Option Trading following the Markets' Trend

[risk on]

Here comes the long bottom wick forming going into close. If so would be a VERY positive candle, given the gap downs to fill back up

[risk on]

Great charts, but I was wondering what you think of the obvious waining strength of DIA and the flattening of chart lately, looking eerily like the top of a roller coaster. ALSO in the top of overbought range for an extended period now on the 10 year weekly chart. I know that may not be the time frame you are focused on, but it just seems to need a correction given what I pointed out.

Thoughts?

[dedezak]

Potential continuation Uptrend

DIA - SPDR DOW JONES INDUSTRIAL AVERAGE ETF (Weekly-Daily-Hourly)

All three trends - primary, secondary and minor are in a potential Uptrend

[risk on]

Strong candle forming

[risk on]

This needs to better than a Doji today, or it's in jeopardy of busting through that 50 s a straight shot to the 200

[risk on]

Dia can't sustain two gap ups in a row, correction to fill both gaps coming

[$Green$]

Fuckin sweet

[PennyBears]

How are those looking?

[$Green$]

Bought DIA feb and march puts today

[PennyBears]

Opened a APR 13 145/143 C/P long strangle.. Markets should pick a direction

[gixxer11]

Bs - rally lol :)

[bob smith]

that was long time ago.

think in dog years.

gl mate

[rqtect]

sOLD wE ARE COMING DOWN hard
dAMM dIA NEVER AGAIN

[bob smith]

Is 14100 our new resistance. Where do we go from their.



Dow and Nasdaq for the first time ever corss the 13000, and 3000 levels at the same time respectively!



gl

[lady glueck]

ermm overvalued of course...i wanted to say! never mind

[lady glueck]

so this is DIA!? isn't it a bit oversold...little lady's afraid of big boys games lol

[1950tiger]

I think this post is as relevent as back in may 2010

[cashchaser]

Krammer said could see 8500. The promblems in europe could still worsen

[cashchaser]

ouch ouch no more stimulus bandaid .Gold Gold

[cashchaser]

should see a sell in after hours.

[cashchaser]

The dia should be at 9800 .the experts have said it was over priced 25,000 jobs lost this week 200,000 income tax people losing jobs soon and the census workers soon. fishing buss gone in gulfcoast tourist are not coming hotel jobs and rest and sm buss taking a big hit soon.

[cashchaser]

looks like the stimulus bandaid is falling off

[skeen]

Anyone with commodities experience, what do you think of commodities options -specifically now, heating oil?
Example: a March2.10 contract on heating oil represents 42000gal closed at .03/gal today. If it moves just 5 cents between now and March at 420 doll per penny, you would double your money -lots of leverage!

Fact of Day: More money is invested in grain commodity every day then in the stock market!

Commodities are being used more and more by Mutual Funds.

Good Trading
Skeen

[Options2Wealth]

UPDATE: EATING CROW!!!

To say that this experiment has been an unmitigated disaster
would be an understatement! It seems like I will lose all of
my $10,000 that I put up on this experiment. Though I still have
approximately 2 months left on those put contracts, I am not too
hopeful. Since the only thing that can help me regain my lost
capital is a serious market crash, therefore I rather lose the
$10,000. There will always be another day to recover this loss.

I have gained an awful lot of experience from this loss and have
also gleaned some valuable insight(s) into this beast of option
trading, which I someday soon hope to re-apply towards a winning
strategy. I definitely did earn one thing from this experiment
which was absolutely no fun: my wife's wrath!

Her wrath could have been worse had it not been for the fact
that I more than recoevered the $10,000 loss from my other
investments, three of which I had posted here:

http://www.investorshub.com/boards/read_msg.asp?message_id=855868

http://www.investorshub.com/boards/read_msg.asp?message_id=956148

http://www.investorshub.com/boards/read_msg.asp?message_id=1183268

While I tweak my system for option trading in my proverbial "garage", I have decided to initiate a new message board where I will regularly post and keep track of my stock tips; an area where I demonstrably have had a modicum of success.

http://www.investorshub.com/boards/board.asp?board_id=2082

See you there...

Regards,
contax

[Options2Wealth]

UPDATE:

I sure am losing my proverbial shirt on my Put play!!!
My wife is raving mad on this experiment of mine! I
keep telling her that these Puts still have a lot of
time and I still think that this trade will come around,
but she is not convinced! This market is in record
overbought area, but it just does not want to take a
breather, let alone a major correction. We shall see
how this pans out...

