Spiders - March S&P E-mini Futures: The market has established itself in a slightly lower trading range between 875 and 900. The weakness after Friday’s early rally has nullified the rally’s positive indication and I don’t have any idea which way we will move out of this trading range. Even so, I still think that that the 1000 level will be reached next month.
QQQ: The Q’s are headed for 34.
TLT - March Bonds: The market will probably make it to 145 before any substantial break begins.
March 10 Year Notes: The 128 resistance will probably be broken and the notes should reach 130 before the market turns lower.
Euro-US Dollar: The euro has found support near 138.00. I think we shall see a move up to 152.00 or so before the bear market resumes.
Dollar-Yen: I think the 87.50 level will hold and that a rally to 100.00 is imminent.
XLE - OIH - USO – February Crude: The 40.00 level should be support in the February contract. I still think a rally into the 55-60 zone will be the next development.
GLD - February Gold: The 885 level should prove to be resistance and the market should soon resume its move down into the 550-600 range.
SLV - March Silver: I still think this is a bear market. Next resistance above the market is at 1165. Next downside target is 650.
Google: Google has reached the 250-60 target zone which should be the end of its drop from 747.
12 comments:
Can you explain how you arrive at the 70% gain for your emini trading on a $15,000 account? I apologize if I am being so obtuse! thanks very much Mr. F.
One point on an e-mini contract is worth $50. So 210 points profit (net of commissions) equals a profit of $10,500 per $15,000 of equity. This is a gain of 70%.
hi Carl, i think we will rally on wednessday, i have oil rally cycle on that day, and gold. but tomorrow we should go lower, not below the weekly bar, cos we have weekly inside week trading
Carl has been writing a nice paper entitled "Should You speculate?"
I would like to point out the reason why you should not speculate in the present market.
I have been trading SPX 500 options (and usually only that) for the past 5 years.
I have bought a 1125 February call a month ago for $870. Today, the underlying is about the same price (887/863)with a value of .90.
Which means that I have lost 99.9% of my investment after one month, although I have still two months to go.
My broker seems to find this normal with that beta - delta - theta fake of his (How can you build such an assumption on what is a perfect unknown variable - the "real" interest rate?)
Now the question is - How can you make it in a market where your underlying does not move and your "decay" is so bad that you have already lost almost everything after only one third of your alloted time.
This is just a new deal that is impossible to manage.
Spreading spreads and unmanagable decays are the new rules that make trading options an impossible business.
Hi Carl,
I could be very wrong, but according to my work, a close below 827.20 in the March futures any time this week will give me another major sell signal. It now appears that these markets have been working sideways over the past several weeks only to work off the very oversold condition. Now that the oversold condition has been worked off and the near term indicators are over bought, we're now beginning the next major leg down. This will be confirmed with a close below 827.20 at any time this week.
I plan to remain short with my 886.50 sell from yesterday evening until I get a buy signal. I see none on the horizon right now.
Thanks.
Kindest regards,
PM
Hi Carl,
So now that I said I will remain short until I get a buy signal, I decided to cover my short and go long at 871.00 since we're likely to rally tomorrow. No buy or sell signals at the moment, so I may as well play the swings.
Hey, you gotta do whatcha gotta do, the name of the game is making money.
Thanks.
Kindest regards,
PM
Hi Carl,
I went flat at 870.00, being long here doesn't feel right.
Thanks.
Kindest regards,
PM
Carl, there is negative A/D divergence. Are you going to consider it, or do you only report it when it suits the bullish case?
Hi Carl,
Okay, long again at 871.00, and this time I mean it.
Thanks.
Kindest rgards,
PM
Robert:
Before you assume that no money can be made trading options in this environment, imagine for a moment how a short straddle would have performed over the same period. Option volatility became "bubble-like" expensive and some air has been let out.
Carl:
let's take this step-by-step
1) it's a bear market
2) we're going lower
3) a lot lower
Rick B.
P.S. why did you ever abandon the Lindsay domed home study? You had nailed it right on that we're crashing, but now you keep looking for an elusive rally.
In response to roberts comment on options. the vix and option implied volatility has been crushed . This has nothing to do with theta (time decay) . Out of the money options suffer the most. Even though the price is much higher in the money options are really the only way to play if you are buying calls. Selling volatility would have worked better, Bull spreads, even ratios etc.
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