Imagine yourself teeing up at the 18th hole of TPC Sawgrass in Ponte Verde Beach, Florida. A slight breeze rustles the trees off in the distance, the clear blue skies reflect off the pond. It’s a slight dog-leg left, and the sound of your driver connecting with the golf ball breaks the silence. The stroke felt great… the ball bounces down the fairway missing the water hazard and lining yourself up for a great approach to the green. Life is good… retirement is great. After your morning round of golf, you’ll catch a quick nap before you lose yourself in… Read More

Imagine yourself teeing up at the 18th hole of TPC Sawgrass in Ponte Verde Beach, Florida. A slight breeze rustles the trees off in the distance, the clear blue skies reflect off the pond. It’s a slight dog-leg left, and the sound of your driver connecting with the golf ball breaks the silence. The stroke felt great… the ball bounces down the fairway missing the water hazard and lining yourself up for a great approach to the green. Life is good… retirement is great. After your morning round of golf, you’ll catch a quick nap before you lose yourself in a classic Tom Clancy novel by the pool. #-ad_banner-#It’s the “true” retirement dream — you sleep well at night, travel and have money left over to help out your kids and grandkids. Put simply, you’re doing what you want, when you want, without the stress of outliving your money. You’ve worked hard your entire adult life stashing away money for this moment… dreaming of the day you could retire and simply live off your investments. Unfortunately, for the majority of retirees that’s exactly what it is… a “dream.” Most “regular investors” won’t be able to generate enough income for that… Read More

The most recent Federal Reserve meeting stirred up a good bit of speculation among precious metal investors.  #-ad_banner-#While the understanding was that the central bank was on a trajectory of curtailing its bond-buying program and eventually allowing interest rates to rise, Fed Chairman Janet Yellen’s comments caused some uncertainty. Yellen indicated the Fed would likely keep rates at the current target rate between zero and 0.25% for an extended period of time after the end of the central bank’s bond-buying program. This caused precious metal prices to spike, along with share prices for precious metal miners,… Read More

The most recent Federal Reserve meeting stirred up a good bit of speculation among precious metal investors.  #-ad_banner-#While the understanding was that the central bank was on a trajectory of curtailing its bond-buying program and eventually allowing interest rates to rise, Fed Chairman Janet Yellen’s comments caused some uncertainty. Yellen indicated the Fed would likely keep rates at the current target rate between zero and 0.25% for an extended period of time after the end of the central bank’s bond-buying program. This caused precious metal prices to spike, along with share prices for precious metal miners, as continued low interest rates will be more likely to spark inflation. Since Yellen’s statement, other members of the Fed have spoken up, sending mixed messages to the market. In particular, St. Louis Fed President James Bullard said the Fed could raise rates in the first quarter of 2015. With so many different opinions on what the Fed will do, investor uncertainty is rising. This is great news for us as option sellers, because with more uncertainty comes higher option premiums. Today, we will use a put-selling strategy to benefit from the rally in gold stocks, generating an attractive level… Read More

Precious metals traded lower this spring as investors worried about the potential for interest rates to rise later in the year. After an unprecedented period in which the Federal Reserve has kept interest rates near zero and spent billions of dollars per month buying Treasury bonds, it is now making a calculated exit from its bond-buying program. #-ad_banner-#For investors in gold, one of the primary fears is that the Fed will allow interest rates to rise, which in turn, would lead to a stronger U.S. dollar. As a general rule, gold prices fall when the dollar is rising because a… Read More

Precious metals traded lower this spring as investors worried about the potential for interest rates to rise later in the year. After an unprecedented period in which the Federal Reserve has kept interest rates near zero and spent billions of dollars per month buying Treasury bonds, it is now making a calculated exit from its bond-buying program. #-ad_banner-#For investors in gold, one of the primary fears is that the Fed will allow interest rates to rise, which in turn, would lead to a stronger U.S. dollar. As a general rule, gold prices fall when the dollar is rising because a stronger dollar can buy more ounces of gold for less. Last week, the Federal Reserve completed its scheduled meeting, and as expected, announced a fifth straight $10 billion cut in its monthly bond-buying program. While these cuts are widely expected to be bullish for the U.S. dollar, the Fed also issued a statement noting that it intended to keep the short-term interbank lending rate in a range of zero to 0.25% “for a considerable time after the asset purchase program ends.”  Prices for precious metals jumped on the announcement as it is becoming clear that the Fed will continue to… Read More

Editor’s Note: This article is what we call a “Hall of Fame” essay – a title we’ve reserved for some of the finest StreetAuthority pieces ever written. This essay explains how Amber Hestla is using an options-selling strategy to safely boost her income every month. When we originally published this essay, Amber’s track record was 25 for 25. Now, she’s 52 for 52. “Always be in a position to trade another day.” Those were some words of advice John Bollinger gave Income Trader’s Amber Hestla as they sat around the dinner table at Ted’s Montana Grill in Denver two weeks… Read More

