.

Why? Because we're buying that downside protection. So last trade that we're doing here is dash, a cash-secured put, or short wide put spread. So today, in our examples, that'll be our last trade, we did the example of dash, okay? Let me send that order so I can show this. When we look at our orders that filled, number one, Sherman Williams filled. Two, Philip Moore's filled. Three, we also, for example, had Meta, filled as well. And NVIDIA was a follow-through trade from yesterday, okay? And so was Meta, okay? But those are the trades we actually talked about here today, but we also talked about some adjustment of stop losses as well. Now, stay tuned for our next webcast coming up right at the top of the hour.

Remember that I'll send you also the links to the classes as well, just momentarily, so stay tuned for that. And I will also post in the chat the link to the script of the five-day low or the 10-day low. So stay on so that way you can get those links as well. Remember with what we discussed was done, for example, illustrative purposes only. Thank you, Brent, for answering those questions in chat. This has been the class on trading the trend. We've met the enemy, and the enemy is us. And when we finally have those trends moving up in our favor, can the investor be disciplined to trade the exits? Can they? Okay? All right, don't tell it, tell us what we want to hear. Could you follow through in your paper money account? Stay tuned for our next class coming up next. Thank you so much. Take care. Bye-bye.