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there were 2 weeks of ranging inside 10$ (like an ATR).
SPY broke under this 10$ range ... by 10$
And now already jumped up to form first swing inside this range2 of, yes, of 10$
Are we looking at a 10$ range2 under 10$ range1 ?
Who knows, but it looks this way now.
So bottom of range1 (around SPY 330-333) is shorting since has been violated (and strongly).
The top of range1 is also a short (SPY 340-342)
meanwhile bottom of the new range2 is a buy (SPY 322-323)
(also a level where to cover any shorts left standing)
Now the market is trying to figure what to do next, and so far these are some of the parameters I see
I think the car dealership example is not appropriate.
In that example yes, it works like that, people will not rush to buy something once they know that the sale is going to last 3 years.
On the interest rate is sssooooo much different. You see, the benefit of buying the car at 0% is there and the value of that benefit actually increases with time, like you said, better cars, maybe cheaper, and the benefit is locked and will go into the future!
On the interest rates 3 year ZIRP deal, the benefit is maxim NOW, and will fade out as you go. You see, borrowing now and holding at 0% for 3 years is maximum benefit. Borrowing at the end will have the risk of higher rates, so much less benefit. On top of that, it makes sense to borrow now at today dollar value, as dollar will lose value, and pay in the end with devalued dollars.
So the benefit scale of borrowing at 0% window for 3 years is opposite versus buying an item like a car or even a house.
Also economically is better, as businesses will feel much better knowing that they have a 3 year horizon to use the money at such low cost if any.
The problem with this that I have is that WE do NOT get anything, like we are persona non grata , and only few selected large companies actually get the lion share and more of this free money bonanza, all on other peoples' backs (us).
Notice on your chart the stochastic.
ok?
When price broke out the stochastic is overbought, so at the end of its pushing power. Odds then are for a failure.
For more odds in your favor stochastic has to not be overbought, and if near oversold even better.
As I explained numerous times moving averages which MACD and BB are as well, are completely different than stochastic, but that can be used as an advantage as they complement each other.
As always nothing is textbook but this is the general idea.
And yes, trading strategy can and should be created on this principle.
You are wise to wait to confirm in hourly, but this will add even more to your favor.
On that note it sounds to me even more so doable.
Powell will be even at a greatly diminished to even outright annihilated risk.
You make me think even more so of this possibility.
The problem with this for our SPY case is that we can't see it coming so to speak. So I can't back up the truck on longer term puts on that account.
This is a sudden move if will be done, NOT heralded in any way. Much like a coup.
Hey, 2020 was ferocious so far in so many ways, so why not adding that in the mix of 2020 "experience".
It will be 20-20 when we'll look back ;)
for the market sake I wonder who got who by the balls..
Common thinking is that T got Powell to dance and play along without a beep.
But we are really REALLY nearing election.
So I'm thinking that T has ever less power over Powell, and in fact it is now Powell with the power.
If Powell shrinks the balance sheet and QE and ..... even rise rates ... 0.5% for good measure mind you... then the market will respond violently, in panic.
So then T will have no "market is up" fairy tale for the electorate to sell himself, so potentially he starts losing more and more.
So I'm thinking that Powell has T by the balls, and may even start closing the vice. Payback time.
But who really knows what these people are playing.
Interesting thought
I can imagine the shock one morning Powell announcing out of blue the back-stabbing 0.5% hike.
He can definitely find all sorts of economic excuses
Will be little time if any time at all to fire Powell, it will be too obvious BS
It is also the attraction to get into history pages as the guy that threw a payback curve-ball to the pres just prior to re-election time..
That is worth quite a lot by itself, not to mention there are plenty of people waiting in the wings to jump in and back up any such action..
The next question would be where SPY will go in such a scenario..
I know the premiums on options will go crazy expensive right through the roof..
You suspected.
Not knew - That's exaggeration.
If you did know then you would've borrowed money from wherever you could and dump 100,000$$$ on them options, not just whatever amount you had.
Quote: "i knew 328 was coming before 318"
Bull and bear trap coming up
I can't tell which is gonna be first
premiums are so expensive
Bottom is always expensive to buy even when is a fake bottom
Tops always are cheap to buy puts
Cheapest that can be actually
wow play-dough market
I believe we have a Low of the day even if the lil boys take it a hair lower.
Question is if it will be the Low of the week.
I think there is more room
But indicators show OS, and I see the generals holding pretty sturdy, only the lil soldiers they sell hard
I long time think the parameters given to us are too easily manipulated (and us played as a consequence) .
I too think 4 , like 4 hours, or 4 of 15min which is 1 hour, or 4 days, or 4 weeks, are important.