Editor’s Note: This article is what we call a “Hall of Fame” essay – a title we’ve reserved for some of the finest StreetAuthority pieces ever written. This essay explains how Amber Hestla is using an options-selling strategy to safely boost her income every month. When we originally published this essay, Amber’s track record was 25 for 25. Now, she’s 52 for 52. “Always be in a position to trade another day.” Those were some words of advice John Bollinger gave Income Trader’s Amber Hestla as they sat around the dinner table at Ted’s Montana Grill in Denver two weeks ago. #-ad_banner-#John, like Amber, has made a career out of trading options. It was his initial work with options back in the ’80s that lead him to develop the Bollinger Band(R), a technical indicator used by analysts the world over to identify when an asset may be overbought or oversold. Given his contributions to the profession and his accomplishments as a trader, it’s safe to say John has had considerable success navigating the options market. So when Amber asked him what the key to that success has been, she wasn’t surprised to hear his answer: “Always be in a position… Read More

There are times when it makes sense to take bullish positions in breakout stocks ahead of long-term advances. And then there are periods when that strategy is dangerous because equities have already advanced to the point where breakouts are prone to failure. #-ad_banner-#In today’s market, in which we have blue-chip indices routinely hitting new highs while small caps have faced more pressure, I am hesitant to buy breakouts. The bull market may still have legs, but many stocks’ valuations are at premium levels, leaving them vulnerable to significant pullbacks. Rather than using our put-selling… Read More

There are times when it makes sense to take bullish positions in breakout stocks ahead of long-term advances. And then there are periods when that strategy is dangerous because equities have already advanced to the point where breakouts are prone to failure. #-ad_banner-#In today’s market, in which we have blue-chip indices routinely hitting new highs while small caps have faced more pressure, I am hesitant to buy breakouts. The bull market may still have legs, but many stocks’ valuations are at premium levels, leaving them vulnerable to significant pullbacks. Rather than using our put-selling strategy on one of the many stocks trading at new highs, I want us to set up an income trade using a stock that has been under pressure and may very well be finding support. Shares of Vale (NYSE: VALE) have closely tracked the spot price for iron ore over the past several quarters. As questions emerge regarding future infrastructure development in China, prices for iron ore have declined. This has been compounded by the fact that the big three iron ore producers, BHP Billiton (NYSE: BHP), Rio Tinto (NYSE: RIO) and Vale, have made significant investments in their infrastructure… Read More

The past five years have been a tumultuous period for U.S. natural gas prices. The widespread use of hydraulic fracturing (aka fracking) to release gas from shale formations revolutionized the industry, dramatically increasing production. As a result of this massive new supply, natural gas prices spiraled lower, briefly dropping below $2 per Mcf (thousand cubic feet) in April 2012. Since that time, spot prices have moved steadily higher as demand has slowly picked up to the point where the supply/demand imbalance is being resolved. #-ad_banner-#We saw a big spike in price this winter, as harsh weather led to… Read More

The past five years have been a tumultuous period for U.S. natural gas prices. The widespread use of hydraulic fracturing (aka fracking) to release gas from shale formations revolutionized the industry, dramatically increasing production. As a result of this massive new supply, natural gas prices spiraled lower, briefly dropping below $2 per Mcf (thousand cubic feet) in April 2012. Since that time, spot prices have moved steadily higher as demand has slowly picked up to the point where the supply/demand imbalance is being resolved. #-ad_banner-#We saw a big spike in price this winter, as harsh weather led to a sharp increase in demand. Prices then settled into a stable pattern near $4.50 per Mcf, which is a higher level than we have seen in the past few years. Companies engaged in natural gas production now have the benefit of selling at higher prices, resulting in wider profit margins. Shares of Ultra Petroleum (NYSE: UPL) look particularly interesting at this juncture, as the company is making some significant investments that will benefit from higher gas prices. In 2012 and 2013, Ultra Petroleum responded to falling natural gas prices by cutting spending on its drilling programs. The company reduced its… Read More

As a pilot, I’m fascinated with all things related to aviation. I’m particularly fascinated when iconic American aircraft builders like Boeing (NYSE: BA) take great strides to disrupt a highly regulated industry.  #-ad_banner-#Believe it or not, innovation is relatively muted in the aviation industry. With a focus on safety, dependability and longevity comes a lot of red tape. Many of the aircraft flying today have changed little from 30 years ago, excluding some advances in technology, weather detection and GPS.  Innovation means pushing the boundaries of engineering, overcoming opposition, and dealing with failures from time to time. Read More

