Monday, May 22, 2006 9:30:05 PM
AJ,Cruz&All - My Scamman R3 Notes
Summary First and Then The Messages!
SCAMMAN SAID: My Rule of Three stipulates that when the put-call ratio on any of the key indexes - DJX, SPX and NDX - is 3 or higher on a closing basis, there will be a sell-off within 3 sessions.
* * * * * * * * * * * Yes - a p/c ratio of 3 or higher on the = = = = DJX/SPX/NDX = = = = will result in a sell-off in 0-3 days. * * * * * * * * * * *
BTW, the "Rule of Three" applies to * * * * CME SPX options on futures * * * * * as well!
SCAMMAN SAID: My Modified Double Deuce theory is that when the Arms Index on either NYSE or Nasdaq is 2 or higher on a closing basis on back-to-back sessions, there will be a significant rally within 3-5 sessions.
SCAMMAN SAID: What I did say, is that "if you get both on the same day, I would give the upside the benefit of the doubt, because DD, especially 3D, is so rare". But I have always said that you should use these signals in conjunction with at least S&R levels - so wait for the reversal. The R3's are very strong in a vicious bear market, and what I said is that if you are unable to follow the market, you can enter an order to buy puts on the following open. If you have the luxury of following the market tick by tick - as I do - you can use the Opening Range technique which I have explained in meticulous detail.
CBOE.com ---> Market Data --> Market Statistics Gets you CBOE OEX,DJX,SPX,NDX, Total Equity Options, and Total INDEX Options.
CME.COM -- > Quotes --> End-Of-Day Data -->Daily Settlement Prices -->index products STEP 1: S&P 500 Index : STEP2: options --> GO
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From: scamman Replying To : dbc (post 4574) Nov 8 2002 12:34AM In what seemed to have been Bull starting again - MY WORDS
Title: re r3
Hi db - Last night, Jeff Cooper, who in my estimation is the smartest stock market seer alive, wrote: "On Wednesday, the S&P closed right at the 924 "square" on the Gann Square of Nine chart.....The market is poised for follow-through. They're not giving the bears or the bulls a breath. They won't give the bulls a pullback, and they've got the bears in a chokehold."
But you flagged Tuesday's r3 - and the rest is history. I saw some floor-guy on one of the biz channels say that the sell-off was "overdue" and "expected." The beauty of r3 is that it gives you a "heads up" as to what "da boyz" are up to. I just keep it in mind and watch how price behaves @ key numbers. And Foot has been pounding the 925 area!
Thanks for the kind words
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From: scamman Replying To : kenwong (post 52255) Jul 19 2002 9:19AM
Title: re R3 & All That
Hi Ken:
Yesterday is a classic example of the "Perfect Storm" in the put/call world - CBOE equity calls traded a whopping 102,324 contracts more than CBOE equity puts! "Da Boyz" selling calls like crazy because it's free money! As I have said many times before, this type of "Runaway Call Selling" always ends badly - and soon! ("The Queen Fool" uses my term - without attribution, of course!) And we got an R3 on the "100 percenter" to boot - 5.3 to be exact.
As Hari knows, I'm not a happy camper about discount prophets casting aspersions on my methods! Lord knows no good deed goes unpunished - but if you are really interested, check my previous posts - all sources pertaining to R3 are free and open to the public, and explained in great detail.
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From: scamman Replying To : denmo83 (post 4596) Nov 8 2002 1:53PM
Title: OT/CSR
Hi denmo, Thanks. (Please see my reply to King for an explanation of my absence.)
BTW, on Wednesday, CBOE traded 626,078 equity calls vs. 326,989 equity puts! That's almost 300K more calls than puts - a "CSR" if ever there was one! And bam - down it goes.
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From: scamman Replying To: spcwby (post 53736) Aug 6 2002 1:29PM
Title: OK,OK..........
Hi Cowboy,
I'm still in transit mode, so this will be it for now:
R3: Triggered on Friday by closing p/c of 3.33.
Pop & Drop: Nice opening pop, but it was hasta la vista to first hour's high (FHH) shortly thereafter. Spoos stayed below pivot, and even if you took the "more conservative" break of first hour's low (FHL), you did pretty good.
DD: NYSE closing Trin for the last 3 sessions: 3.81, 1.96, 2.55 - for a 3-day average of 2.77.
Nasdaq closing Trin for the last 3 sessions: 2.44, 1.50, 2.30 - for a 3 day average of 2.08
there will be a significant rally within 3-5 sessions. -- Wed to Fri ??
Nasdaq had a 90% down day to boot, with an A/D ratio of .10; NYSE not too far behind with .13.
Front Run? OK!: In spite of the 90% down day, NDX held up pretty well, especially in the critical last 2 hours. NDX cash closed @ 857, but NDX futures closed @ 865, helped by post-cash close buying.
P/C Complex: Wow, yesterday NDX traded 3,729 CALLS - yup, calls - but only 929 puts. Da Boyz!
QQQ LEAPS traded 18,444 CALLS - yup, calls - but only 1,000 puts. Da Boyz?
Most active QQQ call @ CBOE was Sept 22, a whopping 84,388 contracts!
But most active QQQ put @ CBOE, Sept 21, traded only 12,770 contracts.
Peripheral Vision: $ bounced off uptrending 10 DMA; Fed did a 3-day RP of $5.25, and VIX closed below 50.
Don't worry too much about "guru's": Art Cashin was whining yesterday - "no buyers". If you are a trader, you don't need no stinkin' buyers! Remember July 5th? And "Big Mac" brother Larry McMillan wrote last Friday: "If the OEX closes below 440, long positions should be liquidated..." Yesterday, the OEX closed @ 418.56, after a fortune-making, delicious drop of 15.49 points. Just for kicks, if you could risk about a buck - you could have bought August 465 calls @ 1.1 after the cash close - and sold 'em earlier today for 2.75! To be sure, no widows or orphans need apply - but, hey, you're a "Dragon Tracker" - aren't ya?. Und so weiter.....
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From: scamman Replying To:lanceboo(post 52985) Jul 24 2002 4:41PM
Title: The Price Is Right - Always!
Hi Lance - Here's a slap back! I gotta say, I miss California - I'm going back there in a couple of weeks to look for a house within walking distance of University Ave in Palo Alto.
I'm not to too crazy about the "Turtle" traders, but I share their respect for price. One of the most spectacular examples of single-variable analysis is Enron - if you plot price, and then draw an uptrend line - it broke an uptrend line going back to the 87 crash late last summer. The longer, the stronger - and violation of a 14-year trend line technically means the underlying is undergoing serious distribution. And now we all know insiders were selling Enron as fast as they could. Try looking at CSCO/SUNW/ORCL et al in 2000-2001. Wow! One variable!! Smarter than all the talking heads in the world.
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From: scamman Replying To : denmo83 (post 52965) Jul 24 2002 4:02PM
Title: of 776 & "Da Flow"
Hi denmo - Sorry, had trouble logging on to CS earlier. Thanks for the kind words!
My "Just Look At It" - price, that is - method pretty much gives you the answer. While a "V" is usually deployed to shake out weak longs following a "W", we have higher lows and 776 - 50% of the all-time high on the S&P - is too significant a number to be taken lightly.
On the "Flow of Things": Once Buffet's 600 million dollar shorts sliced the market thru 1050 in early June, 1000 came into play - once that key millenial round number support was taken out, September 2001 and October 1998 lows of 939-945 came into play; once those were gone, there was nominal round number support at 900; once that was taken out, there was really no meaningful support until 50% or 776. The S&P put option volumes this week has been at "cashing in" levels. As usual, the market over-does it on the way up and on the way down. We remain vulnerable to negative headlines, and "Da Boyz" may try to bring the train back some, but you know which "station" to look for if that happens!
From: paperprophets Jul 24 2002 10:25AM
Title: DD/R3 (classic) forward test
This is for classic R3/DD put forth originally by Scamman. New fangled R3 and the 'Perfect Storm' are another story. R3 signal (on DJX of course) for 7/23/02.
For the record, the DD/R3 trades and returns. 'S' is a sell based on R3, 'B' is a buy based on DD. Prices are for QQQ at the Open the day following when the signal is given.