But canned 4 ?????
pfffft
To me it has near zero value. (NOT entirely zero)
I strongly believe that whoever is serious about charting should make his own chart , at least in regard to "4" thing, and this requires TIME and needs to be allocated.
I am serious about charting but I have a pitiful amount of time. And whatever I do have , the family and family matters is sucking the daylights out of it leaving it dry as Nevada.
Whatever time I do have I allocate to research and models, not building or maintaining charts. But if I had the time, then yes, i will build my own custom charts. I did create few charts few years back. They opened my eyes nicely.
Here's the thing where canned 4 hours suck/fail: let's take the 4 hours - not all 4 hours segments are equal. For example I need to know 4 hours above/bellow a pivot. But I don't want arbitrary cutoff. I want only those hours above/bellow to form my 4 hour chart, with zero connection to before-after the pivot.
It's not to say this system works 100%, it is NOT, but it is far more accurate than the canned chart.
Such chart will have to be maintained manually.
For lack of solution, I slimmed down my requirements to about 2-3 pivots more essential to me and just watch them and count the candles in my mind. These occurrences are not often so it is doable this way.
But why stop there...
I made a chart long time ago where candles had near zero connection to time or time segments. In effect I "candled" the swings and cycles. The cycles needed time tho so that didn't go too well, but the swings was better. But charting always pull you to tributaries so I abandoned those projects in favor of new other ideas (a very VERY STUPID thing to do and I want to stop doing it, but charting addiction so far is winning...)
I just tried to put a bit of insight and hopefully someone with dedication AND more time can do something and then be kind enough and share results now and then.
Happy trades
p.s. in Forex I once had a platform (my broker took it away) where I could engulf at will any number of candles with a opacity-controlled square, essentially making a custom chart - it was REALLY good.
I used that platform also to "cut out" low trading periods in futures as well, and that was also real good. YES, I could've command the computing to ignore a given segment so my moving averages and indicators would not be thrown off by some BS periods - this was one of the things I liked the most. This was quite many years back, and it shows just how advanced charting the professionals can have (and ... it was taken away from me!)
I too was looking to research what the options inside the spread were doing. Likewise I wanted to understand if there is improvement, but more importantly if it works and what can I expect.
By no means I finished anything. I barely scratched the surface and only on a corner.
Here's what I did to collect data:
I opened a chart in the trading platform that can show the option.
or rather two charts as they are two options.
Then I looked at the SPY chart (a separate 3rd chart).
I measured the options' % movement against SPY movements.
I tried to use as small as a timeframe as I could. But some options, or sometimes, do not trade much, so I had to use a bigger timeframe to be able to see trades and collect data (say if 1min won't work then scale up to 5min or 15 min)
This way with chart you have it visual and can see a clearer picture of the situation.
What is not so clear is the percentage movements one versus another , so there you have to work a bit with diligence.
It's perfectly doable
..... unless I missed the point
big charts show 320 deck
which by normal norms is too rich and expensive to begin with
overbought in testing the support
Time and the fence are my friends
Lol
Today is EX-Dividend day for SPY ..
About -$1.3
The intraday StockCharts as always is jumpy and unreliable.
Some pivots may be thrown out of place from this EXD
It takes about 5 days to normalize the charts so by end of next week.
Things in charts normalize gradually, not boom all in last day.
It's not too bearish as the price closed above d50 on every test.
Yesterday's test and closed above is the reason for today's rebound from outside market lows.
Each period of chart must be judged first from own level, only then from other levels.
So for example if a cycle low is lower than d50, we sorta dismiss that in favor of d50 which is right in front and center, and only then be mindful of the cycle low wherever lower it is - or vice-versa if is the case.
Not saying there is a lower cycle, just explaining myself.
So d50, speaking of it, has the power to overpower every single bearish (smaller) elements above it. In other words it turns them to neutral from negative, much like stoplights.
There are exceptions of course, but then we go into the realm of algos (which is much the same imo).
Question: Why do you buy the BTO long position as ITM (like $3) and not ATM or even slightly OTM as being cheaper that way thus potentially substantially improving risk-reward scheme?
For the same reason, why not buying less time than 1 month, why not 18 days or 12 days? (the sell STO part would still have time to work to balance the decay loss at 5 days time)
I'm trying to learn about what I'm doing Lol
Quote: "I will look to buy in the money, a month out,"
Supporting private Businesses (not just cherry pick few buddies) is NOT welfare.
We have welfare now with all the QE for noting ... just for "selected few".
