Posted on July 1st, 2009 by
Mojo
Well, we are clearly in the summer doldrums. SIGH! Low volumes, weird patterns, and lots of frantic activity in the morning followed by pretty sleepy afternoons. Monday was a nice run up and then ZZZZZ. Tuesday was a nice run down and then ZZZ. I used yesterday’s run down and increase in volatility to lock in the lower strikes on my iron condor for August. Fills were very tough so I ended up having to break my vertical into two separate orders to get filled.
If you are day trading, be sure to stick with the morning activity and then take the afternoon off.
Mojo
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Posted on June 24th, 2009 by
Mojo
Its the first Wednesday after expiration so tonight we are going to have a regular team meeting. So far on the agenda we are going to cover:
What’s next for the Big Markets?
Where are the tech stocks heading? (Oracle, Apple, and MSFT)
What’s the future for volatility and how can we take advantage of it?
How do we need to adjust our trading style for summer volumes?
What specific technical setups are we looking at and what’s the best time to enter?
If there is anything else you would like for us to cover feel free to email me. As usual our meeting starts at 7:30pm ET via Webex. It will be recorded so if you can’t make it tonight you can stream or download the recording at anytime.
If you are interested in joining our trade team and attending our meetings please email me at mojo at insanemoney dot com.
Have a great day!
Mojo
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Posted on June 22nd, 2009 by
Mojo
Even though we never got a good signal to enter long on Google (GOOG) I’ve continued to watch the other techs and especially the Nasdaq 100 (NDX). Right now we are sitting just above the reversal zone on a minor ambush. See below:
More aggresive or bullish traders will enter now but I’m going to wait a bit and look for a breakout on the 60 min chart. Check the forum thread and I will do my best to update you.
Mojo
PS - Futures are only up +2 (YM) after hours so I’ll be watching these as well. If we get a smallish gap down Tuesday morning I may enter with a small pilot position.
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Posted on June 15th, 2009 by
Mojo
I’ve been watching Google (GOOG) and Apple (AAPL) for potential clues to where the Nasdaq 100 (NDX) may be heading. About a week ago I saw Google front run the NDX and start to head down. From Friday’s close and this morning’s lower futures it looks like Google is heading for the reversal zone (that area on the Fibonacci retracements between 50% and 61.8%.
More aggresive traders will enter immediately at the 50% mark. For me, I’m willing to miss a little bit of the upswing and will wait for confirmation. A good way to do that is to drop down a time phase (from daily bars to hourly bars) and wait for a breakout or cross in the exponential moving averages (8 EMA moving above the 21 EMA).
Stay on your feet and hold to your stops. Summer time can be pretty squirelly!
Mojo
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Posted on June 11th, 2009 by
Mojo
I was pretty surprised by how bearish yesterday’s market action was. Not by the gap fill (where the market opened much higher than yesterday’s close and reversed to the downside), but by the continued downward pressure. Watching gold, commodities, and other minor markets confirmed that I was probably a bit too bullish in my posture so I took a fresh look at the markets.
Here’s what I found:
We are sitting just below pretty strong overhead resistance at 8800. The volume is declining which is usually a weakening but that could also be due to the summertime. Weak MACD are turning down and ATR (or total distance from the high to low each day) is getting smaller. By themselves, it would be a toss up. Taken together, things are looking short term weaker.
My best guess is to look for a push away from 8800 to the downside with a reversal and eventual breakout on big news. One we breakout pay attention to the 9,000 level resistance. If we slice right through it without retracing we should be at 9,500 in short order.
I going to use this bearish move down to cash in my bearish trades and setup some neutral / bullish trades on the cheap.
Mojo
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Posted on June 8th, 2009 by
Mojo
Looks like we are heading into a bit of a downdraft this morning. It is reasonably expected with the big run last week, decreasing summer volume and approaching whole number (950 and 8,800) overhead resistance.
I still think we are long term bullish so I’m going to use this short pullback to close out some bearish trades for profit and (more importantly) to setup some bullish trades on the cheap.
Like most summers I will be reducing my size, trading more delta neutral, and being more careful of news events since the lower volume market seems to react more dramatically. No since reunioning a good vacation with a poor trade!
Mojo
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Posted on May 27th, 2009 by
Mojo
I started an NDX double calendar from a thread I was reading in a yahoo group. The conversation was about when to use calendars and why using calendars right now made a lot of sense with the volatility so low.
Anyway, I legged in to this one first on the bottom side (puts) and then on the top side (calls) a few days later. That allowed me to get good fills and almost immediate profit. Take a look at this graph:
The vertical red line on the left is the lowest break even point at 1310.24. The vertical red line on the right is the highest break even point at 1493.90. The line in the middle is the ‘live line’ or current price.
Right now, we are sitting at a profit of close to +15%. This is inline with my profit target so I will be really sensitive to any losses from here. I will likely close this down or pare down my position if my profits starts to decrease. (It’s tough to do this when you consider that I could hold closer to expiration and possible reach 30% or better!)
Important Note: Remember that our TOS analyzer is only showing the profit at expiration assuming volatility stays the same. If vols go down it will be a lot less (if any). If vols go up it could be much more. Don’t be fooled! The price could stay exactly where it is and I could still lose money.
Mojo
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