Date Sig S/B Open Close Net
6/27/02 R3 S 26.00 23.85 +9.01%
7/3/02 DD B 23.85 26.20 +9.85%
----- (see footnote 1) ------
7/8/02 R3 S 26.20 24.99 +4.84%
7/10/02 DD/R3 B 24.99 21.82 -14.52 %
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7/23/02 R3 S 21.82
(see footnote 2)
7/8/02 R3 S 26.20 24.99 +4.84%
7/10/02 DD/R3 Flat
7/11/02 DD B 23.76 21.82 -8.89%
(see footnote 3)
7/8/02 R3 S 26.20 23.76 +10.27%
7/11/02 DD B 23.76 21.82 -8.89%
* When DD/R3 both signal on the same day I am tracking three different approaches to handling this contradiction.
(1) DD always overrides R3 signal, ie. close short and go long
(2) Go Flat - close current open position and wait until a DD or R3 signal is given alone
(3) Maintain Position - stay in current position until opposing signal (DD or R3) is given alone.
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From: scamman Replying To : kenwong (post 52255) Jul 19 2002 9:19AM
Title: re R3 & All That
Hi Ken:
Yesterday is a classic example of the "Perfect Storm" in the put/call world - CBOE equity calls traded a whopping 102,324 contracts more than CBOE equity puts! "Da Boyz" selling calls like crazy because it's free money! As I have said many times before, this type of "Runaway Call Selling" always ends badly - and soon! ("The Queen Fool" uses my term - without attribution, of course!) And we got an R3 on the "100 percenter" to boot - 5.3 to be exact.
As Hari knows, I'm not a happy camper about discount prophets casting aspersions on my methods! Lord knows no good deed goes unpunished - but if you are really interested, check my previous posts - all sources pertaining to R3 are free and open to the public, and explained in great detail.
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From: scamman Replying To : paperprophets (post 52422) Jul 19 2002 2:17PM
Title: re dd- da- da
Hey PP - You do what you like - actually, I like what you do because by confounding the issue, the intellectually lazy have to work just a tad harder for the low-hanging fruit!
However, I do not like to be misquoted - I never said "DD" overrides "R3" and that you should cancel all shorts and go long! I've been posting "crash alerts" for a while and it would be Hall of Fame Stooopid to cancel all shorts. Hell, I just sold the last of the July puts which I bought in May! What I did say is that if you get both on the same day, I would give the upside the benefit of the doubt, because DD, especially 3D, is so rare. But I have always said that you should use these signals in conjunction with at least S&R levels - so wait for the reversal. The R3's are very strong in a vicious bear market, and what I said is that if you are unable to follow the market, you can enter an order to buy puts on the following open. If you have the luxury of following the market tick by tick - as I do - you can use the Opening Range technique which I have explained in meticulous detail.
You may be the one who said sarcastically "what the hell is the flow of things anyway" - well, one thing "the flow" shows is 2-bar rallies on the S&P. If you're up late, try to catch Bill McLaren on CNBC-Europe - he has some some fabulous charts showing that. And brother Haggerty - a pro's pro - always speaks of "confluence" - so look for confluence!
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From: scamman Jul 22 2002 4:41PM
Title: "Flabby" Signal!
On Sunday, Dear Old Flabby Abby appeared on CBS's "Faze the Nation" and reiterated her good old undervalued "BUY" signal. And I was licking my chops because I knew that would only fatten my puts!
The ONLY value the clown has left is this: 1) At some point during the waterfall stage, Abby will "lower" her target. 2) The "news" will be used to gut the market big time, and 3) a reversal at the 2.0/3.0 VB will follow. That is, "Da Boyz" will as usual use her to put in a bottom. The mechanics of dissemination will likely be different as well - 4) no lowering of target on Faze the Nation - it will be a faceless wire report, perhaps an hour before the open - and Maria will doubtless breathlessly "break" it on TV.
If you reach for the "low-hanging fruit" and keep tabs on the R3's, you will be positioned to make a fortune on that leg - just as you would be on the leg down in March 2000, December 2000, February 2001, September 2001, and May 2002.
Ah, the downside magnet - 776, i.e., 50% of the S&P all time-high - beckons. And we got the 20-yr, 4-yr and key anniversary dates converging in August. Confluence, anyone?
From: scamman Replying To : OAKPRO (post 52961) Jul 24 2002 1:58PM
Title: Harry, We Hardly Knew Ye!
Harry - A friend of mine who works at BBC Bush House just called for a radio interview on the reversal - of course, I told him he's nuts if he thinks I'll go public! I did tell him that if he followed this board, he would know to pile in at 776! Now he wants me to invest for him - which I won't.
Anyway, good luck to ya. I know the older you get, the harder it is to keep an open mind. In a vicious bear market, it pays to sell calls and buy puts. The best time to buy LEAP calls is usu. during the Sept-Oct lows, altho this year the 20-yr, 4-yr and key anniversary dates kick in just a little earlier. You basically wasted your money on those calls.
As a good doctor - which I trust you are - you get to touch lives in ways that us lesser mortals can only imagine. An old Brahmin once told me that if you produce just one good student, you are a success as a teacher! I figure I produced a few good ones, but even that's not quite the same as saving lives. If I don't talk to you again, let me take this opportunity to ask you to look past the pot shots I took - sometimes my vanity gets the better of my sanity! I honestly did feel you could have done a whole lot better if you got it. In any event, you came out ahead - and fared better than a lot of poor souls. Live, prosper - and share!
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From: mr_cassandra Replying To : patelcg (post 50808) Jun 28 2002 5:35AM
Title: re upsurge
One thing Ive been back checking re the rule of 3 is using some other indicator to help with trade timing. IMO you can use trin as a crosscheck: IE if you've gotten the rule of 3 signal, then wait for a low trin before making your move.
I would define low as having reached a low reading that thru your own back checking, you would say was the common low trin reading before a selloff.
As I've found that various sites seem to show different trin numbers, I'd recommend you use only one if trying to make such judgements.
From: mr_cassandra Replying To : patelcg (post 50816) Jun 28 2002 7:56AM
Title: depends on where you are working
IE I've seen a comment by scamman where he feels the tringq is a weak sister to the trin and I can agree with that. This subject applies to the double-deuce signal.
For my part, I'm using just the trin re trade timing within the overall rule of 3/double-deuce reasoning.
From: hour_of_the_wolf Replying To : patelcg (post 51177) Jul 5 2002 7:51AM
Title: Correct on Genie
Scam has done some great work, will take his advice to 'pipe down' ; lest too much publicity ruin a good thing.
I agree with your observation on the subject you brought up and echo your thanks to scamman.
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From: scamman Replying To : NgAnV (post 42931) Mar 25 2002 6:09PM
Title: re p/c & s/r levels
Hi Van - I would be less inclined to rely on p/c data alone to determine which index has more decline in store! However, I note that as of Friday's close, the April 35 QQQ calls had open interest of 35,858 contracts, while the April 34 calls had an open interest of only 9,146 contracts. Such a paltry volume is basically meaningless from a support/resistance perspective, while "meaningful" support on the DJX does not kick in until the April 100 put strike, which has an open interest of 36,787.
I emphasize, however, that these are moving targets,
********************* based on open interest at day's end. !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
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From: scamman Replying To : screentrader (post 46378) May 14 2002 2:34PM
Title: the Double Deuce
Hi Screen - Thank you for the compliments - certainly Vess, Foot & Fund are deserving of high praise for their consistent efforts. And there are many others as well! I am just an amateur, and I have learned the hard way. I have found a few things that seem to work - so I share them with anyone who cares to steal money from the market-makers!
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
BTW, speaking of buy signals - the "Double Deuce" has worked like a charm this month!
My Modified Double Deuce theory is that when the Arms Index on either NYSE or Nasdaq is 2 or higher on a closing basis on back-to-back sessions, there will be a significant rally within 3-5 sessions. The Nasdaq Trin on May 1st was 2.07; on May 2nd, 5.77; on May 3rd, 2.86 - got the rally on May 8th; on May 9th, 2.70; on May 10th, 4.24 - got the rally May 13th-14th.
Of course, the Rule of Three kicked in basis the Dow on May 8th. Again, regardless of which index or exchange triggers the signal, I will trade the OEX.
I agree with Vess that it is silly to talk about a "new" bull market based on the Double Deuce, but it sure as hell can make you a lot of money on a short-term basis! Which, after all, is what Arms or Trin or STI is - a short-term trading index! (The OEX May 535 call hit a low of 1.65 yesterday - and a high of 10.40 today!)
