We studied a bit on 'trading for income or cash-flow' and for awhile, it was very profitable to only buy stocks or options quarterly...just prior to their 'earnings run-ups'. For some reason, people love to speculate on stocks just prior to their reporting date -- at least on the tech stocks and the internet stocks.

It used to be that the 'signal' was a pick up in volume on the stock that you wanted to 'play' and the stock would being to move up daily about ten days before the report was due out. It became quite popular for many to 'jump on' stocks and play it for their run-up and sell the stock or option just prior to the report for a tidy profit.

Then, even if the earnings report was good, the stock would sell off anyway as the speculators would sell and move on to the next stock and do the same thing over again. This was a play that only involved the 4 reporting quarters each year and not much time to make a nice sum of money.

However, many soon caught on and the earnings runs weren't as dramatic as they had once been...and people began pulling out of their positions farther from the report date - up to a week before. That allowed a new entry point for those last minute speculators to jump in and ride the stock up for a few more points. But it also caught some of the newcomers to that particular 'play' off guard. Picking the perfect exit point was crucial to lock in your own profits before the stock fell back hard on massive profit taking by all the other speculators.

But, we were told to never hold our stock or options over through the report. If the report isn't good, you'll get killed with after hours trading on the stock and if you are holding options over the reporting, you can't trade them afterhours. So, your option can become worthless overnight before the market opens the next day if the stock is slammed hard after-hours on news of the report.

And even on good news, sometimes it seems as if a stock is punished. But it is mostly the large number of speculators pulling out since they've accomplished what they wanted and aren't long term 'investors'.

We've learned a lot these past years but today's market is for the pro's only. There was over a trillion dollars lost in the spring with the huge drop in the nasdaq.

And, if the nasdaq falls to 2500 before the end of the year... as is expected by many bearish reports I have read to balance out the hype from the Bull camps, there will be a possible entry point, whereever it finally 'bottoms', to ride it back up again. However, the market may also stay in a sideways trading range for quite some time with much less volatility.

It is looking like we aren't going to have an extended 'ride of our life' to the moon again very soon...in a roaring bull market that we've enjoyed for the past few years without a major correction. Almost anyone could make money in what has almost been a straight up market for so long. We got spoiled, I guess.

But people jumping in now to invest for the long haul may be caught holding stocks that won't regain their value for quite sometime IF the scenerio plays out that many of the BEARS are calling for.

In a presidential election year, usually stocks move up. Many I know were counting on this and guess what? They were caught off guard by buying stocks at triple what they are now - and they weren't expecting that, of course.

But, there are many ways to trade for income that don't involve day trading. 'Swing trading' or 'position trading' for short term trades that may last a few days, and aren't as stressful as day trading, are popular ways to generate a little income stream for many folks.

Many stocks trade in predictable 'channels' and you simply buy low and sell at the stock's resistance point and when it pulls back again, you re-enter with a new play. Learn how to do that with 3-4 stocks and become a 'specialist' on knowing everything that there is to know about those stocks.

But this is a crazy market right now and not the time for beginners to try their luck because they may get caught up in another unexpected down-slide as the market continues it's 'correction'. The Pro's are just waiting to take advantage of the uneducated in this environment. Be cautious.

~Amber