• I'm not going for a home run.

By Tim Collins

I'm going to play Research In Motion (RIMM) a bit close to the vest into earnings here. I'm not going for a home run. Options pricing is running below the average past moves of Research In Motion after earnings. I will say I think expectations are much higher this time around than they have been in quite some time, and the research stock action reflects it. The stock has doubled off the September lows. I do believe this favors the volatility trade rather than direction trade this quarter.

I am buying the December 21 $14 straddles while selling the December 21 $15.5 call/$12.5 put strangle for a cost of $1.07.  This only has an upside of $0.43, but breakeven is only 7.6% away, which sounds like a lot, but is well beyond the past moves we've seen.

A second trade will involve the combination of two approaches and the short straddle again.  I am shorting two of the same December 21 straddle, but I am buying the December 28 $14 straddle (next Friday, not tomorrow) and the December 28 $12 put/$16 call strangle for a total cost of $1.66.

The biggest risk here is no move or a big move. When I combine it with the aforementioned trade, however, the big move is less of a risk. This is just a modified butterfly type of position.   Now if the stock moved below $10 or over $17, then it would be an issue and likely create a small loss in the trade.

• At this juncture, I'm just going to watch others trade Apple.

By Tim Collins

Apple (AAPL) has become a high-maintenance stock. Sure, it's a fun-loving company, but that's just a friendly way of saying that it's wild, crazy and very unpredictable. The stock makes you smile one minute then has you pulling out your hair the next, which is horrible for trading.

Unless you want to watch it tick for tick, Apple has become too much of a time suck to trade for me. It if isn't clear to you already, this one is beyond natural movement. It has been for some time now. And while I was able to get great reads from the charts for a while, they have been growing a bit less accurate, which has caused me to avoid the name.

It happens. It will come back around. A name like Apple almost always will. Sometimes, though, you just have to part ways with that special stock. Maybe it will work out better in the future, and maybe now, but for right now, I'm just going to watch others trade Apple.

• It's one of my favorite names for 2013.

By Tim Collins

I have to piggyback my good friend Tim Melvin, who has already done some fantastic work on The Governor and Company of the Bank of Ireland (IRE), tossing this one out as a low-priced, very aggressive but potentially huge upside bank play for 2013. The charts seem poised to support the value arguments alter ego Tim has set forth previously. The daily and weekly chart set up well here.

The daily chart is consolidating the previous via a bullish flag.

Bank of Ireland (IRE) -- Daily

Source: StockCharts.com

View Chart »View in New Window »

This is a setup I want to see. The stochastics has a little leeway here to the downside, but I really want to see it bounce off 80. This looks like a buy on a pullback into the $6.30-$6.40 range or a break over $6.60.

The weekly chart is coiling and looks potentially explosive.

Bank of Ireland (IRE) -- Weekly

Source: StockCharts.com

View Chart »View in New Window »

Relative strength and stochastics have already broken out to the upside. I expect price to follow suit with a price target of $10 during 2013. The downside looks to be about $5.25, so IRE looks to be offering up a return to risk ratio of nearly 3 to 1 minimally. If the euro and Europe don't completely fall apart, then I believe $20 over the next three years is on the table as well.

Bank of Ireland is one of my favorite names for 2013. I am a buyer here.

• The charts show a remarkable run.

By Bob Lang

Unless a total disaster hits the yellow metal, we'll see gold up for an 11th straight year. Just an amazing performance for any asset class. The gains this year are not what we have seen in past years, but how many gold bugs were looking for this run to continue for five or even 10 years?

Look at the chart of gold over the last decade or so. Just a remarkable run. It's truly stunning.

Gold 12-Year

Source: Kitco

View Chart »View in New Window »

Now, your first question is probably when is it going to end, and should I jump on a short. A good question but the wrong one. The right thing to ask is if there is an opportunity to buy or sell in the next time frame. As always, the charts and technicals give us the best answer.

Gold 2012

Source: Kitco

View Chart »View in New Window »

Gold moves up or down for a variety of reasons that really are not important to traders. Historically, gold has risen sharply in times of high inflation, war and uncertainty. We've had some of that over the past dozen or so years, but nothing really like previous correlations. Gold as an alternative currency to the dollar or other fiat currency has generally been the way to go.

Do I want to step in front and say gold will fall in 2013? As a trend follower, you probably know my answer to that question.

• Halfway out.

By Tim Collins

Out of half the ratio put spread lottery tickets on Herbalife (HLF) for $0.45.

• Not a bad spot to get long.