Use the Rule of Three and the Double Deuce - and you've got'em coming and going! And you can go diving wherever and whenever you want!!
BTW, thanks for the lovely quote from Dickens.
From: scamman Replying To : Ehand (post 46678) May 14 2002 3:59PM
Title: re Rule of Three
Hi Ehand - My Rule of Three stipulates that when the put-call ratio on any of the key indexes - DJX, SPX and NDX - is 3 or higher on a closing basis, there will be a sell-off within 3 sessions.
The rationale is very simple - such an imbalance indicates that the "Da Boyz" have positioned themselves to profit from an imminent decline. Going strictly from memory - the mother of all evidence is that on March 30, 2000, the NDX had a staggering put-call ratio of 13.14!!! That was a "RED ALERT" in my book, and I got out of all longs and went massively short.
I have discussed the rule many times in the past - if you are so inclined, you can review them by entering "scamman" in the "messages by member" field at the bottom and clicking thru.
From: scamman May 3 2002 11:44AM
Title: NDX p/c ratio
On Tuesday, April 30th, NDX traded 1,058 calls versus 6,649 puts on a closing basis, for a p/c ratio of 6.28.
My "Rule of Three" stipulates that when the p/c ratio on any of the three key indices - DJX, SPX, NDX - is 3 or higher on a closing basis, there will be a sell-off in 1-3 days.
The rationale is very simple - such an imbalance indicates that "Da Boyz" have positioned themselves to profit from an imminent decline.
My p&l indicates that this occurs just about every time.
1) All rallies are truly gifts from Allah*; and
2) Short every rally!
*Until we get multiple closes above 1175, basis SPX, and the chance of that happening anytime soon is absolute zero.
From: scamman Replying To : TheQueenFool (post 52628) Jul 22 2002 2:08PM
Title: SOURCE OF R3!
Queen - I know you "bait" me all the time - and I always take the bait - but just for "asking nice" I will give the keys to the gold mine to all members of this board once again! I referenced it many times before, but y'all know the 10% Rule! OK, so here it is:
1. GO TO CME.COM;
2. SELECT QUOTES;
3. SELECT END OF DAY DATA;
4. SELECT DAILY SETTLEMENT PRICES;
5. UNDER "INDEX PRODUCTS", SELECT S&P 500 INDEX (Step One);
6. SELECT "OPTIONS" (Step Two);
You will see that on Friday, 8,688 calls traded, versus 34,020 puts, for a p/c ratio of 3.915. No retail morons here - options on futures are all-pro.
I don't give a crap what a "mechanical" system based the p/c ratio might conclude, but I use it in conjunction with S/Rs, VBs & (Opening Ranges) ORs ("confluence") - and I make a nice chunka change - and so can you! Now, who the hell do you know on this board that gives the keys to the gold mine for free - and again and again?! Not "noble1"! LOL
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S/R = Support/Resistance, VB = Volitility Bands, OR= Opening Range !!!
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Mr. Cassandra and Hari Seldon can breathe free now - but I will honor my promise to the two of you re my "Overnight Killing (OK)" technique in time.
BTW, Queen - it's not that I "couldn't join" Da Boyz on the Street - I just prefer to trade buck naked within the confines of my bedroom! You don't want me to make Flabby Abby blush, do ya?! Enjoy.
Hi Noble - Sorry about the "hubris" yesterday, but note that while the retail-infested EQUITY-ONLY p/c ratio was .68 (527,689 calls), the S&P options on futures, used by the pro's, had a p/c ratio of 4.9.
There's no helping some people, is there?!
Title: equity-only p/c
As of 10:30, the EQUITY-ONLY p/c ratio is .898 - call it .9.
I want to see it CLOSE @ 1 or higher to confirm a cycle low.
The theory is very simple - when enough morons buy puts - "Da Boyz" will kill 'em by taking the market up!
The time to buy puts was thru yesterday, not today - when the IV's are marked up!
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From: scamman Apr 25 2002 8:59AM
Title: Christmas in April!
Oooooh Yeaaaah.......Let's Do The Time Warp Again!!!
Holding 100 May 560 OEX puts since last Friday - as stated yesterday, will dump today. Trade rationale: 1) Intraday SPX p/c ratio; 2) Usual post-exp. selloff; 3) "Short every rally" mode.
Would be nice if Flabby Abby or Ralph Bullsh*tprone "Downgrade" their "targets" sometime today - that way you know it's an "official" Uncle Sam-approved cycle bottom.
BTW, the ONE put-call statistic y'all - and that includes you too, Queen - should look for today: the EQUITY-ONLY put-call ratio MUST be 1 or higher on a CLOSING basis.
OAKPRO -You consummate braggart - you sold a day too soon!!!!
As of 3:30 PM, DJX traded 5,760 calls vs. 18,216 puts. Surprise? Not!
BTW, the "Rule of Three" applies to * * * * CME SPX options on futures * * * * * as well!
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From: scamman Replying To : hari_seldon (post 52017) Jul 16 2002 11:39PM
Title: re genie!
Hari, Old Chap - You got my number! Wouldn't you know it, my "100% of the time" indicator hit R3 yesterday (3.26 to be exact), but no one posted it! Lord knows I've discussed said indicator in more than just a "stream of consciousness" way many a time. I'm just glad the "10% Club" - and the "prophets" as well - are keeping it to themselves.
BTW, yesterday the 3.0 Volatility Band basis the SPX was 876 - and voila! - the low of the day was 875.50. Only time this year that the "3-oh" has been hit. I owe Brother Haggo big time for that one! Bought some July 475's on the 5th @ 4 - they hit 40 yesterday. If the bungee keeps swinging like this, I'll have to come out of retirement just to get back into it! Did Flabby Abby & The Pimps set it up with their "Buy!" call or what?!
Of course, there really is no such thing as "R3". Reminds me of the priceless "Punch Goes Red" edition of 1973, which said, inter alia: "There is no such person as Public Enemy No.1 Edward Heath, who is currently in a Re-Education Camp on the Isle of Wight." LOL
Back in the bottle I go.....
From: scamman Jul 17 2002 1:00PM
Title: Gap & Crap!
Wow, S&P down 30 points in 3 hours! While Greenspan's yapping "reassurance" to boot!
The "Opening Range" technique which I detailed a few weeks ago sure came in handy.
As expiration weeks go, the "Coast-to-Coast" moves this month have been truly outstanding! A few more months like this - why, I might quit just like Bucky the Clown!
Thanks to "Da Boyz"!
From: scamman Replying To : mshaw05 (post 52212) Jul 17 2002 11:39PM
Title: re free money
Hi Mike, Read my July 2, 2002 post no. 51182 re "Opening Range". In Star Trek, Space Is The Final Frontier; In the Stock Market, Price Is The Ultimate Arbiter. A great Guru taught me to "Just Look At It" - at price, that is. When price hits the First Hour's High or Low, it will typically do one of two things - bounce or break. Since "Pop & Drop" or "Gap & Crap" and their obverse, "Bungee" or "Trap Door" opens are among the all-time favorite Wall Street scams, if you follow the First Hour's High and Low carefully, you don't need to know much else to make a killing.
Today is a perfect example - you would have to be brain dead not to realize that the 200 point gap up was totally bogus and nothing but a trap - sure enough the S&P dropped 30+ points in 3 hours! Since this is expiration week, the front month out-of-money options were pretty cheap during the "pop" and increased dramatically in value during the ensuing drop, as they turned in-the-money. I made more money in 3 hours than the per capita income of most countries of the world - including Bucky the Clown's Rio de Oro! Now, I don't recommend fooling with options which expire in 2 days until you know what you are doing, but that's the payoff.
SEE NEXT POST BELOW Starting At XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
July 5th is an example of another kind - the idiots ran it up 325 points on a half day! The only day in recent memory when the S&P violated the 2.0 Volatility Band on the upside. Needless to say, it also generated an R3, but the intraday P/C configuration was so lopsided that I bought the OEX July 475 puts @ 4 ($400 each). On the following Tuesday, I sold half @ 8 ($800 each), so that I had a "Free Trade" - that is, I recovered my principal and had nothing to lose. I let my profits run, eventually selling residual contracts @ 40 ($4,000 each), a "ten-bagger" in a matter of days.
