Stock Markets
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Last: 3 hrs ago by ProgN
Hey Jeff - You are apparently caught in a blackhole with the duped posts!
LOL of Lord I thought I deleted all but one, apparently made it worse...glad I trade better than I post 
btw speaking of that, that was kind of stream of conscious, I'll come back later this afternoon and clear up some of those concepts for those interested
btw speaking of that, that was kind of stream of conscious, I'll come back later this afternoon and clear up some of those concepts for those interested
Someone asked on another forum so posting here.
We hit the resistance wall and started some volatility intraday. Will we just go sideways like the last 2 tops for weeks? No idea. Will post when I am moving in shorts/puts big. Started buying 1000 SPY Puts at the top levels and then selling half on the resistance bounce down like yesterday(yesterday being Tuesday at the time of this post and previously posted on here). Once I've confirmed resistance I do this quite frequently waiting for the larger drop and then I can convert as many as 50k SPY shares short longer term. (For example yesterday we came back towards the resistance top so buying SPY put options on the cheap is not a bad strategy. It looks like it might work again with futures down 68 this morning)
I buy the weekly SPY Puts $4-5 out of the money under a dime. For example the latest turn was Monday just before close. We had bounced off resistance top into negative territory. SPY is trading around 206.20 into the close. I look at the $200.50 Put options and they are trading at 6 cents so I buy 1000 options which is leveraging 100k shares of SPY. Cost of $6000 at risk. Tuesday morning Futures are red and sink into the opening. The options spike to 19 cents and I sell 500 at 18 cents. So now I've got my $6k back plus an additional $3k for my trouble. Plus I had the 500 other options. No dice. Markets find some support and then bounce back today (Wednesday) leaving those remaining options virtually worthless unless we have a harder fall by Friday (still might happen). Rinse and repeat this scenario as many times as it takes as long as the resistance holds I will end up positive cash on the strategy and then grand slam when the market breaks down.
See chart below...Topping sideways action took 9 months first time. 2nd time it took 3 1/2 months. And we have now hit resistance just below the 3 1/2 month sideways action. Frankly I view this as fairly easy trading when we get to where we are now. You short or buy Puts on any days that test the upper high range set last week. If you are really wanting to play it safe buy Puts only on days when the markets hit above that high expecting a quick rubber band pull back down that gets those options moving quickly upward. If the unthinkable happens and we see a break above the 3 1/2 month highs then it either retreats intraday or no more than the next day or else the cycle is broken and its a new game.
quote:
Bump. What's the latest, OA1?
We hit the resistance wall and started some volatility intraday. Will we just go sideways like the last 2 tops for weeks? No idea. Will post when I am moving in shorts/puts big. Started buying 1000 SPY Puts at the top levels and then selling half on the resistance bounce down like yesterday(yesterday being Tuesday at the time of this post and previously posted on here). Once I've confirmed resistance I do this quite frequently waiting for the larger drop and then I can convert as many as 50k SPY shares short longer term. (For example yesterday we came back towards the resistance top so buying SPY put options on the cheap is not a bad strategy. It looks like it might work again with futures down 68 this morning)
I buy the weekly SPY Puts $4-5 out of the money under a dime. For example the latest turn was Monday just before close. We had bounced off resistance top into negative territory. SPY is trading around 206.20 into the close. I look at the $200.50 Put options and they are trading at 6 cents so I buy 1000 options which is leveraging 100k shares of SPY. Cost of $6000 at risk. Tuesday morning Futures are red and sink into the opening. The options spike to 19 cents and I sell 500 at 18 cents. So now I've got my $6k back plus an additional $3k for my trouble. Plus I had the 500 other options. No dice. Markets find some support and then bounce back today (Wednesday) leaving those remaining options virtually worthless unless we have a harder fall by Friday (still might happen). Rinse and repeat this scenario as many times as it takes as long as the resistance holds I will end up positive cash on the strategy and then grand slam when the market breaks down.
See chart below...Topping sideways action took 9 months first time. 2nd time it took 3 1/2 months. And we have now hit resistance just below the 3 1/2 month sideways action. Frankly I view this as fairly easy trading when we get to where we are now. You short or buy Puts on any days that test the upper high range set last week. If you are really wanting to play it safe buy Puts only on days when the markets hit above that high expecting a quick rubber band pull back down that gets those options moving quickly upward. If the unthinkable happens and we see a break above the 3 1/2 month highs then it either retreats intraday or no more than the next day or else the cycle is broken and its a new game.
P.S. SPY bounce back up near resistance closed at 206.40. So what would knowing everything explained above mean your trade would be into close yesterday?
SPY premarket is 205.27. DOW futures down 75. See how it works?
Any shorted shares based on this approach would be closed right now premarket. You book the profit on a one day overnight win because of the sideways market action. You then sell 50% of your puts to lock in profits and cover cost of remaining 50%. Let your put options lead you into a potential breakdown off resistance tops during potential sideways action.
SPY premarket is 205.27. DOW futures down 75. See how it works?
Any shorted shares based on this approach would be closed right now premarket. You book the profit on a one day overnight win because of the sideways market action. You then sell 50% of your puts to lock in profits and cover cost of remaining 50%. Let your put options lead you into a potential breakdown off resistance tops during potential sideways action.
http://www.businessinsider.com/jamie-dimon-letter-to-jpmorgan-shareholders-2015-4
http://www.businessinsider.com/china-unloads-overcapacity-on-the-world-2016-4
2nd article is for the Trump supporters who believe his rhetoric on China trade imbalance is an easy fix. It's not just going away by making a better "deal" Donald.
http://www.businessinsider.com/china-unloads-overcapacity-on-the-world-2016-4
2nd article is for the Trump supporters who believe his rhetoric on China trade imbalance is an easy fix. It's not just going away by making a better "deal" Donald.
