Classic market movement that show the ranges of our Dow projections. The market immediately opened to the downside, with futures obviously showing downturn, and we hit a theoretical Dow of 10,146, a zone we've seen before. But the market began retreating from this support line, directly moved upward. Holders of our put sold at up to 4.40, good profits from 3.75, and only risk holders will hold.
By 4 p.m. the market had moved down only 56 points, pointing to a bias to the upside
We've profited well from the call this week also, and only risk holders still may hold an OTM call for a bounce.
Dow Projections is my homework this weekend. I think I'm beginning to see a trend.
Saturday, February 27, 2010
Thursday, February 25, 2010
As One Reflects...
By 10.45 a.m. our March525 Call had returned 40 cents per contract from opening buy, below prior day close, and had returned even more for traders that held this issue longer.
As one reflects on each move of the market this week in comparison to our Dow projections it's easy to see where the support and resistance really takes off, and the controls come in that stop the market. Any good news is immediately hit with bad news, such as consumer confidence yesterday. We have yet to see what impact Toyota will have overall on Japanese exports, but it will be ugly, and many of these cars are made right in the U.S.
We will not open the week with a new trade EXCEPT for any risk traders that choose to hold our April put for a longer time period, and that is so noted in our instructions.
The market spiked up before Bernanke delivers his semi-annual report on Monetary Policy to Congress. It has been typical for the market to massively whipsaw during this time period, and as we entered we saw the market begin to just hold steady.
Smart traders always know to have their sell orders in at all times, and that bid/ask are not part of your thinking, but what price you wish to pay and sell for.
As one reflects on each move of the market this week in comparison to our Dow projections it's easy to see where the support and resistance really takes off, and the controls come in that stop the market. Any good news is immediately hit with bad news, such as consumer confidence yesterday. We have yet to see what impact Toyota will have overall on Japanese exports, but it will be ugly, and many of these cars are made right in the U.S.
We will not open the week with a new trade EXCEPT for any risk traders that choose to hold our April put for a longer time period, and that is so noted in our instructions.
The market spiked up before Bernanke delivers his semi-annual report on Monetary Policy to Congress. It has been typical for the market to massively whipsaw during this time period, and as we entered we saw the market begin to just hold steady.
Smart traders always know to have their sell orders in at all times, and that bid/ask are not part of your thinking, but what price you wish to pay and sell for.
Wednesday, February 24, 2010
It's Almost Comical
It's almost comical. A market whipsaw every day. By early morning the market theoretical Dow low of 10,228 allowed our puts to advance and actually show a profit, but many traders will continue to hold this trade as a hedge for a deeper downside.
As always by 3 p.m. the plunge protection team entered in to soften the blow for a time, but we remain with our beginning of the week projections of vascillations around key support and resistance lines.
http://www.ft.com/cms/s/0/49639438-1b21-11df-953f-00144feab49a.html?nclick_check=1
Study our Dow projections very carefully and re-calculate S/R lines midday, and you'll see how we've been making money all week.
As always by 3 p.m. the plunge protection team entered in to soften the blow for a time, but we remain with our beginning of the week projections of vascillations around key support and resistance lines.
http://www.ft.com/cms/s/0/49639438-1b21-11df-953f-00144feab49a.html?nclick_check=1
Study our Dow projections very carefully and re-calculate S/R lines midday, and you'll see how we've been making money all week.
Tuesday, February 23, 2010
Durable Goods
February durable goods, January Home Sales, January durable Goods, and Michigan sentiment come out Tuesday through Friday respectively this week. We believe this is a week of potential "triggers" to the market.
We saw it yesterday with the first earnings reports out, but the market held until 1:15 p.m. at lows of 10,333 and highs of 10,473 on the theoretical Dow. Written, this sounds like a large whipsaw day when in reality the market flat lining until the early afternoon.
It will be a trigger that stimulates a short term bias. Following that bias, the reverse bias will then occur, all within a 586 range.
Nice fifty-sixty cent profits were possible on the March 525 call.
Floyd's opinion well stated in Time: http://www.time.com/time/politics/article/0,8599,1964778,00.html
We saw it yesterday with the first earnings reports out, but the market held until 1:15 p.m. at lows of 10,333 and highs of 10,473 on the theoretical Dow. Written, this sounds like a large whipsaw day when in reality the market flat lining until the early afternoon.