I don't intend to make it sound too easy, but what the hell am I supposed to do when the clowns run it 325 points on a half day - and buy puts like hell at the same time? To paraphrase GM's good old Al Sloan, Find A Scam - And Follow It!
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OR Technique
From: scamman Replying To : paperprophets (post 51171) Jul 2 2002 1:11PM
Title: go w/the flow - the Opening Range
Hey PP - Go with the flow! And your "mo jo" will get rolling!
Yesterday, I referred to the "Opening Range" Technique.
1. "Opening Range" refers to the high and low of the First Hour.
2. Market opens @ 9:30.
3. First Hour ends @ 10:30.
4. Note the High & Low of the First Hour. You can get that from something called a "quote" service.
5. Watch for tests of the FHH (First Hour's High) and the First Hour's Low (FHL).
6. Today, the FHL basis the SPX was 956.37.
7. Note that FHL was violated to the downside on the third try around 11:30. The break was projected by the "bear" cross on the 50- and 200- period SMA's on the 15 min.
8. Once it broke, downside targets were the 1.25/1.5/2.0 Volatility Bands @ 954/951/946.
9. LOD (low of the day) is 946.41, which also created an MACD divergence - lower price low but higher oscillator high. If you went short @ 956 and covered @ 946, you got a nice 10 points in a matter of minutes.
10. As for index p/c ratios - the "straight" answer is that they are nowhere to be found - you have to do them for yourself.
11. No, I'm not coming over and doing them for you!
Replies to this Post:
51184 mojo jojo
from paperprophets on Jul 2 2002 4:03PM
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From: scamman Replying To : spcwby (post 52228) Jul 18 2002 2:54AM
Title: re refs
Hi Cowboy, Your seemingly innocuous question is a bit like the proverbial wife asking if the dress makes her butt look "too big" - there's no right answer! It is difficult to suggest "appropriate" material without knowing where you are in the curve. Taking you at your word that you are a beginner, I suggest William J. O'Neill's "How To Make Money in Stocks" and John J. Murphy's "The Visual Investor." For fun beach reading, try Charles Mackay's classic "Extraordinary Popular Delusions and the Madness of Crowds" - which should provide some "perspective" on our beloved Nasdaq bubble.
Two subscription sites which are quite good are tradingmarkets.com and realmoney.com. I think their basic versions are around 200 bucks per year, a fair value in my opinion. While I subscribe to premium versions of both sites, I am obviously not "endorsing" either - you should draw your own conclusions with free trials.
Thanks for the compliment, but the "database" is no accident - I do read quite a bit! Doubtless a hangover from my previous incarnation as a college teacher. Which reminds me - Alan Watts, the late British Buddhist, was once asked: "So, do you believe in re-incarnation?" Watts replied: "I didn't believe in re-incarnation in any of my previous lives - why should I believe in it now!"
From: scamman Replying To : hour_of_the_wolf (post 43487) Apr 5 2002 3:09PM
Title: re djx p/c
Hi Wolf - Boy, that last half hour was interesting! Even Linda went from a "sell day" before the open to "aggressive buy" for a scalp on the NDX futures. On top of that, a delayed CBOE report indicated that as of 2 PM, DJX had traded 12,102 calls versus 9,463 puts (.78)! So I check the strikes and I can't find the trades! Sure enough, As of 2:30 PM, DJX traded 2,356 calls vs. 9,797 puts (4.15) - so that 2 PM number is just a typo.
* * * * * * * * * * * Yes - a p/c ratio of 3 or higher on the = = = = DJX/SPX/NDX = = = = will result in a sell-off in 0-3 days. * * * * * * * * * * *
Ideally, you want to use closing values, but the market is now largely an intraday affair, with hedge funds and mutual funds which act like hedge funds completely in control. As Pisani was just pointing out on CNBC, this week program trading accounted for over 30% of NYSE volume. Intra-day ranges are becoming more interesting than inter-day ranges. For example, I bought a bunch of OEX April 560 puts @ 5 and sold them @ 7, and they promptly dropped back to 5! Likewise, the Dow high today is 335 while the low is 217 - nice 100 point plus range. You have to be wary about position trades nowadays - a strong close leads to a gap down, and a weak close leads to a gap up! They just want to trap you during the "amateur" hour!
(BTW, you can check the program trading data @ the NYSE site.)
From: scamman Mar 25 2002 4:02PM
Title: djx p/c ratio **********************************************************************
Nice to see the DJX p/c ratio "Rule of Three" maintain its "God" status as an indicator!
What is even more comical is that equity-only p/c ratio @ 10 AM was only .42! *************************
From: scamman Replying To : hour_of_the_wolf (post 42923) Mar 25 2002 4:32PM
Title: re djx p/c, tick, Gap & Crap
Hi Wolf - Thanks, glad to be of any help! As I keep saying, the best part is - it's free! I actually feel sorry for the poor devils who bought all those calls in the AM.
A perfect, textbook "Gap and Crap" day - arguably the all-time favorite trick of the scumbuckets. Don't forget the tick, either - hit a high of 401 on the retest (of the opening range high), never to see that level again the rest of the day.
==================
From: scamman Replying To : Wareal (post 52627) Jul 22 2002 1:38PM
Title: ATH Classic Day
Hi Real, Quite right! Of course,
1)on Friday the CBOE EQUITY-ONLY p/c ratio was 1.086, for only the 3rd time this year. You got the "buy" signal, but you know that
2) 400 pts is going to cause margin selling by noon, so
3)use the OR technique for the ride down and the - O/R opening range
4)high-minus tick for the reversal. All spikes are inherently disconfirmatory!
Don't you just love "Da Boyz"?!
BTW, someone asked: how do you know if you are one of "Da Boyz"? If you can drive up to the Fed Window and yell "Fill 'er Up" - and "Just Charge It!" - you are definitely one of the boys.
7/23/02*******************************************************************************
call intraday
EST. VOL VOL OPEN INT.
TOTAL 8910 14936 84206
put intraday
EST. VOL VOL OPEN INT.
TOTAL 30488 36022 128694
call eod
EST.VOL VOL OPEN INT.
TOTAL 9620 14936 84206
put eod
EST.VOL VOL OPEN INT.
TOTAL 31588 36022 128694
*************************************************************************************
From: scamman Replying To : lanceboo (post 1748) Aug 21 2002 3:25PM
Title: Timely BS?
Roy from the pits notes @ 3:07 that "If we get any kind of an upswing before the close, this would be an opportunity to buy put options or put option spreads. I suggest going out to September and looking for strikes in the 870-900 area for a 2-5 day down move."
=========================
From: scamman Replying To : risky1 (post 1753) Aug 21 2002 3:54PM
Title: re low-hanging fruit!
Risky - You going after that "low-hanging fruit" again?! LOL
Congrats.
======================
From: risky1 Replying To : scamman (post 1755) Aug 21 2002 4:14PM
Title: Scamman
Yes, I am going for that "Low hangin' fruit" THANKS to YOU,Scamman.
I am not scared - my name is Risky.
I re-bought the OEX Sep. 470 Put, this time at $11.20.
Thanks again, Scamman
risky
========================
From: Wareal Replying To : scamman (post 1755) Aug 21 2002 4:14PM
Title: Branches falling
Just after 2PM two blocks of 1000 each of the 480 puts went off at $15.50. Zat you scam? Twasn't me, LOL!
======================
From: scamman Replying To : roll_tide (post 1743) Aug 21 2002 2:21PM
Title: Allah.....indeed!
"Da Boyz" have gone from just selling rallies to buying dips as well - Allah be praised indeed!
Now, if He can only get the padres to keep their pants on!
======================
Pick Status Account Type Action Current Quantity Traded Quantity Remaining Quantity Symbol Description Price Time Limit Date Order Number
Approval Order(s)
Pending Margin Buy Put 20.00 - - OXB SEP 450 /PUT S&P 100 INDX SEP 450 CBOE 6.00 DAY 08/22/02 XZC 0006
===========================
950 480
870-900 435-450
OXBUJ - OEX 450 PUT 6.70 - 6.90 Vol of 6208 RYTPX -2X SnP
CLTMG Citicorp Jan 35 Put
Summary First and Then The Messages!
