Happy New Year!!!

Wheee!!! I have never figured out what the thrill is - one year passes another starts and everyone gets a holiday. And the only reason for it is to get over a hangover because, for some reason, you are supposed to drink yourself blind on New Year's Eve. Pagan holidays - why not.

I spent the morning trolling for some swing trades and I've come up with two candidates that I will enter on Wednesday morning. They are - AES and BLG. Both of these companies are well-regarded by institutions and both show a premium of implied volatility over historical volatility. And both are moderately distressed at the moment.

I had a third candidate - AGIX but when I looked at the implied volatility (IV) it was 180%+. This is a red-flag to me so I did my due dilligence on the stock and discovered that it is a one-drug small pharma that's been declining all year. It's phase 3 results on its one drug will be released early next year and I'm not waiting for a big hit. And that's why you should look at the IV. It can tell you stories you might want to listen to. Some people might know how to play options with this guy e.g buy stock and OTM puts or whatever - I don't so I won't even suggest it.

I'm going to use Dogwood's method of using the ATR for number of shares to purchase and setting the stop loss. I've tested it and I really like it. I suggest you go over to his site and review the method. It's pretty slick.

I'm working on another method that is pretty complicated and the preliminary results look good. If it works out OK I'll share it with you next week.

These are not recommendations only some thoughts about what I am planning on doing. I do not recommend any stocks nor any trading method.