A Key Day

Yesterday was a key day. Our goal is not to see the S&P close below 1170, the Nasdaq below 2090, and the Dow below 11,040. It's fine to gyrate and whipsaw as we saw yesterday with moves before the 3 pm. electronic traders entered was a theoretical Dow low of 10.981, but a bounce back to near 11,110 before the electronic hedge funds moves came in at 3 p.m.
We continue to hold one or two open call positions, and will hold with our current position, and offer an alternative put as a secondary trade. We continue to see the "market holding up" for a short time.

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In our Monday morning Blue Chip Option commentary this week I spoke of supply and demand, the key of how we trade at OEX. I thought it appropriate to teach again how cause and effect/supply and demand lead our market:

As I was trained in the Wyckoff Method I believe the stock market is fully “run” by supply and demand, set in place by cause and effect.

Supply and demand is much simpler than we make it:



1. When there are an equal number of buyers vs. sellers price is equal, and not moving up and down.

2. When there are more buyers, prices will increase

3. When there are more sellers prices will decrease

4. It is possible for prices to move higher with the same number of buyers. There just need to be fewer sellers.

5. When prices decline it is not because there are more sellers; there are just fewer buyers.



Question Authority. Question All Facts. Ignore the Obvious, as it is not obvious. Know that a rock is not hard.

Understand that you only know what you know.

This is the Zen of trading.