Check out the video below.

When rolling over a covered call into a front month Think or Swim has a very handy tool to do this in one transaction instead of the normal two.

Step 1. Find the call option that you sold that is about to expire. Do this at a minimum on the Wednesday before expiration on Friday.Right click on the option and select SELL then roll over this to select Calendar.

Step 2. Two orders will be created instantly. One to buy the current call before it expires (minimum 3 days before expiration) and the other to sell the next month call at the same strike price. You can adjust the limit price to be in the middle of the spread if needed. The beauty is this is just one transaction cost instead of two. Saving money and time. Love it.

When is the best time to short a stock? Below is a chart that illustrates a great short trade on SMH.

1. You first must find a stock with a low price and high volume day.

2. At this swing the volume at 27 million. Next wait for a retracement bounce up back to this price point which takes time and patience.

3. This was the test and time to short in the $30-31 price range and volume was only 10 million. This means no buying pressure and time to short.

LONG - Gold, Commodities, Oil, Solar, Mobile, Agriculture, BRIC, Euro, Canadian Dollar

SHORT - Financials, Real Estate, Russell 2000, US Dollar, Transports

Now that 2008 has begun swinging we saw a big drop on Friday with the major market indexes down 2-3%. In 2008 the market will be volatile as we continue to deal with the sub-prime mess in financials and the weakening US Dollar. Oil will continue to rise to over $100 a barrel (it will reach $125 this year) and gold will climb to $1,000 before the end of the year. As oil climbs so will the interest in alternative energies sources like solar, oil sands, and ethanol. I am not a big fan of ethanol especially since they want to use corn which will inevitably raise food prices - there is just not enough being planted in the US which means we need to import more. Why don’t we use sugar instead? it’s easier to grow and less demanding on the soil. It’s a political play for the farmers who get big subsidies from the government.

So below are some of the themes and stocks that I will be trading this year. I have also included some corrosponding ETFs that you can trade if you don’t want to own a particular stock.

Commodities - Gold, Copper, Steel (Long because of BRIC and lower US Dollar)
Gold Fields (GFI)
Agnico Eagle Mines (AEM)
Royal Gold (RGLD)
Barrack Gold (ABX)
Freeport Mcmoran (FCX)
Taseko Mines (TGB)
streetTRACKS Gold Trust (GLD) - Trades at near 10% of spot gold price
Market Vectors Gold Miners ETF (GDX) - Gold miners ETF

Steel Dynamics (STLD)
Companhia Vale do Rio Doce (RIO)
Market Vectors Steel ETF (SLX) - Steel ETF

Solar Energies - Solar (Long)
First Solar (FSLR)
Evergreen Solar (ESLR)
MEMC Electronic (WFR) - They make the silicon wafers for solar and chip makers
Yingli Green Energy (YGE) - China solar play
PowerShares Clean Energy ETF (PBW) - Good ETF for clean energy stocks

Agriculture (Long, I don’t like ethanol stocks but love the fertilizes that supply them)
Agrium (AGU) - Corn and crops need fertilizer…..$$$
Potash (POT) - Corn and crops need fertilizer…..$$$
Mosaic (MOS) - Corn and crops need fertilizer…..$$$
Corn Products Int. (CPO) - Corn processor
Bunge (BG) - Soybean processor

PowerShare Agriculture (DBA) - ETF thats invests in corn, soy beans, wheat, and sugar
PowerShares Commodities (DBC) - ETF thats tracks much like the DBA but also includes oil, gold, and steel.

How to Trade the Indexes in 2008
UltraShort Russell 2000 ETF (TWM) - Money will be moving out of small caps and into large caps, so Russell will go lower.
UltraShort Financials ETF (SKF) - Financials especially with exposure to mortgage loans will take all 2008 to bottom
Nasdaq 100 ETF (QQQQ) - just good to trade long and use the QID below to trade short.
UltraShort Nasdaq 100 ETF (QID) - Very cool ETF that is 2x short the Qs but trade carefully it moves fast.

Stocks I like to Trade in 2008
TransOcean (RIG) - Best in deep sea drilling. They make more money the higher the price of oil
Apple (AAPL) - continues to make fantastic consumer products
Goldman Sachs (GS) - money making machine…
Master Card (MA) - The more Americans are in debt the more they make $$$$
InterContinental Exhange (ICE) - Higher trading volume means more money
Intuitive Surgical Inc. (ISRG) - They make robotic surgery machines, very cool

Good luck with your trades and mine

If like me you have an IRA, 401K or SEP account you can not traditionally short stocks in these accounts. In my 401K plan there is no way to protect my investment if the market turns down unless I sell the shares and go into cash as my defensive play. If you have a self-directed IRA you can invest in not only stocks, mutual funds, etfs but also real estate. But not all self-directed IRAs allow you to short stocks - but now there are new securities to trade with to short the market.

A few fund families like ProShares and iShares are offering inverse ETF’s that allow you make money while the underlining index goes down. In most cases the relationship is 1:1 but some offer 1:2 ratios where the relationship is twice the inverse. These are more risky but are very powerful if you manage your risks.

The three most common long ETFs are:

• Diamonds [[DIA]] which track the Dow Jones 30
• Q’s [[QQQQ]] the NASDAQ-100
• Spiders [[SPY]] the S&P 500

But what if the market turns down then we can buy the 1:1 inverse of these ETFs which are

• Short Dow 30 [[DOG]]
• Short QQQQ [[PSQ]]
• Short S&P 500 [[SH]]

But if you are more aggressive and want more leverage action then try the Ultra shorts which are 200% the inverse of the index movement.

• UltraShort Dow 30 [[DXD]]
• UltraShort QQQQ [[QID]]
• UltraShort S&P 500 [[SDS]]

You should take are look at these ETF’s in your portfolio to hedge the market when we turn down but as always do your research and protect yourself with good money management protection by using stops.

Perfect example of benchmarking volume and buying on retracement with [[BIG]]. There are several examples below which show a rejection of price and closing higher above previous low - this is strong and is the buying point. This is a sign of strength.