By Bob Lang

The sheets need to be changed because Bed Bath & Beyond (BBBY) has messed the bed.

From a technical standpoint, though, it's not such a bad spot to get long. Much of what it lost this quarter was blamed on Hurricane Sandy -- a convenient excuse if execution was really to blame.

The chart tells me the $55 level should serve as good support, and I will add to my current position of short put spreads (60/55 Febs).

BBBY

Source: StockCharts.com

View Chart »View in New Window »

• Ackman stated that any profits from his Herbalife short are for charity.

By Tim Collins

Bill Ackman has said all, if any, profits from his Herbalife (HLF) short will go to charity.

Therefore, he implies if you buy Herbalife, you have charities.

Alright, so maybe that is a bit rough, but I don't see the need for this additional commentary. Is this supposed to make people feel bad for him if he doesn't make a profit? Or is this supposed to make those who can't get the four hours of their life back they've lost listening to Ackman babble feel better about it?

The statement by him is completely self-serving and has nothing to do with the trade, the trade thesis and is not needed.

• I favor the volatility in this trade.

By Tim Collins

Natural gas still looks attractive, although I favor the volatility side.

UNG

Source: StockCharts.com

View Chart »View in New Window »

The January $19 straddle for the bullish view or the January $20 straddles for the bearish view look like very good risk/reward trades here.

I am long the $19 straddles at $1.76 with the $20 straddles closer to $1.80 on pricing.

• GLD is currently at a short-term support level.

By Tim Collins

There is a short-term support level on the SPDR Gold Trust (GLD) right here, right now.

GLD

Source: StockCharts.com

View Chart »View in New Window »

Understand buying here opens up downside to $155, so a half position for those itching to go long. As you know, I've been in the short camp, so if anyone jumped in when I did, a half cover is the way to go, but I will not rotate to a long position.

• Coeur d'Alene Mines is currently the best play in silver.

By Tim Collins

Silver Wheaton (SLW) is my go-to gold standard (no pun intended) when it comes to the silver names, but when I look at this chart, I don't see a bottom. I don't see strength. I don't see a buying opportunity. Yet.

Silver Wheaton (SLW)

Source: StockCharts.com

View Chart »View in New Window »

It is the same for First Majestic Silver (AG) and Pan American Silver (PAAS). The charts are the same. The big support levels are now 5% to 8% lower.

If I want to buy a name in the space, I would choose Coeur d'Alene Mines (CDE) as the stop levels are clear (blue lines) and this one has a bullish divergence on relative strength and stochastics.

Coeur d'Alene Mines (CDE)

Source: StockCharts.com

View Chart »View in New Window »

You want a silver upside play right here, right now, then I would choose Coeur d'Alene Mines. Understand though, this space is very weak at the moment.

• As each day passes, it gets a bit easier.

By Bob Lang

Last night we attended a holiday concert band performance at my daughter's school. I watched a beautiful performance along with the many proud parents and teachers and was treated to a beautiful chorus, too. I sat next to the assistant principal, whom I know.

I couldn't help to ask her about the events of last Friday and how they affected her, the school, kids, teachers and parents. It was an emotional conversation, still a raw topic. She told me after hearing about it at 9:00 a.m., she closed her door and just cried. But as each day passes, it gets a bit easier.

She felt it as if those kids were her own. We all did. There is probably nobody out there who has not expressed the same emotions. It was hard not to think about last Friday's tragedy.

• I think the risk-reward favors the bulls.

By Tim Collins

Jabil Circuit (JBL) posted solid earnings with guidance that was a bit soft last night, but it appears as if the valuation argument is taking hold. (Soft guidance was anticipated and baked in.)

Jabil Circuit (JBL)

Source: StockCharts.com

View Chart »View in New Window »

We are into the gap now. I am down on the puts bought yesterday, but have covered some of that loss buying the shares in after-hours trading last night against those puts. I think the risk-reward favors the bulls here and a gap fill is upon us.

I like buying the following: long 100 shares, long 1x January 20c, short 2x January 21c. Net cost at current price is $20.00. I do already hold the 19 puts, so the risk here is limited.

• The best trends won't give you a chance to get on board.

By Bob Lang

Have you ever seen a good move and started kicking yourself for missing it? What do you tell yourself? "I won't miss that next pullback. It's certain to go back to this level, and then I'll jump on it."

But what usually happens is the stock never pulls back to your preferred entry level and you miss it again. That cycle tends to repeat itself and the frustration mounts as you constantly chase your tail. How many times does this have to happen before you start banging your head against the wall?