Strong manufacturing is what made America great when it was great. People (foreigners) were looking at an item and say with awe and satisfaction "look (what I have), it's made in America, good stuff"
AND THEY WERE READY TO PAY MORE FOR IT !!!!!
It's nothing wrong with some outsourcing, but it is with 99% outsourcing.
I always say to people around, "why not outsourcing the CEOs and the politicians ???!!!" --- if outsourcing is so good for the country , then let's do more , let's go all the way, not just ma and pa...
you can say that again!
WOW, 5min 0.5 and 1$ moves like nothing , wow
It also means no participants as if they were then the price would be more stable
by extension it means no serious buying since the main course was selling and now it rallies intraday so a lack of participation means a lack of participation on the bid
all connected
no FOMO basically
so now thinking to put a trailing stop to longs is not that stupido today
This is a technical board.
I'm shocked you make a comment like that on here since technically d50 is support and SPY reacted correctly bouncing on support.
This morning was a calls trade and by extension to cover any and all (lucky) shorts
That's bs, economic warfare would be to rebuild (and return) the manufacturing and support businesses, not just printing fiat money to throw in market casino and support their buddies at the casinos with bailouts and QE..
Wait for when the Fed allied with the enemies bring this SPY casino down or the dollar value down. It can't be both up with all the inflation currently above 10% and that officially and not even true as they look to the phony CPI.
So by CPI alone SPY should be 360 this year (like stable being 360) and about 400 next year , into an ever steeper ascend and this soon to be followed by similar graphical dollar value collapse (inverse correlation) .
People speak without knowing just because they can
Same on media
d50 is good support to buy, low risk, very good for that vertical spread.
Anywhere near the open is ok buy
However, I have a bad feel about this one because the above average selling from 360 and continuous weakness.
d50 was tagged outside hours so the lil boys steal from back door..
Now they let us in ???!!
Hmmm
It looks like bad cookie bait, they are not good.
So my options are few but looking at two.
1. Buy the open and ride the situation with a vertical spread, or
2. wait it out , and potentially MISS this very bottom (assuming is one), and get in with some buying momo whenever it comes.
Because my fears I lean on 2. but I could buy say 1-2 options for a relatively low risk gamble, then go with nr 2. for main hold.
Pacing back and forth on the fence ...
I never get tired of reading that from you (the last paragraph)
I however have a strong spider sense that whispers me that it's room to improve said paragraph, namely the selling ST.
I don't know yet how or what but I can't shush that voice.
One thing I'm thinking of is selling the "no way" resistance.
Like for example selling 360 KNOWING that it won't get there in a week. This is just a pitiful example to present my though process.
Another would be to sell cycle high. This is more sneaky devilish thing (in your favor) as with cycle you have the added benefit of time extrapolation, thus better picture of what you are doing.
Problem with cycles is that they are not a permanent thing, but they are not rare, so it's a valid place to look.
I'm doing it and learning as we go.
I was thinking the other day of buying and selling right at the open both OTM -1%.
I have no idea how stupid trade this is, but from my calculations a move of SPY of 1% in either direction let you pocket 0.30%...
In dollar terms you gain about 1$ on one option that gains after you deduct the other.
I looked at the chart and I think it's a good trade as the lil boys make dam sure 1% moves from open are not too many. But there are plenty. My next thing is to find a way to assess the upcoming days that are going to be 1% from open, and I have not slightest idea yet.
Fed is a NON event.
They pretty much took themselves out of the picture 100% as surprise factor goes since they committed themselves for YEARS to come of QE and ZIRP.
It's only the media and the manipulators that will try (in futility) to use Fed meetings as a market scarecrow.
Since Fed is shackled by themselves in the QE+ZIRP corner, it's the best of times to use charts and really REALLY shut out all the media FOR YEARS TO COME (or until new Fed under new administration).
I really don't care. I know only what the chart is telling me which is uptrend and I wait for a 100% buy to ride the QE pony show.
I sold my calls at resistance and now wait to reload and wait for resistance break or support bellow.
In other words ... let them lil boys do whatever they want
Maybe I'm too simple..
Yes you can get to buy at the bottom.
First make dam sure you know the direction of trend. That's always number 1.
Then be mindful of support and resistance of daily. This is very much related to point 1.
Let's assume trend is up like now.
BTW trend can be still up for a while even if SPY tops, so it's the trend that matters and not if it topped.
Then use your (preferred) MACD, the way you want.
To get at the bottom use the Stochastic at oversold.
This way Stochastic is very much like a timer.
DONE
You just have to play with Stochastic settings to get something you like.
That's the way to use it properly.
Also note that .....
In uptrend it is frustrating to use the same setup to fish tops !!!