It will be a trigger that stimulates a short term bias. Following that bias, the reverse bias will then occur, all within a 586 range.
Nice fifty-sixty cent profits were possible on the March 525 call.
Floyd's opinion well stated in Time: http://www.time.com/time/politics/article/0,8599,1964778,00.html
Monday, February 22, 2010
Study Numbers
For risk call trades Friday here's what we alerted: "Pay to prior day close, following futures. Best buy at 13.10 or less.
Sell to Resistance levels same day." The position hit buy lows of 13.00 and sell highs of up to 15.50, same day. We continue to hold the hedge April put.
Let's study numbers:
The Dow hit 10,479 as a theoretical high Friday
The Dow hit 10,299 as a theoretical low Friday
The all important SPX has two strong resistance areas, 1076 and more importantly 1100, and the market closed up to 1109.
What is important is the study of our Dow projections to see next tops,and more importantly, what could be next bottoms, if the bears are right that we are approaching every kind of technical top imaginable.
From the whipsaw we have seen this past week I can honestly say that the market is both overbought and oversold.
And a bit from our Blue Chip Options commentary:
It is of interest that the market is overbought on the daily charts, but still oversold on the weekly charts.
Bulls would hope at market opening for a downside of no lower than 1076 on the SPX, and a rebound to 10,640 area.
Bears believe it is time to short the market.
The USD is gaining. This signals that the Federal Reserve may be closer to tightening monetary policy gave the dollar a renewed boost.
Add to this that U.S. economic data continues to outperform and real interest rates are shooting higher than Europe.
Now it is the Euro that shows levels of concern.
What you’ve read above is our real gauge on the market. To Floyd, unemployment at 10% is a natural reaction to the severe recession we’ve had and that our import ratios remain our own doing.
Sell to Resistance levels same day." The position hit buy lows of 13.00 and sell highs of up to 15.50, same day. We continue to hold the hedge April put.
Let's study numbers:
The Dow hit 10,479 as a theoretical high Friday
The Dow hit 10,299 as a theoretical low Friday
The all important SPX has two strong resistance areas, 1076 and more importantly 1100, and the market closed up to 1109.
What is important is the study of our Dow projections to see next tops,and more importantly, what could be next bottoms, if the bears are right that we are approaching every kind of technical top imaginable.
From the whipsaw we have seen this past week I can honestly say that the market is both overbought and oversold.
And a bit from our Blue Chip Options commentary:
It is of interest that the market is overbought on the daily charts, but still oversold on the weekly charts.
Bulls would hope at market opening for a downside of no lower than 1076 on the SPX, and a rebound to 10,640 area.
Bears believe it is time to short the market.
The USD is gaining. This signals that the Federal Reserve may be closer to tightening monetary policy gave the dollar a renewed boost.
Add to this that U.S. economic data continues to outperform and real interest rates are shooting higher than Europe.
Now it is the Euro that shows levels of concern.
What you’ve read above is our real gauge on the market. To Floyd, unemployment at 10% is a natural reaction to the severe recession we’ve had and that our import ratios remain our own doing.
Friday, February 19, 2010
What a Great Week
What a great week. We didn't have to wait long to buy the March 500 Call below prior day close, as low as 13.10, rising to highs of 15.00 for a nice same day profit.
We continue to hold our April hedge put, and will soon take our larger second buy, if the market does not turn.
Five years ago I began harping on how the banks were gaining too much power, and our dialogues were about Bubbles Greenspan (I hated him when he was our hero), and about Goldman Sachs.
It continues today: http://www.huffingtonpost.com/2010/02/17/greece-goldman-sachs-fool_n_465942.html
We believe all the indices are moving to divergence. 1100 is strong resistance on the SPX, and 1076 a strong secondary stop.
Chartists that see head and shoulders patterns lead that a downward spiral should soon begin as we hit these market tops. Friday showed strength in the final hour to life the OEX well above 505, and SPX above 1100.
It is of interest that the market is overbought on the daily charts, but still oversold on the weekly charts.