SCAMMAN SAID: My Rule of Three stipulates that when the put-call ratio on any of the key indexes - DJX, SPX and NDX - is 3 or higher on a closing basis, there will be a sell-off within 3 sessions.
* * * * * * * * * * * Yes - a p/c ratio of 3 or higher on the = = = = DJX/SPX/NDX = = = = will result in a sell-off in 0-3 days. * * * * * * * * * * *
BTW, the "Rule of Three" applies to * * * * CME SPX options on futures * * * * * as well!
SCAMMAN SAID: My Modified Double Deuce theory is that when the Arms Index on either NYSE or Nasdaq is 2 or higher on a closing basis on back-to-back sessions, there will be a significant rally within 3-5 sessions.
SCAMMAN SAID: What I did say, is that "if you get both on the same day, I would give the upside the benefit of the doubt, because DD, especially 3D, is so rare". But I have always said that you should use these signals in conjunction with at least S&R levels - so wait for the reversal. The R3's are very strong in a vicious bear market, and what I said is that if you are unable to follow the market, you can enter an order to buy puts on the following open. If you have the luxury of following the market tick by tick - as I do - you can use the Opening Range technique which I have explained in meticulous detail.
CBOE.com ---> Market Data --> Market Statistics Gets you CBOE OEX,DJX,SPX,NDX, Total Equity Options, and Total INDEX Options.
CME.COM -- > Quotes --> End-Of-Day Data -->Daily Settlement Prices -->index products STEP 1: S&P 500 Index : STEP2: options --> GO
************************************************************************
From: scamman Replying To : dbc (post 4574) Nov 8 2002 12:34AM In what seemed to have been Bull starting again - MY WORDS
Title: re r3
Hi db - Last night, Jeff Cooper, who in my estimation is the smartest stock market seer alive, wrote: "On Wednesday, the S&P closed right at the 924 "square" on the Gann Square of Nine chart.....The market is poised for follow-through. They're not giving the bears or the bulls a breath. They won't give the bulls a pullback, and they've got the bears in a chokehold."
But you flagged Tuesday's r3 - and the rest is history. I saw some floor-guy on one of the biz channels say that the sell-off was "overdue" and "expected." The beauty of r3 is that it gives you a "heads up" as to what "da boyz" are up to. I just keep it in mind and watch how price behaves @ key numbers. And Foot has been pounding the 925 area!
Thanks for the kind words
**********************
From: scamman Replying To : kenwong (post 52255) Jul 19 2002 9:19AM
Title: re R3 & All That
Hi Ken:
Yesterday is a classic example of the "Perfect Storm" in the put/call world - CBOE equity calls traded a whopping 102,324 contracts more than CBOE equity puts! "Da Boyz" selling calls like crazy because it's free money! As I have said many times before, this type of "Runaway Call Selling" always ends badly - and soon! ("The Queen Fool" uses my term - without attribution, of course!) And we got an R3 on the "100 percenter" to boot - 5.3 to be exact.
As Hari knows, I'm not a happy camper about discount prophets casting aspersions on my methods! Lord knows no good deed goes unpunished - but if you are really interested, check my previous posts - all sources pertaining to R3 are free and open to the public, and explained in great detail.
=============================
From: scamman Replying To : denmo83 (post 4596) Nov 8 2002 1:53PM
Title: OT/CSR
Hi denmo, Thanks. (Please see my reply to King for an explanation of my absence.)
BTW, on Wednesday, CBOE traded 626,078 equity calls vs. 326,989 equity puts! That's almost 300K more calls than puts - a "CSR" if ever there was one! And bam - down it goes.
**********************
From: scamman Replying To: spcwby (post 53736) Aug 6 2002 1:29PM
Title: OK,OK..........
Hi Cowboy,
I'm still in transit mode, so this will be it for now:
R3: Triggered on Friday by closing p/c of 3.33.
Pop & Drop: Nice opening pop, but it was hasta la vista to first hour's high (FHH) shortly thereafter. Spoos stayed below pivot, and even if you took the "more conservative" break of first hour's low (FHL), you did pretty good.
DD: NYSE closing Trin for the last 3 sessions: 3.81, 1.96, 2.55 - for a 3-day average of 2.77.
Nasdaq closing Trin for the last 3 sessions: 2.44, 1.50, 2.30 - for a 3 day average of 2.08
there will be a significant rally within 3-5 sessions. -- Wed to Fri ??
Nasdaq had a 90% down day to boot, with an A/D ratio of .10; NYSE not too far behind with .13.
Front Run? OK!: In spite of the 90% down day, NDX held up pretty well, especially in the critical last 2 hours. NDX cash closed @ 857, but NDX futures closed @ 865, helped by post-cash close buying.
P/C Complex: Wow, yesterday NDX traded 3,729 CALLS - yup, calls - but only 929 puts. Da Boyz!
QQQ LEAPS traded 18,444 CALLS - yup, calls - but only 1,000 puts. Da Boyz?
Most active QQQ call @ CBOE was Sept 22, a whopping 84,388 contracts!
But most active QQQ put @ CBOE, Sept 21, traded only 12,770 contracts.
Peripheral Vision: $ bounced off uptrending 10 DMA; Fed did a 3-day RP of $5.25, and VIX closed below 50.
Don't worry too much about "guru's": Art Cashin was whining yesterday - "no buyers". If you are a trader, you don't need no stinkin' buyers! Remember July 5th? And "Big Mac" brother Larry McMillan wrote last Friday: "If the OEX closes below 440, long positions should be liquidated..." Yesterday, the OEX closed @ 418.56, after a fortune-making, delicious drop of 15.49 points. Just for kicks, if you could risk about a buck - you could have bought August 465 calls @ 1.1 after the cash close - and sold 'em earlier today for 2.75! To be sure, no widows or orphans need apply - but, hey, you're a "Dragon Tracker" - aren't ya?. Und so weiter.....
*****************************************************************************************
From: scamman Replying To:lanceboo(post 52985) Jul 24 2002 4:41PM
Title: The Price Is Right - Always!
Hi Lance - Here's a slap back! I gotta say, I miss California - I'm going back there in a couple of weeks to look for a house within walking distance of University Ave in Palo Alto.
I'm not to too crazy about the "Turtle" traders, but I share their respect for price. One of the most spectacular examples of single-variable analysis is Enron - if you plot price, and then draw an uptrend line - it broke an uptrend line going back to the 87 crash late last summer. The longer, the stronger - and violation of a 14-year trend line technically means the underlying is undergoing serious distribution. And now we all know insiders were selling Enron as fast as they could. Try looking at CSCO/SUNW/ORCL et al in 2000-2001. Wow! One variable!! Smarter than all the talking heads in the world.
***************************************
From: scamman Replying To : denmo83 (post 52965) Jul 24 2002 4:02PM
Title: of 776 & "Da Flow"
Hi denmo - Sorry, had trouble logging on to CS earlier. Thanks for the kind words!
My "Just Look At It" - price, that is - method pretty much gives you the answer. While a "V" is usually deployed to shake out weak longs following a "W", we have higher lows and 776 - 50% of the all-time high on the S&P - is too significant a number to be taken lightly.
On the "Flow of Things": Once Buffet's 600 million dollar shorts sliced the market thru 1050 in early June, 1000 came into play - once that key millenial round number support was taken out, September 2001 and October 1998 lows of 939-945 came into play; once those were gone, there was nominal round number support at 900; once that was taken out, there was really no meaningful support until 50% or 776. The S&P put option volumes this week has been at "cashing in" levels. As usual, the market over-does it on the way up and on the way down. We remain vulnerable to negative headlines, and "Da Boyz" may try to bring the train back some, but you know which "station" to look for if that happens!
From: paperprophets Jul 24 2002 10:25AM
Title: DD/R3 (classic) forward test
This is for classic R3/DD put forth originally by Scamman. New fangled R3 and the 'Perfect Storm' are another story. R3 signal (on DJX of course) for 7/23/02.
For the record, the DD/R3 trades and returns. 'S' is a sell based on R3, 'B' is a buy based on DD. Prices are for QQQ at the Open the day following when the signal is given.
