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Dan, you WILL get better and you will soon get some of those original ideas, that we all admire so much.
Dan, welcome back! We missed you. I wish I could accurately describe to you what happened… In 2001, J. Bollinger was talking a lot about “tradable bear market rallies”. When asked how he defined such a rally, he answered: “It’s one in which I have the time to get in long, make money and get out”. This one doesn’t look like one of those.
BE, I don't know what other people think, but the VIX (now at 27.41) might drop much lower. Thus, calls could lose premium. Therefore I would rather buy QLD. Any opinion?
Gleno, on my 30 min, I have rez=42.44. Above it , a zone of congestion. I think that if we get there, we my stay in it for a while.
Cony, congratulations! It's one of the best news of the day.
Gleno: and imagine, he is such an important super delegate! The dems could not have found anyone better to elect their candidate for the presidency.
Gleno: Yep, since you asked, that's how I play it: I have already QQQ QS, bought at avg. = 2.78, now last = 4.2. Just sold QQQ ON (Mar 40 puts) for 44c each. If those get to be at the money on 03/20 (as we both hope), I make 44 c + the additional profit from the May 45 puts which I own. If we have a bear market rally, I sell them for a profit, and then …many other possibilities. Like. NM would say: “sell and buy dem suckers“.
Gleno: It is not only about protection. In my example, the time decay is much higher for Mar puts than for May puts. As a fact, close to expiration the Mar premium should be close to 0. At that point if the options you sold are comfortably out the money, you let them expire and the money is yours. However if they are at the money or in the money, you must BUY them back because otherwise YOU might get “executed”, i.e. Bernie from CBOE will sell to you 1000 QQQQ shares which you will have to accept, because he bought from you the puts and that entitles him to sell you those shares at the strike price.
Gleno: you are right. Are we going to break through the famous support 41.4 +/-5c today? Will THEY let it happen?
Be: Thank you. You are too kind. If interested in options, L. G. McMillan’s ” Options, as a strategic investment” is an excellent start. Some wise guys might think it’s outdated, but the basic principles are there, clear and simple. I personally like to buy calendar spreads 10 days before expiration, like right now. When you do that, TIME is on your side. Right now I have Q put spreads which I am keeping. For example: buy May 45 puts and sell Mar 40, 41 or 42 puts, or a mixture of them - which is a Scottish spread. You can start a paper trade, for fun, and follow every day the prices. Good luck.
NM: here we go! Someone says that BS might have said that “…there is no truth in the liquidity concerns”. Not a big one but, good enough for some suckers…
BE: Things have change lately. SPY made a textbook double bottom on 5 min. Qs could go up. I this case, my targets are 41.84 and (on some rumor) 42.03. I am not scared of rumors. Love them.
Gleno: I am out at 56.92 thanks to the Bear-Stearns effect. You are right about looking at the Qs. Recently, before entering, I also look at the QID or QLD, since a 2x move overshoots significantly at the ends of the spectrum. I establish my targets on such a premise. It also appears that at those levels, QID moves approx. 1-2 sec ahead of the Qs. We know why…
Gleno: First QID target = 56.83
Gleno: Yep! Getting a strong BUY signal on for the QID. U2?
Hi Foot, IF this is it, it is …..SCARRRRRY! … lower than July 06!
Hi Foot, you posted an amazing collection of interesting charts and commentaries this weekend. I find this very stimulating and, for those who read them, I feel it is a pleasant duty to share our views. Thus, I am posting a continuation of the “unorthodox” Q weekly time cycles, combined with a quite obvious wave count. As we all know, wave people and cycle people don’t like each other. However, sometimes, the timing and the targets that they predict could be quite close. In trying to combine them, one can only hope to be objective enough with each method, independently.
The long 100 wks cycle, has troughs in the wks. of 11/02, 08/04 and 07/06, dates still fresh in our memory. The next trough should be sometimes in June (chart1).
In chart 2, within this last cycle, the 1, 2, 3, and 4 waves already occurred. [I personally missed a good chunk of W4, as obvious from the absence of a green arrow at 41.6. I did not think it could hold 41.46]. Last week, the Qs were spectacular: they touched both support at $41.4 (a projection of fractal divergence) and resistance at $43.6 (the bottom of the very congested zone 42.62 - 43 83). However, both short and long term time cycles are losing their right translation, and their summation points DOWN. Moreover, wave 5 is also headed down, after falling through that “continuation triangle” that we all know. How far will it go? There are 3 close targets (included in the rectangle labeled 5):
1). 40.26 obtained from the projection of fractal kiss, in the middle of Oct 06.