In the meantime, my two speculative plays are still
holding their own and I am heavily counting on them
to make me some dough!?! In the meantime, I want to
share yet another small cap stock tip with you all:
The name of the company is Peregrine Pharmaceuticals
(PPHM) and they are into cancer research. I believe their
novel cancer therapies, and they have more than one, are
about to get recognized BIG TIME...The stock, as I am
writing this post is trading ar $1.42 and ALL the technicals
are screaming BUY, BUY, BUY!!!!

All the Best!
contax

[Options2Wealth]

OFF TOPIC:

About a month ago, I had recommended a speculative stock Robotic Vision (ROBV). It was trading at 42¢ then.

Today, they announced their quarterly earnings. Even though they
have received a bunch of orders in the last few months, their earnings report was very gloomy as far their viability as a company is concerned. It is a lot more speculative than when I first recommended it on this board...

Please be aware!

All the Best!
contax

P.S. It is now trading at 38¢.

[Options2Wealth]

New Trade!

I just Bought 3 Contracts of 04 Jan 88.00 (YCK MJ-E) PUTS for $7.30 per Contract for a Total Cost of:

3 Contracts (YCKMJ) (PUTS) x $7.30 = $2190 + $125 (Commission)
= $2315

This is my LAST trade on this trip as I am now left with only $80 in Cash.

I now own 12 Contracts (YCK MJ-E) PUTS at an Average Price of
$8.14 (Including Commissions)

All the Best!
contax

[Options2Wealth]

UPDATE:

The Energizer Bunny is finally running out of juice!

The action today was very telling...

A strong index or stock, on a successful test of the
200 Moving Average Line, will forcefully bounce off of it!
The Dow's reaction to it's test was, at best, tepid. It's
lackadaisical bounce off of it's Major support tells me that
the Dow will not hold above it's 200 Day EMA. At best, it will
attempt one more feeble move up, before crumbling...

This Silly Goose is cooked!

All the Best!
contax

[Options2Wealth]

NEW TRADE:

I just Bought 3 More Contracts of (YCKMJ) PUTS @ $6.60 for a Total
Cost of:

3 X $6.60 = $1980 + $125(Broker's Commission) = $2105

I now own 9 Contracts of (YCKMJ) PUTS at an Average cost of
(Including Commission) = $8.28

I am also left with $2395 in Cash

All the Best!
contax

[Options2Wealth]

UPDATE:

This Energizer Bunny just won't quit!

In spite of continuous bearish signals emanating
from my System, this Market continues to move
higher!

Since my System is spewing out ever more bearish
signals, I have decided to do the following:

To make my initial investment into a round number
and to help mitigate Mr. Market's furious move
against my trade, I have decided to increase my
investment to $10,000 from the present $5770. This
will be the absolute last increase in my investment
to test my system! My wife will not allow me any more
allocation under any circumstance.

I have also fine tuned my System to avoid early signals,
as was obviously the case on the last trade. I am quite
confident that even my last trade at $8.70/Put Option +
Commissions will net me a profit. But now with the
additional Buying Power of $4500 ($4230 Additional
investment + $270 Available cash in the account), I will
be able to bring my average cost down and thus increase
the potential for a bigger profit---or loss! <GULP>

We shall see...

All the Best!
contax

P.S. On the Other hand, my two picks, EMA and ROBV are
doing quite well and should continue to do so in the
coming months!

[Options2Wealth]

UPDATE:

The Markets were up quite impressively yesterday and at the close,
the DOW was up 165.26 to close at 8,471.61 and DIA, the underlying
stock of the options that I trade, closed at $84.79 +$1.63. And the S&P 500 and the NAZ were also up substantially.

But my Indicators, believe it or not, turned even more Bearish! I
would really like to like to buy 4 more "PUT" Contracts to bring my holdings to an even 10 Contracts, but to keep the calculations for tracking my investment results simple, I will desist from adding more money to this account.

But for the record, I want it to be known, that in spite of the Market's strong move yesterday, I am even more bearish and ever more confident of my holding of "PUT" contracts on the DIA.

All the Best!
contax

P.S. My other two recommendations, EMA and ROBV are doing OK.

[Options2Wealth]

OFF TOPIC:

Sometime back, I had recommended the stock in a company called
eMagin (EMA). The stock is still hovering around the same price
as when I first mentioned it here. (It is presently trading @ 71¢)
I am still just as bullish on this stock as I was then and I expect the next leg up in it's share price soon.

Also, I have another penny stock which I would like to share with
all those who follow my thread. The name of the company is Robotic Vision and it last traded for a mere 42¢.

I am long on both these stocks and strongly feel that they both have great potential as speculative plays.