Date Sig S/B Open Close Net
6/27/02 R3 S 26.00 23.85 +9.01%
7/3/02 DD B 23.85 26.20 +9.85%
----- (see footnote 1) ------
7/8/02 R3 S 26.20 24.99 +4.84%
7/10/02 DD/R3 B 24.99 21.82 -14.52 %
-------------------------------------
7/23/02 R3 S 21.82
(see footnote 2)
7/8/02 R3 S 26.20 24.99 +4.84%
7/10/02 DD/R3 Flat
7/11/02 DD B 23.76 21.82 -8.89%
(see footnote 3)
7/8/02 R3 S 26.20 23.76 +10.27%
7/11/02 DD B 23.76 21.82 -8.89%
* When DD/R3 both signal on the same day I am tracking three different approaches to handling this contradiction.
(1) DD always overrides R3 signal, ie. close short and go long
(2) Go Flat - close current open position and wait until a DD or R3 signal is given alone
(3) Maintain Position - stay in current position until opposing signal (DD or R3) is given alone.
**********************
From: scamman Replying To : kenwong (post 52255) Jul 19 2002 9:19AM
Title: re R3 & All That
Hi Ken:
Yesterday is a classic example of the "Perfect Storm" in the put/call world - CBOE equity calls traded a whopping 102,324 contracts more than CBOE equity puts! "Da Boyz" selling calls like crazy because it's free money! As I have said many times before, this type of "Runaway Call Selling" always ends badly - and soon! ("The Queen Fool" uses my term - without attribution, of course!) And we got an R3 on the "100 percenter" to boot - 5.3 to be exact.
As Hari knows, I'm not a happy camper about discount prophets casting aspersions on my methods! Lord knows no good deed goes unpunished - but if you are really interested, check my previous posts - all sources pertaining to R3 are free and open to the public, and explained in great detail.
************************************************************************************
**********************************
From: scamman Replying To : paperprophets (post 52422) Jul 19 2002 2:17PM
Title: re dd- da- da
Hey PP - You do what you like - actually, I like what you do because by confounding the issue, the intellectually lazy have to work just a tad harder for the low-hanging fruit!
However, I do not like to be misquoted - I never said "DD" overrides "R3" and that you should cancel all shorts and go long! I've been posting "crash alerts" for a while and it would be Hall of Fame Stooopid to cancel all shorts. Hell, I just sold the last of the July puts which I bought in May! What I did say is that if you get both on the same day, I would give the upside the benefit of the doubt, because DD, especially 3D, is so rare. But I have always said that you should use these signals in conjunction with at least S&R levels - so wait for the reversal. The R3's are very strong in a vicious bear market, and what I said is that if you are unable to follow the market, you can enter an order to buy puts on the following open. If you have the luxury of following the market tick by tick - as I do - you can use the Opening Range technique which I have explained in meticulous detail.
You may be the one who said sarcastically "what the hell is the flow of things anyway" - well, one thing "the flow" shows is 2-bar rallies on the S&P. If you're up late, try to catch Bill McLaren on CNBC-Europe - he has some some fabulous charts showing that. And brother Haggerty - a pro's pro - always speaks of "confluence" - so look for confluence!
*********************************
From: scamman Jul 22 2002 4:41PM
Title: "Flabby" Signal!
On Sunday, Dear Old Flabby Abby appeared on CBS's "Faze the Nation" and reiterated her good old undervalued "BUY" signal. And I was licking my chops because I knew that would only fatten my puts!
The ONLY value the clown has left is this: 1) At some point during the waterfall stage, Abby will "lower" her target. 2) The "news" will be used to gut the market big time, and 3) a reversal at the 2.0/3.0 VB will follow. That is, "Da Boyz" will as usual use her to put in a bottom. The mechanics of dissemination will likely be different as well - 4) no lowering of target on Faze the Nation - it will be a faceless wire report, perhaps an hour before the open - and Maria will doubtless breathlessly "break" it on TV.
If you reach for the "low-hanging fruit" and keep tabs on the R3's, you will be positioned to make a fortune on that leg - just as you would be on the leg down in March 2000, December 2000, February 2001, September 2001, and May 2002.
Ah, the downside magnet - 776, i.e., 50% of the S&P all time-high - beckons. And we got the 20-yr, 4-yr and key anniversary dates converging in August. Confluence, anyone?
From: scamman Replying To : OAKPRO (post 52961) Jul 24 2002 1:58PM
Title: Harry, We Hardly Knew Ye!
Harry - A friend of mine who works at BBC Bush House just called for a radio interview on the reversal - of course, I told him he's nuts if he thinks I'll go public! I did tell him that if he followed this board, he would know to pile in at 776! Now he wants me to invest for him - which I won't.
Anyway, good luck to ya. I know the older you get, the harder it is to keep an open mind. In a vicious bear market, it pays to sell calls and buy puts. The best time to buy LEAP calls is usu. during the Sept-Oct lows, altho this year the 20-yr, 4-yr and key anniversary dates kick in just a little earlier. You basically wasted your money on those calls.
As a good doctor - which I trust you are - you get to touch lives in ways that us lesser mortals can only imagine. An old Brahmin once told me that if you produce just one good student, you are a success as a teacher! I figure I produced a few good ones, but even that's not quite the same as saving lives. If I don't talk to you again, let me take this opportunity to ask you to look past the pot shots I took - sometimes my vanity gets the better of my sanity! I honestly did feel you could have done a whole lot better if you got it. In any event, you came out ahead - and fared better than a lot of poor souls. Live, prosper - and share!
****************************************************************
From: mr_cassandra Replying To : patelcg (post 50808) Jun 28 2002 5:35AM
Title: re upsurge
One thing Ive been back checking re the rule of 3 is using some other indicator to help with trade timing. IMO you can use trin as a crosscheck: IE if you've gotten the rule of 3 signal, then wait for a low trin before making your move.
I would define low as having reached a low reading that thru your own back checking, you would say was the common low trin reading before a selloff.
As I've found that various sites seem to show different trin numbers, I'd recommend you use only one if trying to make such judgements.
From: mr_cassandra Replying To : patelcg (post 50816) Jun 28 2002 7:56AM
Title: depends on where you are working
IE I've seen a comment by scamman where he feels the tringq is a weak sister to the trin and I can agree with that. This subject applies to the double-deuce signal.
For my part, I'm using just the trin re trade timing within the overall rule of 3/double-deuce reasoning.
From: hour_of_the_wolf Replying To : patelcg (post 51177) Jul 5 2002 7:51AM
Title: Correct on Genie
Scam has done some great work, will take his advice to 'pipe down' ; lest too much publicity ruin a good thing.
I agree with your observation on the subject you brought up and echo your thanks to scamman.
****************************************************************
From: scamman Replying To : NgAnV (post 42931) Mar 25 2002 6:09PM
Title: re p/c & s/r levels
Hi Van - I would be less inclined to rely on p/c data alone to determine which index has more decline in store! However, I note that as of Friday's close, the April 35 QQQ calls had open interest of 35,858 contracts, while the April 34 calls had an open interest of only 9,146 contracts. Such a paltry volume is basically meaningless from a support/resistance perspective, while "meaningful" support on the DJX does not kick in until the April 100 put strike, which has an open interest of 36,787.
I emphasize, however, that these are moving targets,
********************* based on open interest at day's end. !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
-----------------------------------------------------------------------------------------------------------------------------
From: scamman Replying To : screentrader (post 46378) May 14 2002 2:34PM
Title: the Double Deuce
Hi Screen - Thank you for the compliments - certainly Vess, Foot & Fund are deserving of high praise for their consistent efforts. And there are many others as well! I am just an amateur, and I have learned the hard way. I have found a few things that seem to work - so I share them with anyone who cares to steal money from the market-makers!
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
BTW, speaking of buy signals - the "Double Deuce" has worked like a charm this month!
My Modified Double Deuce theory is that when the Arms Index on either NYSE or Nasdaq is 2 or higher on a closing basis on back-to-back sessions, there will be a significant rally within 3-5 sessions. The Nasdaq Trin on May 1st was 2.07; on May 2nd, 5.77; on May 3rd, 2.86 - got the rally on May 8th; on May 9th, 2.70; on May 10th, 4.24 - got the rally May 13th-14th.
Of course, the Rule of Three kicked in basis the Dow on May 8th. Again, regardless of which index or exchange triggers the signal, I will trade the OEX.