Quote: "macd works better for options even though i do not get buy at the bottom."
thanks
I just learned that VIX must be looked from LT and ST as two completely different VIXes
It was worth the time
It's wrong/unfair to compare MACD with Stochastic
They are both charting indicators, but that's where the similarity stops.
They do complement each other.
MACD is more of a trend indicator, and maybe some MOMO, while Stochastic is a pure oscillator, so two different indicators in what they can do for you.
In a choppy market Stochastic is net superior
While in a trending market MACD is superior.
You can think of this as BS, but that's what I know.
Quote: "no chop unlike stochastic."
I think there could be a tentative yearly plan.
But only tentative as no one knows the real time events and workload.
Then it can be quarterly plan.
I know it's a monthly plan looking at charts (OE you mentioned), and daily plan, not seeing anything in weekly.
But my point was that charting is about price, support, and resistance.
It is in that context that I made the comments. Not if they have a plan, or what SPY is doing at 342.
It was a call to draw attention to a charting turn.
I think my point has been missed.
It doesn't matter, I'm a chartocoholic anyway. I am going to dig into this by myself, one bite at a time and get somewhere, I know I will do as it happened before with other seemingly nonsense charting stuff.
I need the second aha
God willing
Thanks, very kind of you.
My main hand hurts badly from saturaday on, couldn't rip a toilet sheet on sunday, no typing, it was bad.
Some joint in hand inflamed or something. Very bad.
Now a bit better. Splinter glove, Ibuprofen, Glucosamine, turmeric ..... and a (un)healthy doze of daily smoke from the forest fires. It seems better, a bit.
I'll take every better bit.
Today I'll try to go to work. I'll see how it goes.
Life is full of roadblocks and such.
I couldn't advance my market typing etc.
Enough with my whining.
IMO it's a 2-side battle. Options, and charting. If charting is very good, even stupid option strategy will work.
If charting is mediocre, and I think most of us fit here, then good option strategy is needed. Much like you kindly present.
I was looking at hunt's remark of "gap over resistance".
Then I "stepped back for a moment" and said, wait a minute, we are looking at this through classic eyes. The market evolved. A new thing entered and nobody really addressed it. NOBODY. Yes, we did mention it here and there, but nobody made a difference or a discriminatory difference.
So I think that now we deal with two types of resistances. One is classic, and another is the fake one, which in essence is not a resistance but a limit-resistance. A limit-resistance is a resistance artificially created by puters. For example at hand, yesterday the computers only wanted to go to 340.50. That was not a resistance as classic resistance (buyers run out), but a limit imposed for buying. It looks the same, but is not. The distinction is important. Me/We can not know what's what until after the fact (so far). So today gap over that resistance shows us that was a LIMIT resistance and not a buyer resistance, as confirmed by today "new-approved" limit.
I'm just starting to look at it this way, so nothing fancy.
My hand started to hurt from typing, ugh.
All the best and thanks again
Happy trading y'all
after all the know it all explanations, at ~9:20 in the vid the guy pretty much says ... "I don't know who or why they "traders" buy the VIX (for it to go up)"
Essentially admitting that buying force (aka Fed, aka manipulation) is what takes VIX up together with SPY
All that formula mambo jumbo to explain irrational VIX is BS
it's hilarious
thanks
in the light of last few days action and prior week action, today is quite critical day how it closes
if it closes badly down then really red day and week ahead, maybe even collapse
if it closes more or less neutral, then it means the goons will take their sweet time with this
if it closes strongly up, then Monday should be reaching for next resistance
The close, keep an eye on it for forward guidance
and to trade you use the violation or a timing indicator
so 335 11:30 now seems the timing to cover and SPY should try to go up now
and me go to work
:)
yesterday 337.5-338 area were SPY collapsed through that buying effort (retail?) , it should be resistance as those red traders want out now and will be selling.
So you have them reds, plus you have the selling of today , the today greens - buyers of lows of today and yesterday (like my trade as I mentioned), and shorts traders today shorting (that) resistance (rightfully so technically for daytrade purpose)
If that resistance is taken out, then who knows, but I guess even bigger resistance is at 342 as seen already from the 2 knockdowns
Can you guess the next "hurdle" ?
It's a logical consequence
But yes, if someone was short it doesn't look smart to risk the chips now
Oh, forgot, the BB must bend, otherwise is nothin
well, it didn't bend YET, so first hurdle not entirely cleared
When something like this happens I call it 50% signal as it's not full but 1 of 2
so... Monday rise of 3$ (or1%) is nothing (garbage) too
Because it's a 3x decay of 1$
So unless you expect for Monday a move in your favor in excess of 3$ you better don't carry options over the weekend, let them fools keep them
This is a valid advice even for swing managing.