All the Best!
contax

[Options2Wealth]

UPDATE:

The first trade in this experiment to test my trading
system (Bought 2 Calls) was initiated on February 19th.,
2003 and the next trade (Bought 5 additional Calls) was
made exactly a month later on March 19th. Along with the
broker's commissions, I have so far invested a Total of $5770.00

Since the idea behind this experiment is to test my Trading
Signal, the best way to judge will obviously be to see what
happens to my initial Capital outlay. On February 19th. 2004
the 1st. Anniversary of the initial trade, I will take stock
of my trading system's effectiveness. We shall see if my
initial Capital of $5770.00 has appreciated or depreciated.

We shall know in another 10 months...

Regards to All who are keeping an eye on my System.

contax

[Options2Wealth]

New Trade!

I just Bought 6 Contracts of 04 Jan 88.00 (YCK MJ-E) PUTS for $8.70 per Contract for a Total Cost of:

6 Contracts (YCKMJ) (PUTS) x $8.70 = $5220 + $125 (Commission) = $5345

I am also left with $270 in Cash After selling my CALLS and Buying the above PUTS.

All the Best!
contax

[Options2Wealth]

UPDATE:

I just sold my position for a loss! <Gulp!>

I sold my 7 Contracts at $8.20.

7 Contracts x $8.20 = $5740-$125.00(Commission)= $5615

My Previous Two "BUY" Trades cost me: $1645.00 + $4125 = $5770
(Including Commissions)

Net Profit/Loss = $5615 - $5770 = ($155.00)

NET LOSS = $155.00

contax

[Options2Wealth]

OFF TOPIC:

There is a Micro-Cap Company on which I am very bullish. I have
owned shares in this company for almost a year and it's share
price has been anything but steady during this period.

Anyways, I thought it may be a good idea to share this little
Gem with my friends on this board: The name of this company is
eMagin Corporation. It is traded on the AMEX and it closed
yesterday @ $0.72. The symbol is EMA.

All the Best!
contax

[Options2Wealth]

UPDATE:

Now that my indicators have turned more bullish
than when I first reported on this thread, I just
decided to Buy 5 more Contracts of 2004 January 80.00
Calls (YCKAB) @ $8.00

Total Cost= $8.00 x 5 = $4000.00 + $125 (Flat Commission) = $4125

Including my Previous Purchase of 2 Contracts of 2004
January 80.00 Calls (YCKAB) @ $7.60 which with commission
cost me $1645.00, I now have 7 Contracts of 2004 January 80.00
Calls (YCKAB). My average cost per Contract, including $250.00
commission comes to $8.24

Also, I have decided to change the way I report my
trades on this thread! Instead of posting my intension
to make a trade the night before, I will, from now on
post my trade immediately after I have made them! This
way I will be better able to take advantage of the markets
changing dynamics.

Hope you will all understand...

[Options2Wealth]

UPDATE:

Still no change in my Market Direction Signal! In spite of
all the red, my Signal still points to Higher Prices in
the near term! (Near term is 1-2 months.)

I was not kidding when I said that this was a low
maintanance System!

All the Best!
contax

[bbgold]

Hi Contax,
Thanks for the explanations. I noticed last year how having some long term Leaps could have been profitable and helped eliminate the speculation of exactly when the market signals might change month to month. I hope that your system will be profitable for you. Do you set a sell target for the trades or just wait for your sell signal to trigger?
Good Luck Contax! :^)

[Options2Wealth]

Hello Bernard,

>>Welcome back, contax! I'm still watching. I've read the iBox
info... just wondering, on average, how long will each round
trip trade take in your system?<<

Good to hear from you again! And thanx for the welcome!<smile>

On average, each round trip trade takes about a month.
It may be take as little as two weeks and as much as two months.

Thanks for the query and please do stay in touch...

Regards,
contax

>>Welcome back, contax! I'm still watching. I've read the iBox
info... just wondering, on average, how long will each round
trip trade take in your system?<<

[Options2Wealth]

Hi Bbgold,

>> How did you do today? It certainly was a volatile day and
it looks as though your Calls closed fairly close to where you
bought them. I was wondering what happened to you and the QQQ
board. Bernard and I have still been working on the MKTSS board.
Are you open to discussion as to what you look at for Long or
Short signals? When you open a trade do you set any type of stop
loss limit on the trade? I wish you much success with the board
<<

Thanks for stopping by and I appreciate your good wishes!

As you observed, my calls closed at almost breakeven on a very
volatile day. But since this particular trade of mine is based
on a Signal that once given, holds steady, relatively speaking,
for an extended length of time (longer than a couple of weeks
in most instances), I am not as concerned as I was with my
previous System which changed direction half a dozen times
a day!