Bulls would hope at market opening for a downside of no lower than 1076 on the SPX, and a rebound to 10,640 area.
Bears believe it is time to short the market
We continue to hold our April hedge put, and will soon take our larger second buy, if the market does not turn.
Five years ago I began harping on how the banks were gaining too much power, and our dialogues were about Bubbles Greenspan (I hated him when he was our hero), and about Goldman Sachs.
It continues today: http://www.huffingtonpost.com/2010/02/17/greece-goldman-sachs-fool_n_465942.html
We believe all the indices are moving to divergence. 1100 is strong resistance on the SPX, and 1076 a strong secondary stop.
Chartists that see head and shoulders patterns lead that a downward spiral should soon begin as we hit these market tops. Friday showed strength in the final hour to life the OEX well above 505, and SPX above 1100.
It is of interest that the market is overbought on the daily charts, but still oversold on the weekly charts.
Bulls would hope at market opening for a downside of no lower than 1076 on the SPX, and a rebound to 10,640 area.
Bears believe it is time to short the market
Thursday, February 18, 2010
Stuck at Resistance
February expiration day, Dow down 7 of last 10
Read this carefully: http://www.ft.com/cms/s/0/49639438-1b21-11df-953f-00144feab49a.html
Wal-Mart reports today and it's predicted the Philly FED for February will notch up.
Many traders have asked recently about what "high frequency trading" is, and how it affects day and option trading.
If I call up my broker and say buy 100 shares of Alcoa, and the broker trades for himself before my order, that is illegal because he knows my order is there.
But slimey old Wall Street began using computers to find signals in the market, get in front of what they believe is going to happen, and relies on speed. Some of these participants (we're sure taught by Goldman Sachs) have been using ways to look at orders before anyone else can see them. This moves markets to extremes, what we have been seeing, occurs because skimming for fractions of pennies occurs, and false signals are thusly sent to the marketplace by confusing volume and liquidity, which are not the same.
As a cynic I believe the SEC (which I am the most cynical about) will enact laws to calm high frequency trading, but they will have enough loopholes to allow Goldman and the boys to find another way to "bet the world."
Futures by 8.52 a.m. yesterday had held steady for several hours at 35 to 45 points up, with housing starts (one of my favorite false and useless statistics) were better than projected. Thusly, traders could have paid up slightly to 13.60, but profits as of 2.00 pm were minimal. We do not list this position as open, as it was never available at prior day close, and we advised not to "chase."
This all was true because SPX 1100 is a huge resistance area as is 505 on the OEX. Watch the tops that occurred yesterday and compare carefully to our Dow projections listed below.
We are right on target.
But....we're now flat lining. "Stuck at resistance."
Read this carefully: http://www.ft.com/cms/s/0/49639438-1b21-11df-953f-00144feab49a.html
Wal-Mart reports today and it's predicted the Philly FED for February will notch up.
Many traders have asked recently about what "high frequency trading" is, and how it affects day and option trading.
If I call up my broker and say buy 100 shares of Alcoa, and the broker trades for himself before my order, that is illegal because he knows my order is there.
But slimey old Wall Street began using computers to find signals in the market, get in front of what they believe is going to happen, and relies on speed. Some of these participants (we're sure taught by Goldman Sachs) have been using ways to look at orders before anyone else can see them. This moves markets to extremes, what we have been seeing, occurs because skimming for fractions of pennies occurs, and false signals are thusly sent to the marketplace by confusing volume and liquidity, which are not the same.
As a cynic I believe the SEC (which I am the most cynical about) will enact laws to calm high frequency trading, but they will have enough loopholes to allow Goldman and the boys to find another way to "bet the world."
Futures by 8.52 a.m. yesterday had held steady for several hours at 35 to 45 points up, with housing starts (one of my favorite false and useless statistics) were better than projected. Thusly, traders could have paid up slightly to 13.60, but profits as of 2.00 pm were minimal. We do not list this position as open, as it was never available at prior day close, and we advised not to "chase."
This all was true because SPX 1100 is a huge resistance area as is 505 on the OEX. Watch the tops that occurred yesterday and compare carefully to our Dow projections listed below.
We are right on target.
But....we're now flat lining. "Stuck at resistance."
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