SmurfVA's Random Picks

[Ned Serious]

Careful : Just one man's thoughts to be careful at the moment. Perhaps wait a day or few to see how the market is doing before entering new trades. Yesterday the S&P hit another record high, only to quickly reverse course and drop down fast.

I follow the major indexes of course, but I always have one screen open to show the DAX - The German index. Why? Because Germany was leading the way in Europe and the country that Europe looked to in the recent financial recession.

It's uncanny to me, how the DAX moves in step with our markets. The DAX closes each day at 11:30 EST. Before I enter/exit a trade, I check the overall markets and the DAX for confirmation of trends.

DAX Streaming chart: http://www.investing.com/indices/germany-30-chart

Then a month or two ago, I found this article which mentioned the USA and Germany correlation and saved it. For anyone who is interested:

http://www.cnbc.com/id/101495413

Here's the 60 Min Chart of the Dax. Look at the large volume spike in March and how the DAX went up after that (along with our markets). Look at the large volume spike a few days ago, and how the DAX has started reversing since then, going down. The DAX is near a support level at the moment.



I bought some weekly CALL options of the SDS (2x Short the S&P) on Monday and a few more yesterday when the S&P hit it's all time high and my 15 Min chart showed resistance.

Nobody knows what the future holds, but for those that trade on charts, I find that the DAX has reversed, and yesterday the 3 Major US markets also reversed rather quickly.

Also, 21 of the last 25 years, the S&P finished down the week following June expirations (last Friday).

NASDAQ reversal yesterday:



Just a thought to be careful, to wait if thinking of buying, or use your charts to find the level that you think is a good entry to buy. I bought SDS options last week too and lost on them, but also bought some options in the SSO (2x Bullish S&P) which bailed me out.

my $.02