Speaking of the QQQ Board, my timing of starting that thread
could not have been worse; and on top of that the pressure of
trading a few times a day was just too much. By the end of the
trading day, I would get totally exhausted. My hats off to those
who day trade, 'cause I certainly could not hack it. Even though
that System of mine held a lot of promise, and with a little
more tweaking could have, I believe, worked quite well. But the
daily grind was what made me pull the plug on it.

Thus this new System which is most worry free for me. As you
may have noticed, right after I got my new "Buy" signal, the
Markets took an almost 200 point bath. But I was not a least bit
worried with my "Buy" decision and since I have a lot of time
on my Options, I am quite content with my trade and am fairly
confident that this trade will make me money!<gulp>

I work with a slew of indicators like Weekly RSI, MACD,
Stochastics, Bollinger Bands etc., and my System is based
upon an amalgamation of those indicators. And no I don't set
any stop loss limit on any trade based on my System's Signal.
A case in point is my most recent Buy. Had I set a stop loss
limit, chances are that I would have been taken out of the
trade for a loss. But since I did not have a stop loss limit
set, my "Buy" is now breakeven. And of course since I have
almost a year of time on my Call options, I can weather the
occasional gail force wind buffeting my trade.<gulp again>

Thanks again for stopping by...

Regards,
contax

[Bernard Ng]

Welcome back, contax! I'm still watching. I've read the iBox info... just wondering, on average, how long will each round trip trade take in your system?

[bbgold]

Hi Contax,
How did you do today? It certainly was a volatile day and it looks as though your Calls closed fairly close to where you bought them. I was wondering what happened to you and the QQQ board. Bernard and I have still been working on the MKTSS board. Are you open to discussion as to what you look at for Long or Short signals? When you open a trade do you set any type of stop loss limit on the trade? I wish you much success with the board :^)

[Options2Wealth]

Though the Markets are in a tailspin, my Signal
still points to an "UP" Trend! Until I get a New
Signal, I am going to maintain my Long position.
As I write this, The Dow is down about 100 points
and has fallen below 8000 to around 7900!

contax

[Options2Wealth]

Trade Initiated!

I just got confirmation on my Order to
Buy 2 Contracts of 2004 January 80.00 Calls (YCKAB)
@$7.60

Total Cost= $7.60 x 2 = $1520.00 + $125 (Flat Commission) = $1645

I know that Discount brokers can cost a fraction of that amount.
My Option broker is a Full Commission Broker who charges me
a Flat commission on Options. Even though I use a discount
broker when trading equities, but when it comes to trading
Options, I prefer a good old fashioned broker.

contax

[Options2Wealth]

Some of you may recall that in late 2001, I had a started a
thread on iHub called "A Daytrading System for Trading QQQ."
I received a lot of encouragement and support from the posters
of iHub when I started that thread and too all those Wonderful
People I want to take this opportunity to say Thank You!

To all those of you who tried to follow my System, I want to
apologize for abandoning that board so abruptly and for not
giving any explanation for my sudden departure from the very
thread that I started. The reasons are too numerous to recount
here now, but suffice it to say, that my timing of starting the
thread left a lot to be desired. Also the stress of day trading
took a toll on both my mind and body.

Almost a year and half later, I am in a lot better frame of
mind and I really want to share my New System with all you
GREAT folks here on iHub! As I explained in my thread's intro,
this System works for me because it is a LOT less stressful
and also it works a LOT better than the old one. Also being a
glutton for punishment, I couldn't resist coming back to my
old haunts to get roasted!

I sincerely hope that all of you who supported me in the past
will give me another chance and follow my new System with the
same interest that you took in the last one. Also, as always
I Welcome ALL your critical comments and suggestions...

Sincerely,
contax

[Options2Wealth]

Hi to All,

Today, my "System" gave me a "Change of Trend" signal! What
that means is that, according to my System, the recent downward
trend of the market has turned and the markets have started
an upward move. I don't have the foggiest idea as to how long
will this new new trend last, but I do believe that it will last
long enough for me to make a few bucks.

Therefore to take advantage of this new trend, I will, sometime
during the trading day, initiate a trade in any one of the
following DIA "CALL" options:

(The underlying DIA stock closed on Tuesday @ $80.85)

a) YCK AX-E (2004 January 76.00 Call) @ around $10 (Last trade $10.20)

b) YCK AB-E (2004 January 80.00 Call) @ around $8 (Last trade $7.70)

I will buy 2 contracts of either of the above named options and spend about $2000, give or take a couple of hundred dollars.

As soon as I make the purchase, I will post the trade here...

contax