I agree with Vess that it is silly to talk about a "new" bull market based on the Double Deuce, but it sure as hell can make you a lot of money on a short-term basis! Which, after all, is what Arms or Trin or STI is - a short-term trading index! (The OEX May 535 call hit a low of 1.65 yesterday - and a high of 10.40 today!)
Use the Rule of Three and the Double Deuce - and you've got'em coming and going! And you can go diving wherever and whenever you want!!
BTW, thanks for the lovely quote from Dickens.
From: scamman Replying To : Ehand (post 46678) May 14 2002 3:59PM
Title: re Rule of Three
Hi Ehand - My Rule of Three stipulates that when the put-call ratio on any of the key indexes - DJX, SPX and NDX - is 3 or higher on a closing basis, there will be a sell-off within 3 sessions.
The rationale is very simple - such an imbalance indicates that the "Da Boyz" have positioned themselves to profit from an imminent decline. Going strictly from memory - the mother of all evidence is that on March 30, 2000, the NDX had a staggering put-call ratio of 13.14!!! That was a "RED ALERT" in my book, and I got out of all longs and went massively short.
I have discussed the rule many times in the past - if you are so inclined, you can review them by entering "scamman" in the "messages by member" field at the bottom and clicking thru.
From: scamman May 3 2002 11:44AM
Title: NDX p/c ratio
On Tuesday, April 30th, NDX traded 1,058 calls versus 6,649 puts on a closing basis, for a p/c ratio of 6.28.
My "Rule of Three" stipulates that when the p/c ratio on any of the three key indices - DJX, SPX, NDX - is 3 or higher on a closing basis, there will be a sell-off in 1-3 days.
The rationale is very simple - such an imbalance indicates that "Da Boyz" have positioned themselves to profit from an imminent decline.
My p&l indicates that this occurs just about every time.
1) All rallies are truly gifts from Allah*; and
2) Short every rally!
*Until we get multiple closes above 1175, basis SPX, and the chance of that happening anytime soon is absolute zero.
From: scamman Replying To : TheQueenFool (post 52628) Jul 22 2002 2:08PM
Title: SOURCE OF R3!
Queen - I know you "bait" me all the time - and I always take the bait - but just for "asking nice" I will give the keys to the gold mine to all members of this board once again! I referenced it many times before, but y'all know the 10% Rule! OK, so here it is:
1. GO TO CME.COM;
2. SELECT QUOTES;
3. SELECT END OF DAY DATA;
4. SELECT DAILY SETTLEMENT PRICES;
5. UNDER "INDEX PRODUCTS", SELECT S&P 500 INDEX (Step One);
6. SELECT "OPTIONS" (Step Two);
You will see that on Friday, 8,688 calls traded, versus 34,020 puts, for a p/c ratio of 3.915. No retail morons here - options on futures are all-pro.
I don't give a crap what a "mechanical" system based the p/c ratio might conclude, but I use it in conjunction with S/Rs, VBs & (Opening Ranges) ORs ("confluence") - and I make a nice chunka change - and so can you! Now, who the hell do you know on this board that gives the keys to the gold mine for free - and again and again?! Not "noble1"! LOL
************************************
S/R = Support/Resistance, VB = Volitility Bands, OR= Opening Range !!!
*****************************************
Mr. Cassandra and Hari Seldon can breathe free now - but I will honor my promise to the two of you re my "Overnight Killing (OK)" technique in time.
BTW, Queen - it's not that I "couldn't join" Da Boyz on the Street - I just prefer to trade buck naked within the confines of my bedroom! You don't want me to make Flabby Abby blush, do ya?! Enjoy.
Hi Noble - Sorry about the "hubris" yesterday, but note that while the retail-infested EQUITY-ONLY p/c ratio was .68 (527,689 calls), the S&P options on futures, used by the pro's, had a p/c ratio of 4.9.
There's no helping some people, is there?!
Title: equity-only p/c
As of 10:30, the EQUITY-ONLY p/c ratio is .898 - call it .9.
I want to see it CLOSE @ 1 or higher to confirm a cycle low.
The theory is very simple - when enough morons buy puts - "Da Boyz" will kill 'em by taking the market up!
The time to buy puts was thru yesterday, not today - when the IV's are marked up!
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
From: scamman Apr 25 2002 8:59AM
Title: Christmas in April!
Oooooh Yeaaaah.......Let's Do The Time Warp Again!!!
Holding 100 May 560 OEX puts since last Friday - as stated yesterday, will dump today. Trade rationale: 1) Intraday SPX p/c ratio; 2) Usual post-exp. selloff; 3) "Short every rally" mode.
Would be nice if Flabby Abby or Ralph Bullsh*tprone "Downgrade" their "targets" sometime today - that way you know it's an "official" Uncle Sam-approved cycle bottom.
BTW, the ONE put-call statistic y'all - and that includes you too, Queen - should look for today: the EQUITY-ONLY put-call ratio MUST be 1 or higher on a CLOSING basis.
OAKPRO -You consummate braggart - you sold a day too soon!!!!
As of 3:30 PM, DJX traded 5,760 calls vs. 18,216 puts. Surprise? Not!
BTW, the "Rule of Three" applies to * * * * CME SPX options on futures * * * * * as well!
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From: scamman Replying To : hari_seldon (post 52017) Jul 16 2002 11:39PM
Title: re genie!
Hari, Old Chap - You got my number! Wouldn't you know it, my "100% of the time" indicator hit R3 yesterday (3.26 to be exact), but no one posted it! Lord knows I've discussed said indicator in more than just a "stream of consciousness" way many a time. I'm just glad the "10% Club" - and the "prophets" as well - are keeping it to themselves.
BTW, yesterday the 3.0 Volatility Band basis the SPX was 876 - and voila! - the low of the day was 875.50. Only time this year that the "3-oh" has been hit. I owe Brother Haggo big time for that one! Bought some July 475's on the 5th @ 4 - they hit 40 yesterday. If the bungee keeps swinging like this, I'll have to come out of retirement just to get back into it! Did Flabby Abby & The Pimps set it up with their "Buy!" call or what?!
Of course, there really is no such thing as "R3". Reminds me of the priceless "Punch Goes Red" edition of 1973, which said, inter alia: "There is no such person as Public Enemy No.1 Edward Heath, who is currently in a Re-Education Camp on the Isle of Wight." LOL
Back in the bottle I go.....
From: scamman Jul 17 2002 1:00PM
Title: Gap & Crap!
Wow, S&P down 30 points in 3 hours! While Greenspan's yapping "reassurance" to boot!
The "Opening Range" technique which I detailed a few weeks ago sure came in handy.
As expiration weeks go, the "Coast-to-Coast" moves this month have been truly outstanding! A few more months like this - why, I might quit just like Bucky the Clown!
Thanks to "Da Boyz"!
From: scamman Replying To : mshaw05 (post 52212) Jul 17 2002 11:39PM
Title: re free money
Hi Mike, Read my July 2, 2002 post no. 51182 re "Opening Range". In Star Trek, Space Is The Final Frontier; In the Stock Market, Price Is The Ultimate Arbiter. A great Guru taught me to "Just Look At It" - at price, that is. When price hits the First Hour's High or Low, it will typically do one of two things - bounce or break. Since "Pop & Drop" or "Gap & Crap" and their obverse, "Bungee" or "Trap Door" opens are among the all-time favorite Wall Street scams, if you follow the First Hour's High and Low carefully, you don't need to know much else to make a killing.
Today is a perfect example - you would have to be brain dead not to realize that the 200 point gap up was totally bogus and nothing but a trap - sure enough the S&P dropped 30+ points in 3 hours! Since this is expiration week, the front month out-of-money options were pretty cheap during the "pop" and increased dramatically in value during the ensuing drop, as they turned in-the-money. I made more money in 3 hours than the per capita income of most countries of the world - including Bucky the Clown's Rio de Oro! Now, I don't recommend fooling with options which expire in 2 days until you know what you are doing, but that's the payoff.
SEE NEXT POST BELOW Starting At XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
July 5th is an example of another kind - the idiots ran it up 325 points on a half day! The only day in recent memory when the S&P violated the 2.0 Volatility Band on the upside. Needless to say, it also generated an R3, but the intraday P/C configuration was so lopsided that I bought the OEX July 475 puts @ 4 ($400 each). On the following Tuesday, I sold half @ 8 ($800 each), so that I had a "Free Trade" - that is, I recovered my principal and had nothing to lose. I let my profits run, eventually selling residual contracts @ 40 ($4,000 each), a "ten-bagger" in a matter of days.