I really appreciate the insight on the put buying. Thanks.
Bonds collapsing sending markets to session lows. Yield curve telling us no good economic outlook ahead.
Yellen and other Fed board trying to prop up markets with words. Yellen actually said we're not in a bubble market last night. There's the government for ya.
But hey, they nanaged to give futures a bounce to +78 DOW meaning sideways action fun!
Greenspan came out of his moth balls with a reality comment basically contradicting Yellen and other dovish Feds.
The markets are going to teach Yellen a fact about hot air.
But hey, they nanaged to give futures a bounce to +78 DOW meaning sideways action fun!
Greenspan came out of his moth balls with a reality comment basically contradicting Yellen and other dovish Feds.
The markets are going to teach Yellen a fact about hot air.
True. Which is why covering short positions on days like yesterday and taking put option profits are the directive until the analysis says markets have reversed.
I love the trading at resistance tops. Easiest trading you ever get.
I love the trading at resistance tops. Easiest trading you ever get.
Real time trade entry. TWTR Friday (15th) $17 strike Call Options in at $.20 cents. Stop at 15 cents. Looking for 40 cents for a double
Update....options already jumped to 31 cents. If we hit 40 today I'll sell half on the reversal signal and recapture my investment and then let the rest continue.
Nice!
quote:Meh - Should have sold them all. Now I've covered cost but it fell back with market. They are back at my entry price and if todays low holds above Friday close I will buy back the other half at close.
Nice!
Played with VXX today. Got in for 18.21 and out at 18.55. I'll live with that
I had to be away from the markets after the TWTR buy. I had the 40 cent sell fill but I missed the SPY Put fill miss by 3 freaking cents! I had projected resistance levels and entered the trade before leaving.
Being right doesn't pay if you aren't in. But is everyone seeing that resistance on the daily clearly now? That's why I call it the easiest money periods on the markets.
Being right doesn't pay if you aren't in. But is everyone seeing that resistance on the daily clearly now? That's why I call it the easiest money periods on the markets.
We have Jim Cramer predicting big earnings surprises and then this guy saying his recession indicators have gone red. Crazy fun world of wall street. 
Bulls
https://www.google.com/url?sa=t&source=web&rct=j&url=http://www.cnbc.com/2016/04/11/cramer-signs-an-earnings-explosion-is-coming.html&ved=0ahUKEwiz36mCionMAhUE5yYKHQijDtAQFggiMAE&usg=AFQjCNEbxA0mUkYGGLg-UM6F3EZqEkpAJg&sig2=sl_nclP5fsVFij7_abglmA
Bears
http://www2.freerealtime.com/content/economist-warns-recession-indicator-has-turned-red-3
Bulls
https://www.google.com/url?sa=t&source=web&rct=j&url=http://www.cnbc.com/2016/04/11/cramer-signs-an-earnings-explosion-is-coming.html&ved=0ahUKEwiz36mCionMAhUE5yYKHQijDtAQFggiMAE&usg=AFQjCNEbxA0mUkYGGLg-UM6F3EZqEkpAJg&sig2=sl_nclP5fsVFij7_abglmA
Bears
http://www2.freerealtime.com/content/economist-warns-recession-indicator-has-turned-red-3
Charting SPX from 09 to 16, the bottom trend line has still not been broken, or really even tested - but trending towards it.
Going to test upper resistance again this morning. Get your "putcorn" ready.
Too keep tossing in some live trades, Yesterday afternoon:
After the drop in SBUX price yesterday,
Sold May SBUX Put 57.5 strike for 1.15... makes a break even of SBUX at 56.35. Max return of 1.9% over approximately a month. SBUX can fall 3.3% and still get the max return, can fall 5.2% and still break even. So 5.2% downside protection, and potential 1.9% 30 day return.
After the drop in SBUX price yesterday,
Sold May SBUX Put 57.5 strike for 1.15... makes a break even of SBUX at 56.35. Max return of 1.9% over approximately a month. SBUX can fall 3.3% and still get the max return, can fall 5.2% and still break even. So 5.2% downside protection, and potential 1.9% 30 day return.
DOW is above recent resistance. SPY below.
2081 is the trend line on S&P
Correct
Here is DOW intraday so far. See the clear resistance 3 top bounce down. If you short there it's an easy decision to cover if it gets broken.
quote:I always trade the 3rd intraday resistance top above previous 5 day resistance highs. top so am short the 3rd 2085.
I'm shorting 2081 for a trade if we get there in the next 30-45 minutes
TWTR $17 CALLS posted Monday are now in the money!
quote:Jake what is the strategy you apply on the short on this kind of trade? Obviously multiple approaches. A good rule is that the 3rd bounce down on the 3rd resistance top becomes the lowest one and that held true in this case. I generally trade very large on the short and cover 50% if we hit 20 points lower (when trading DOW). We got that and I covered half. That gives me a 20 point cushion if we blip above my entry point.
I'm shorting 2081 for a trade if we get there in the next 30-45 minutes
I absolutely love reducing/eliminating risk. That's why I sold half of TWTR $17 Call options when they doubled earlier this week. I've been comfortably watching the rest of the options without risk to initial capital.
If we have a further drop in the DOW today then I would eye a Friday Call option on the cheap for ultimate protection. I prefer to enter those on Thursday for time decay reasons but if the short pays off enough then I'm getting risk adverse with the Call option.
Jake I hope you took one of the above strategies on the whoosh down. DOW dropped 50 points on the 5 minute. Could be a shake or could be a reversal. Great opportunity to cover some shorts and have price advantage.
Got back in VXX yesterday for 18.20. Too soon. Riding it for now, looking for breakdown at resistance.
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