As a pilot, I’m fascinated with all things related to aviation. I’m particularly fascinated when iconic American aircraft builders like Boeing (NYSE: BA) take great strides to disrupt a highly regulated industry.  #-ad_banner-#Believe it or not, innovation is relatively muted in the aviation industry. With a focus on safety, dependability and longevity comes a lot of red tape. Many of the aircraft flying today have changed little from 30 years ago, excluding some advances in technology, weather detection and GPS.  Innovation means pushing the boundaries of engineering, overcoming opposition, and dealing with failures from time to time. I expect Boeing’s minor setbacks earlier this year will prove to be trivial stumbling blocks. At the heart of this story is the Boeing 787 Dreamliner. While it has been the butt of many jokes, the early production problems may be a key factor in our ability to profit from the stock.  Boeing started the year off on the wrong foot as headlines stoked ongoing fears about the aircraft’s battery system when smoke was seen billowing from a 787 owned by Japan Airlines.  #-ad_banner-#A year prior, an All Nippon Airways 787 jet made an emergency landing when the main battery… Read More

One of the predominant strategies traders use is to simply find stocks in rising trends and hop on until they stop. I like to temper that a bit with a condition that the stock’s sector should also be strong. #-ad_banner-#Although the basic materials sector contains the damaged gold mining group, it has still been able to outpace the S&P 500 as the latter moved into record high territory. That means components within the sector are taking up the slack of the miners, and one of them — chemicals — is doing the lion’s share. The S&P Chemicals Index (CEX) is… Read More

One of the predominant strategies traders use is to simply find stocks in rising trends and hop on until they stop. I like to temper that a bit with a condition that the stock’s sector should also be strong. #-ad_banner-#Although the basic materials sector contains the damaged gold mining group, it has still been able to outpace the S&P 500 as the latter moved into record high territory. That means components within the sector are taking up the slack of the miners, and one of them — chemicals — is doing the lion’s share. The S&P Chemicals Index (CEX) is trading at its own all-time highs and beating the S&P 500, as well. Within the group, Celanese (NYSE: CE) is now breaking out through resistance to new highs. And even a technical analyst like me can appreciate a 12-month trailing price/earnings (P/E) ratio of 8.6 and a forward P/E of less than 12. Most of its peers sport P/E ratios closer to 16, while the S&P 500 itself is trading at 19 times earnings. Looking at the charts, we can see that long-term trends from both major lows in 2009 and 2012 remain unbroken to the upside. And the trend… Read More

It’s one of the easiest and safest ways to generate 20%-plus returns on a regular basis. Once you’ve mastered the technique, I wouldn’t be surprised if you stopped trading stocks or buying and holding investments for years at a time. That’s how powerful this strategy is — it can drastically improve the way you make money in the markets, forever. That goes for conservative income investors and aggressive traders alike. #-ad_banner-#The technique is actually pretty simple, but it requires some investors to leave their comfort zone. You see, it involves options, one of the most misunderstood corners of the financial… Read More

It’s one of the easiest and safest ways to generate 20%-plus returns on a regular basis. Once you’ve mastered the technique, I wouldn’t be surprised if you stopped trading stocks or buying and holding investments for years at a time. That’s how powerful this strategy is — it can drastically improve the way you make money in the markets, forever. That goes for conservative income investors and aggressive traders alike. #-ad_banner-#The technique is actually pretty simple, but it requires some investors to leave their comfort zone. You see, it involves options, one of the most misunderstood corners of the financial world. Many investors steer clear of options because they have a reputation for being risky, but that’s not always the case. Covered calls, one my favorite ways to generate large income streams and capital gains, can be more conservative than buy-and-hold investing. In fact, The Wall Street Journal calls it “one of the most conservative… strategies available to professional and individual investors alike.” Simply put, covered calls allow you to get paid upfront to potentially sell a stock you own at a higher price sometime in the future. Whether the stock goes up or down, you can come out ahead. Read More

J.C. Penney (NYSE: JCP) bounced from an all-time low of $4.90 in early February. Shares went on to double in less than three months but have since pulled back slightly.  The extreme lows did not see new highs in volatility, representing a bullish divergence. This is a sign that a bottom has been put in place. The $8 level is a technical price pivot in the wide basing pattern since October. Midpoint support of the $10 to $5 trading channel sits at $7.50. #-ad_banner-#If you are comfortable holding on to this inexpensive stock… Read More

J.C. Penney (NYSE: JCP) bounced from an all-time low of $4.90 in early February. Shares went on to double in less than three months but have since pulled back slightly.  The extreme lows did not see new highs in volatility, representing a bullish divergence. This is a sign that a bottom has been put in place. The $8 level is a technical price pivot in the wide basing pattern since October. Midpoint support of the $10 to $5 trading channel sits at $7.50. #-ad_banner-#If you are comfortable holding on to this inexpensive stock for a potential recovery, then selling puts could allow you to collect income while you wait to get into JCP at a 13% discount. While the typical investor might use a limit order to buy a stock or ETF at a designated price or lower, the options trader can do one better by selling a cash-secured put option. This strategy has the same mathematical risk profile as a covered call. When selling puts, there is an obligation to buy the stock at the option’s strike price if it is assigned, allowing you to get into the… Read More