Recently, an All Star Options subscriber wrote to me asking about some hard "rules" that I follow in entering and managing trades. The assumption was that I have some rules that I absolutely stick to which apply to every trade. As a guy who loves following rules when it comes to certain types of trading, I'm sorry to report that options trading isn't so cut-and-dried. There is nuance to position selection and management. It's much more art than science.

So while there are no one-size fits all answers to any questions about strategy selection, strike selection, and position management -- I've developed a few guidelines for myself that I rely on regularly as I ply my craft in the options market.

From the desk of Tom Bruni @BruniCharting

Last month we added the Investors Business Daily 50 List to our chart coverage. This list combined relative strength and strong fundamentals to highlight 50 of the best stocks in the market. Today I updated the Chartbook for members, so I wanted to highlight some of the best names I'm seeing on this list across several sectors of the market.

First, let's start off with a daily chart of the IBD 50 ETF $FFTY. Prices have been in a strong uptrend and look to be continuing higher after a failed breakdown below 35.15 and test of the 200-day moving average (if you're into that sort of thing). Momentum remains in a bullish range, so if prices are above 35.15 our upside objective continues to be 40.75.

Click on chart to enlarge view....

Next up in the Bull Market Rotation Wheel of Fortune: Airlines.

The S&P 500 printed a new all-time high on Tuesday (Aug 21), so naturally we should expect a broadening spectrum of sectors and stocks participating to the upside. The airlines have been a bit of a laggard in the transportation sector, but appear as a whole to have put in an important base with many names starting to breakout to the upside.

We've got a play to take flight in one of the leaders.

My favorite one lately is when the bears tell people that US Stock Market Breadth is deteriorating. It's hilarious.

Their sorry excuse for a thesis has them suggesting that there are fewer stocks participating to the upside in the U.S. Stock Market, when nothing could be further from the truth. I've been pounding the table that we continue to see an expansion in participation, which is characteristic of an uptrend and we have wanted to be buying stocks very very aggressively. That has worked out well. See here, here, here, here, here, here and here.

The...

From the desk of Tom Bruni @BruniCharting

Sector rotation. Sector rotation. Sector rotation. I probably sound like a broken record at this point, but today's theme is once again...sector rotation. This time it's Transports being helped back to their January highs by an improving Airline sector. We've spoken about the relative strength in Railroads and Trucking stocks, and acknowledged the relative under-performance in Airlines two months ago, but the data has slowly shifted.

We also pointed out that although Airlines were the worst of the Transport stocks, they were hanging in there on an absolute basis. Sure, there were weak names within the sector like American Airlines, but there were also strong stocks like United Airlines. Today, however, we're seeing the relative performance of the group trying to bottom and the absolute performance of even the weakest names improve.

With this headwind out of the way, the Dow Jones Transportation Average closed at...

During our August Members-Only Conference Call we discussed a lot of the big-picture trends from around the world and in India, but we wanted to do a long post discussing what we're seeing in the small-cap space. In this post I'll cover what we're seeing in the index itself, as well as get into some of its most actionable components.

From the desk of Tom Bruni @BruniCharting

Over the weekend as I was doing my run through the entire S&P 500, I noticed some emerging strength in areas that aren't quite as sexy as Medical Devices or Railroads (kidding). Instead, what I found was a number of potential long opportunities in the Real Estate, Utilities, and Telecom sectors. While the long-term relative performance of these sectors is nothing to write home about, as I explained in my Agribusiness post, I still think it's important to point out strength on an absolute basis because it contributes to the weight of the evidence and provides value to those who may have a portfolio approach that includes those areas of the market.

With that said, let's take a quick look at what I'm seeing.

Logistics and package delivery services provider $UPS got caught in the volatility-triggered downdraft of late January and early February of this year. It has spent the remaining part of the year forming a base and is now showing signs of filling the yawning earnings gap from February 1. We've got a play to take advantage of this gap fill and a likely return to new all-time highs.

During our August Members-Only Conference Call we discussed a lot of the big-picture trends from around the world and in India, but we wanted to do a long post discussing what we're seeing in the mid-cap space. In this post I'll cover what we're seeing in the index itself, as well as get into some of its most actionable components.

This is only the second episode of The Money Game Podcast that I've recorded with Phil and I'm already learning a ton. The idea behind these conversations is to help make us more aware of our bad habits driven by our cognitive behavior flaws. In this episode, Phil and I talk about Loss Aversion and the fact that as investors, and in life, we are motivated more by our fears than we are by our potential to win. This is an incredibly complicated topic so I think it's important to start this conversation early in this Money Game Podcast series.

Here is the second episode in full:

From the desk of Tom Bruni @BruniCharting

On May 1st we spoke about seasonality and why the traditional "Sell In May and Go Away talk is a great headline, but not a great investment strategy this year. While most think that seasonality data is useful to position ahead of what are typically weak or strong periods, we find that the real signal occurs when the market does not adhere to its historical patterns. Now that we're a bit more than half way through the seasonally weak May-October period, we thought it'd be helpful to look at the market's performance thus far and see what it could possibly mean for the rest of the year.

Excuse my cheeky blog post title -- we're bullish on United Technologies $UTX.

Consistent with our bullish stance on US equities over the near term, we continue to want to err on the long side. And we want to be in the strongest stocks in the strongest sectors.

One of those is $UTX and we've got a plan to play for a retest of all-time highs with an eventual breakout to significantly higher levels.