I don't intend to make it sound too easy, but what the hell am I supposed to do when the clowns run it 325 points on a half day - and buy puts like hell at the same time? To paraphrase GM's good old Al Sloan, Find A Scam - And Follow It!
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OR Technique
From: scamman Replying To : paperprophets (post 51171) Jul 2 2002 1:11PM
Title: go w/the flow - the Opening Range
Hey PP - Go with the flow! And your "mo jo" will get rolling!
Yesterday, I referred to the "Opening Range" Technique.
1. "Opening Range" refers to the high and low of the First Hour.
2. Market opens @ 9:30.
3. First Hour ends @ 10:30.
4. Note the High & Low of the First Hour. You can get that from something called a "quote" service.
5. Watch for tests of the FHH (First Hour's High) and the First Hour's Low (FHL).
6. Today, the FHL basis the SPX was 956.37.
7. Note that FHL was violated to the downside on the third try around 11:30. The break was projected by the "bear" cross on the 50- and 200- period SMA's on the 15 min.
8. Once it broke, downside targets were the 1.25/1.5/2.0 Volatility Bands @ 954/951/946.
9. LOD (low of the day) is 946.41, which also created an MACD divergence - lower price low but higher oscillator high. If you went short @ 956 and covered @ 946, you got a nice 10 points in a matter of minutes.
10. As for index p/c ratios - the "straight" answer is that they are nowhere to be found - you have to do them for yourself.
11. No, I'm not coming over and doing them for you!
Replies to this Post:
51184 mojo jojo
from paperprophets on Jul 2 2002 4:03PM
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From: scamman Replying To : spcwby (post 52228) Jul 18 2002 2:54AM
Title: re refs
Hi Cowboy, Your seemingly innocuous question is a bit like the proverbial wife asking if the dress makes her butt look "too big" - there's no right answer! It is difficult to suggest "appropriate" material without knowing where you are in the curve. Taking you at your word that you are a beginner, I suggest William J. O'Neill's "How To Make Money in Stocks" and John J. Murphy's "The Visual Investor." For fun beach reading, try Charles Mackay's classic "Extraordinary Popular Delusions and the Madness of Crowds" - which should provide some "perspective" on our beloved Nasdaq bubble.
Two subscription sites which are quite good are tradingmarkets.com and realmoney.com. I think their basic versions are around 200 bucks per year, a fair value in my opinion. While I subscribe to premium versions of both sites, I am obviously not "endorsing" either - you should draw your own conclusions with free trials.
Thanks for the compliment, but the "database" is no accident - I do read quite a bit! Doubtless a hangover from my previous incarnation as a college teacher. Which reminds me - Alan Watts, the late British Buddhist, was once asked: "So, do you believe in re-incarnation?" Watts replied: "I didn't believe in re-incarnation in any of my previous lives - why should I believe in it now!"
From: scamman Replying To : hour_of_the_wolf (post 43487) Apr 5 2002 3:09PM
Title: re djx p/c
Hi Wolf - Boy, that last half hour was interesting! Even Linda went from a "sell day" before the open to "aggressive buy" for a scalp on the NDX futures. On top of that, a delayed CBOE report indicated that as of 2 PM, DJX had traded 12,102 calls versus 9,463 puts (.78)! So I check the strikes and I can't find the trades! Sure enough, As of 2:30 PM, DJX traded 2,356 calls vs. 9,797 puts (4.15) - so that 2 PM number is just a typo.
* * * * * * * * * * * Yes - a p/c ratio of 3 or higher on the = = = = DJX/SPX/NDX = = = = will result in a sell-off in 0-3 days. * * * * * * * * * * *
Ideally, you want to use closing values, but the market is now largely an intraday affair, with hedge funds and mutual funds which act like hedge funds completely in control. As Pisani was just pointing out on CNBC, this week program trading accounted for over 30% of NYSE volume. Intra-day ranges are becoming more interesting than inter-day ranges. For example, I bought a bunch of OEX April 560 puts @ 5 and sold them @ 7, and they promptly dropped back to 5! Likewise, the Dow high today is 335 while the low is 217 - nice 100 point plus range. You have to be wary about position trades nowadays - a strong close leads to a gap down, and a weak close leads to a gap up! They just want to trap you during the "amateur" hour!
(BTW, you can check the program trading data @ the NYSE site.)
From: scamman Mar 25 2002 4:02PM
Title: djx p/c ratio **********************************************************************
Nice to see the DJX p/c ratio "Rule of Three" maintain its "God" status as an indicator!
What is even more comical is that equity-only p/c ratio @ 10 AM was only .42! *************************
From: scamman Replying To : hour_of_the_wolf (post 42923) Mar 25 2002 4:32PM
Title: re djx p/c, tick, Gap & Crap
Hi Wolf - Thanks, glad to be of any help! As I keep saying, the best part is - it's free! I actually feel sorry for the poor devils who bought all those calls in the AM.
A perfect, textbook "Gap and Crap" day - arguably the all-time favorite trick of the scumbuckets. Don't forget the tick, either - hit a high of 401 on the retest (of the opening range high), never to see that level again the rest of the day.
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From: scamman Replying To : Wareal (post 52627) Jul 22 2002 1:38PM
Title: ATH Classic Day
Hi Real, Quite right! Of course,
1)on Friday the CBOE EQUITY-ONLY p/c ratio was 1.086, for only the 3rd time this year. You got the "buy" signal, but you know that
2) 400 pts is going to cause margin selling by noon, so
3)use the OR technique for the ride down and the - O/R opening range
4)high-minus tick for the reversal. All spikes are inherently disconfirmatory!
Don't you just love "Da Boyz"?!
BTW, someone asked: how do you know if you are one of "Da Boyz"? If you can drive up to the Fed Window and yell "Fill 'er Up" - and "Just Charge It!" - you are definitely one of the boys.
7/23/02*******************************************************************************
call intraday
EST. VOL VOL OPEN INT.
TOTAL 8910 14936 84206
put intraday
EST. VOL VOL OPEN INT.
TOTAL 30488 36022 128694
call eod
EST.VOL VOL OPEN INT.
TOTAL 9620 14936 84206
put eod
EST.VOL VOL OPEN INT.
TOTAL 31588 36022 128694
*************************************************************************************
From: scamman Replying To : lanceboo (post 1748) Aug 21 2002 3:25PM
Title: Timely BS?
Roy from the pits notes @ 3:07 that "If we get any kind of an upswing before the close, this would be an opportunity to buy put options or put option spreads. I suggest going out to September and looking for strikes in the 870-900 area for a 2-5 day down move."
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From: scamman Replying To : risky1 (post 1753) Aug 21 2002 3:54PM
Title: re low-hanging fruit!
Risky - You going after that "low-hanging fruit" again?! LOL
Congrats.
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From: risky1 Replying To : scamman (post 1755) Aug 21 2002 4:14PM
Title: Scamman
Yes, I am going for that "Low hangin' fruit" THANKS to YOU,Scamman.
I am not scared - my name is Risky.
I re-bought the OEX Sep. 470 Put, this time at $11.20.
Thanks again, Scamman
risky
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From: Wareal Replying To : scamman (post 1755) Aug 21 2002 4:14PM
Title: Branches falling
Just after 2PM two blocks of 1000 each of the 480 puts went off at $15.50. Zat you scam? Twasn't me, LOL!
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From: scamman Replying To : roll_tide (post 1743) Aug 21 2002 2:21PM
Title: Allah.....indeed!
"Da Boyz" have gone from just selling rallies to buying dips as well - Allah be praised indeed!
Now, if He can only get the padres to keep their pants on!
======================
Pick Status Account Type Action Current Quantity Traded Quantity Remaining Quantity Symbol Description Price Time Limit Date Order Number
Approval Order(s)
Pending Margin Buy Put 20.00 - - OXB SEP 450 /PUT S&P 100 INDX SEP 450 CBOE 6.00 DAY 08/22/02 XZC 0006
===========================
950 480
870-900 435-450
OXBUJ - OEX 450 PUT 6.70 - 6.90 Vol of 6208 RYTPX -2X SnP
CLTMG Citicorp Jan 35 Put
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