Added benefit is that if you exited, on Monday you can rotate on different strike and time, increasing efficiency.
But if swing position is large and you are worried about fees cost, then what can you do..
the 15min mid BB is do-or-die speed bump
the first one
It can NOT be a reversal without this.
Just 3 Exceptions:
1. Fed/economic announcement shock
2. Overnight gap over this bump
3. High volatility period
Here and now it shows WEAKNESS of the upside force as it can not penetrate it upwards, SPY being kept UNDER it
Without reason?
336?
And without a plan?
Just shorting a number is too much gambling.
Best chances is with a reason for a number, say for example 342 got sold hard twice, so it makes sense to initiate a short there.
Then strategy is needed , like taking position 1.1 there and add position 1.2 etc at various resistances, and collect at support or cover if resistance is violated.
And that would be a trading plan probably
Better chances that way
a measly 1$ move in SPY at current level is NOTHING for options' holders.
The decay alone is eating that.
Have that in mind if you plan to hold.
This is the "speed" I mention sometimes.
In other words, if you CORRECTLY enter a trade for a swing and hold it let's say for 10 days , but SPY is moving at a speed of 1$ a day, you get NOTHING, as the daily decay takes your profit every single day.
So on the low speed moves it's only daytrades or nothing.
if you try to hedge ... well... the hedge is not free either, while you bear 100% of the risk.
Usually the grinding leads to lowest of premiums, so it's wise to let the charlatans grind it higher, then when you see ANY weakness that matters, buy long term puts as it will potentially benefit from a double source, the eventual drop, and the increase in volatility induced premium.
Futures sold-off about 50% of overnight gains...
Regardless what will happen next, this is a further statement of weakness, of low if any commitment.
But like I said already, and even got deleted for saying it (WOW!!!), 9/11 is a political green day for the US markets.
The 9/11 green day is a historical event, meaning it happened like 9 out of 10 times.
The 9/11 green is enough, meaning it doesn't have to be +2% day for SPY, it can be measly gain as well, but green nevertheless, it's the green that matters, that's the political "statement".
I bought some calls yesterday at the close based on this alone.
But also SPY being near 50 day average.
That's another discussion tho..
That keeping you frrom (over)trading it's either a blessing or a curse, it's a case by case. If you are a good/blessed trader then it's a drag, a major one, if you are a mediocre trader, then that's a great thing as it forces you to cherry pick the better trades with more potential and higher degree of certainty. I learned this on myself.
To ditch or dismiss a daytrade is not right. Sometimes that's where the opportunity is. I believe that the answer is both. Choose longer term trades, while trying SOME of the daytrades, particularly trades that hedge the already held position. I am myself learning this as we speak, not doing too well as I am just learning it, but doing it with money so I can actually learn ... and remember..
My biggest problem with short trades and seems yours too, is that I can not babysit my trades. I see good trades for intraday, can't take, then watch them here and there during day being good trades (but me just out and watching), and sometimes I take them hoping I can babysit and then I end up I can not sell for profit because work, and then when I can sell it's a pitiful profit or a loss, sometimes even a big loss or even total loss which is pity as I envisioned profit, it was there, but I couldn't physically attend..
Preliminarily I can say that MDY is victim of volume (leading to ST downgraded technical value), and besides that I couldn't see YET a correlation or something to hang on for guidance.
FNGU on the other hand is valuable and so RSP. But I have yet to tie it more to the action of SPY.
I think that FNGU and RSP together should be evaluated , without SPY in the picture, then if they get conclusive, go an trade SPY. This is a tentative thought so far.
IWM is a so-so, and so it's the DOW. Not that they are bad, but they can't help much with SPY.
SPY and the "generals" not only are important, but they are political assets. As political they tend to have their own "babysitters" like Trump (or any president) and by extension the Fed and the Congress. As a consequence, they , and SPY, can be traded with that in mind. In other words, or laymen words, a failure of SPY/generals reflects a failure of the president and even the USA. So it makes sense to be supported even if it means outright and blatant cheating or sacrifice the masses.
This adds bias to the trading this on the long side for the most part except corrections and crashes (resets and wealth transfers actually).
One more thing worthy of mentioning on these horses, it is a good for testing and using systems and models. One of my mantras is that while every stock has characteristics, I should strive to weed out systems , models, indicators and tools , etc, that do not work in most if not all stocks. So rotating a chart through these symbols which should pan similar results, it acts as a test for weak indicators or settings, and that is always valuable for me for the reason mentioned.
Thanks
puts? I thought you said you are bullish :|