Jim Cramer featured my chart analysis of Goldman Sachs (GS) on his "Mad Money" segment Tuesday. He mentioned a better entry from then would likely be $125, and while it backed away some yesterday, it never got there!

Does that mean you missed it? Probably not, but let's recognize this is one of the best-trending stocks here and may not give you the chance to get in.

Been there, done that. What's important is recognizing the pattern and capitalizing on it. The best-trending stocks will not give you an entry opportunity -- or, at least the one you want or expect. So, what to do? I would never say blindly jump on any hot trend up or down. I use several momentum indicators that give me clues as to what the next move might be, and it's far from perfect. Then again, trading is not a game of perfection. So, I will often look for areas of balance in terms of volume (where buyers and sellers co-exist), look for an area above or below and then get in.

My goal is to make dollars and not cents when getting long options, so being pennywise and pound-foolish will hurt my bottom line. I need faith and belief in my read of the chart/technicals to take that trade that moves to the next level. Momentum is a powerful tool. Don't let the best trends leave you behind.

• We've bounced off of long-term support, but Ackman has plenty of power.

By Tim Collins

It looks to me as though Herbalife (HLF) has started to bottom for now, especially based on the weekly chart.

Herbalife (HLF)

Source: StockCharts.com

View Chart »View in New Window »

We've bounced off of long-term support, but Ackman has plenty of power. If I wanted to lotto tix this one based on the weekly chart, I will buy the December $35 puts and sell 2x December $32.5 puts for about $0.15.

I think the first bounce has given us a thesis that the $32.50 is the overshoot, worst-case area into tomorrow.

• As a father of three school-age children, I came up with my own strategy to protect our schools while the gun debate rages on.

By Tim Collins

I have lost my mind. I am insane. Why labor over something that will result in nothing but a time exercise? Ironically, we do this all the time. Paper trading is really nothing more than an exercise of time. Once you are involved with real money, you have to deal with real emotions, which is very different than paper trading. I promise you.

Yesterday's speech by President Obama regarding the White House's thoughts on gun control got me thinking. I was very interested in what the position of the White House would be. I was also very interested to see what hard-hitting questions the White House press corps would offer.

Unfortunately, I was left with nothing but disappointment. Apparently, the press corps determined the tragedy in Connecticut only had about 123 hours of importance to them in front of the fiscal cliff, as the first handful of questions involved the fiscal cliff rather than gun control, gun violence or the tragedy in Connecticut along with the other shootings that have occurred since last Friday.

I was appalled. And maybe worse yet, President Obama took the ball and ran with it. He answered the questions and not succinctly. But it got me thinking. This is a big issue, and yes, it is still an issue that will ultimately come back to money.

Gun control isn't an issue I will delve into here. Let's face it. Most opinions are made already. There are those who believe nothing should be allowed, while there is another extreme that believes you should be able to own anything you want. And between the extremes, if these are a scale of 1 to 5, we have plenty of folks that live in areas 2, 3 and 4, which fall somewhere between the most aggressive and the most conservative. Without going into detail, that is the area where I reside.

I realize that this isn't an issue that we are going to be able to settle or answer soon, so what is another way to approach this tragedy? I have heard of the notion of arming teachers. This feels more dangerous than helpful to me. As a father of three school-age children, I came up with my own strategy to protect our schools while the gun debate rages on.

According to the National Center for Educational Statistics, there were 98,817 public schools in 2009-2010, so I will round that number up to 100,000 for the purposes of this thesis. My approach would be to employ two armed, trained campus police/security guards on average for each school. Some schools are small enough where one may suffice while others may need three; on average, however, two should be a good starting point.

The average salary for a security guard is $28,834 a year per Salary.com, while the average first-year police officer makes $32,000 per year. Sad, isn't it? My preference would be to have individuals with previous training in these positions, whether it be military or otherwise, so I believe the average salary should be in the $35,000 to $40,000 range. If we use $35,000 as the actual received pay, given this is a position for about nine months of the year, it would equate to $46,667 per year, which is toward the high end of both these job classifications.

With 100,000 schools and two guards per school, we would be looking at creating 200,000 new jobs that pay about $7 billion per year. Yes, that's a lot of money. Also, consider these individuals should still go through a training process during the summers, which would require a stipend for those individuals as well as pay to those training the individuals, and I have to increase the total cost. Furthermore, each state will need several coordinators for scheduling and communication, which will bump the total cost. And lastly, I believe each school could choose one teacher or administrator to also be trained during the summer, which would give each school an extra individual for protection -- albeit, a person of last resort. This would push our total closer to $10 billion per year.

