OEX 685 was right on target and more. Never thought the bull trap could cause so much damage. It is also hard to believe people would throw away quality stocks like RIMM and AAPL. Day traded RIMM today when it was down almost 14 points and rode it back up. it was a beautiful trade. Not sure if today was the capitulation day, but daily EMA 233 did attract and it halted the decline. Tomorrow on 30 minute chart one would be looking at 692 then 699, EMA 89 which is a Fib No. After that, OEX 705, EMA 233 which is another Fib no. It may be a stretch but another milestone if the market were to go back uptrend. Nasdaq will be under a bit of pressure tomorrow again, since QCOM beats but outlook is not good. Howver, NVDA tops estimates.
One assumption is that the head and shoulder from Oct23 has been completed. But looking at the entire picture, we are not completely out of the woods yet.
2c
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6 comments:
hi 2cents, good trade on RIMM. i went long at 1466, and I was caught in the down move. but I didn't get out. I think today's move is exhaustic, and reaction could last either 1-4 days, or 7-12 days, depending upon the strength of up move tomorrow and monday. I favor 1-4 days, based on the move down so far, which means early next week we start down again. I could be wrong on this one, cuz OPEX week is wacky. Today also fed TOMO is big.
How do you find out if it is a buy or sell on 1400 puts?
thanks
partimer
btw, I cannot read a blog at work during the day, and couldn't get back to you early.
p
Hi PT, same here, I got OEX calls a bit early and is hurting. That was why I did the RIMM trade for a hedge. Actually, I goofed big time in not recognising the H&S or the King's Crown formation. Short at the bull trap or the right shoulder and the profits would have been great. Just agonising over this and making sure I will not miss this pattern again. Foot at IHUB said the H&S is not finished but for his target to be realised, the long term trend will have to be broken. Right now I am assuming it is close enough and is done. See how the declines got stopped at the long term support.
The chart provider I use has +/- indicators for put/call volumes and I just added them.
Carolyn Boroden says that the market moves in symmetry. If you look at the measured move, the two step pattern targeting 1466 is over today. however, there is a large two step pattern from July to Aug, calling for continuation of down move to around 1400 or lower, depending upon which number you use (intra day or close). It is hard to tell at the moment. My guess is we test 1490 in the next a couple of days, and fail, then we go lower.
p
Hi PT,
From July 27 to Sep 5 is one big reverse H&S and that was why Oct 15 was top. From Oct15 to Oct23 27 point wave1, from Oct23 to Nov1 20 points wave2, from Nov1 to Nov8 36 points wave3, we at start of wave4, assuming wave4=wave2=20 points, pivot 684+20=704ish and wave5 down again.
2C
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