2). 39.98 obtained by extending W5 by (W1 x 0.618)
3). 39.31 obtained by extending W5 by a full W1. This last target would represent a ½ retracement of the whole rise of the Qs during the 3 large time cycles discussed, since 11/02.
What intrigues me the most is that these targets might be reached much sooner than June. If summing such cycles makes any sense, then the Qs (the champion of indices) seem to say ”After me, the deluge!“.
GLENO, Blasher & d-k : I would say that 41.61 is quite close to 41.46 (which is projected from a previous divergence of fractals from wk of 10/20/06). Right now, it might hold, like it did on wk of 1/25/08. But those who like summing cycles would say that soon it will drop through it. Next solid S2 = 40.24.
Blasher, I got out of puts and QID when it dropped slightly under 41.9, close enough to my target. Might get back in later. In the meantime, I was informed of the following Dialogue in Congress:
“Mr. Mozilo, when you were with the Red Sox, how often did you inject yourself with growth hormone?”
“I was never with that franchise and I was never injected with growth hormone. My nose is big because I suffer of the Pinocchio syndrome.”
“I see…that was the other one. Good that you clarified these facts for the record.”
Thank you Foot. I’ll do it.
Blasher: Have a target? Mine is 41.87.
Dan and Foot: you are great!! The market coming to you…is the best. I only wish I had a pixy dust indicator…
Sorry Blasher. It’s a typo… it’s my wireless keyboard. I meant “... of Bendance”. You know… Peter Pan.
No, I don't. I only see the results.
Blasher, yes but aBUMdance will come only if…we watch the pirates of the PPT.
Blasher, it’s my turn: WoW, WoW, WoW!
Blasher, 30% sounds terrific. No complains. Think of all those poor children in Cambodia who would love to eat Brussels sprout…
Yes Blasher, you did. Should have read GLENO’s S2=42.35 and my S2=42.32. So far the low was 42.34. I am also out now. Congratulations, Gleno! Now we can joke together. Did you try to apply the Fresnel wave interference equations to the wavy gravy analysis?
Hi FOOT! Apparently the traders' trade for the day is short SPX / long Qs. Makes sense?!
Steve: There is this old rule of 4: if it tried 4 times unsuccessfully, it will go in the opposite direction. On the way up, my first stop is 43.38.
Yes GLENO! I have first Qs stop = 42.89 to 42.91. Second, again = 42.75, like yesterday. Third = 42.32, but probably not today.
Hi Cony: Yes, we help and like each other here, as you probably noticed. But we don’t like gold. Last night I was talking to an expert friend about GDX. She pointed out that there is a rising wedge, in which you can count (1) to (5). Inside, it there is a smaller one, in which we have 1 to 5. They were just formed , and this is very bearish. So, I asked: “ I have few gold Kruegerlands. Should I sell them now?“ Her answer: “Are you crazy?“ So, you see… You might be in business, but you never know what gold does overnight
Blasher & GLENO: Thank you guys! It looks great. It correlates perfectly with a fractal crossover and, in this case, with a sharp downturn of RSI(5,25,75). It is actually slightly earlier. Together they delivered an unambiguous entry point.
Blasher: great calls! That MACD, on which time interval chart was it?
Gleno: No, I am not. As a quite ignorant geek, I am grateful to you experienced guys for being so nice to me. I am learning a lot from you. Thanks for the good charts.
Gleno: thanks for a thoughtful advise. I wonder if one could make a numeric correction for either situation. Later, I might work on it. If I get an idea, I’ll let you know.
Gleno: on my 5 min, Qs resistance: 1 = 43.34 (congested to 43,48) and 2 = 43.68. Makes sense?
Blasher: nice stuff; yes it’s the good old matrix…but the what makes it really good is the colorful fluff you dress it in: just like our friend’s trading, in your commentary.
Dan, good time pivot prediction. Rumor “du jour” was the famous , the ubiquitous, the great AMBAC… Hole’ ! Good job guys!
Hi Foot! My SPX support at 1308.2 was not too far from reality. Unfortunately, it looks like we are now stuck in that region. As you have noticed, the Qs are in the same situation.