So what benefits do we get from this cost? Well, there would be job creation for over 200,000 individuals. The average unemployed person gets $17,160 per year, so the economy could recoup costs on some individuals who find a new position due to this job creation. The 2013 federal budget is looking at $77.4 billion for unemployment next year and was $109 billion in 2012. We have $14.1 billion slated for foreign military aid in 2013 and $45.4 billion in foreign economic aid. We are sending 6x the cost of the proposed solution overseas. We are set to spend over $900 billion on health care and a similar amount on defense. Heck, the Fed is spending $85 billion per month. If it were $84 billion per month rather than $85 billion and the other $1 billion were dumped into this program, it would be covered.

Granted, not everyone taking this position would have been unemployed. They may leave a job that could then be filled by someone unemployed, or the security position could be filled by a retired individual or as a second job for some individuals like military reserve or a police officer. If this is a second job or an out-of-retirement job, then a portion of the income will be taxable. This additional tax lowers the realized cost of the plan, plus it feeds into social security, which is an issue for the economy. I do believe politicians could argue a small tax increase to justify and cover the costs as well. It could be built into property tax or state income tax or a slight decrease in exemptions for children so that the cost is covered by those with children who benefit directly from the program.

This is a back-of-the-napkin idea. It needs work. I know that, but I believe it is a valid starting point to consider.

• Follow the lead of the Fed, and do not guess it.

By Bob Lang

While it has been well documented that Doug Kass is/has been short bonds via different vehicles -- such as long ProShares UltraShort 20+ Year Treasury (TBT), short iShares Barclays 20+ Year Treasury Bond Fund (TLT) and various options plays -- and time frames, I'm not going to address his tactical trades specifically. He's very aware of what he is doing and will probably end up a winner in the end; he usually does. Still, I want to introduce a different point of view.

I have said more than once that fighting the Fed is a dismal exercise. Whether it is equities or fixed income, you do not want to be on the wrong side of the fence.

If we look back over the past 32 years and consider this monster move in bonds over that time, there really is no precedence -- a literally uninterrupted bull market in debt, not to mention an explosion in issuance. Since reaching double-digit inflation in 1980, that bubble was slowly popped and yields withered over time. The early '80s saw an accommodative but cautious Chairman Volcker release the pressure built from an ugly decade. There was not a good time to short bonds.

The late '80s through the beginning of the millennium saw rates continue to nosedive under the watchful eye of Chairman Greenspan, and there were many remarkable runs in equities over that time frame. In fact, equity prices reached new all-time highs on several occasions. Still, it was not a time to short bonds for any length of time to make a mint.

Under Chairman Bernanke rates have fallen to near all-time lows as fixed-income returns continue to compete with stocks. Besides the basic asset allocation, we have found bonds outperforming stocks over the past several years (cumulatively speaking).

Now, to be fair, there have been instances when the Fed was raising short-term rates, and that was targeting inflation (or inflating asset bubbles). When the Fed is aggressively hawkish and choking the short-term rates, the curve moves. In fact, the only real part of the curve (until 2008) that the Fed controlled was the short end. The Fed would only be raising rates if inflation expectations were out of their boundaries. Generally speaking, it's not even a great time (long term) to be in stocks during this period.

Now, many have called this bond market an enormous bubble that will eventually pop. But you know something? I've been hearing that for years -- and still no bubble is bursting. The basics and fundamentals behind bond investing have not changed.

What does a bond investor hate? Inflation. If there is none or if in a deflationary environment, then bonds are good. A growth background is even better. Will the bubble pop? Maybe it will sometime in our lifetime, but I won't bet on the timing of it. And that is the point: Follow the lead of the Fed, and do not guess it.

So, if the bond bubble were to burst in one fell swoop, there would be massive collateral damage. If you thought the financial crisis was bad, put a 100x multiple on that damage, and then you have the landscape after the carnage. Say you stay with the trade all the way through to the end, who would be left to pay it off? We're talking an Armageddon scenario if nobody intervenes.

John Paulson and others receive full credit for taking down big profits in shorting the mortgage bubble five years ago, but they didn't ride it all the way out. Why? Because of the fear there wouldn't be anyone left to pay off their bets.

I'm all for a bond trade. If you know me, I do not discriminate with issues. If there is one that will give me the opportunity to profit (or even lose) and the chart is telling me something, then let's do it. As an investment thesis, I would have to think long and hard about that decision and whether I am picking the right fight. For the most part, over the last 30 years, short bonds for any lengthy period has been a losing battle.