Plain simple

As expected AIG was up to no good with derivatives and faulty accounting practices without marking to market. Voila, the market sold off and right off the start it was below S1(627). Shorts were initiated and closed out by EOD. Tomorrow's numbers are 624, 618 and 607 and more sellings are expected.

good luck

2c

Pivot is king...

Recalled we said position for shorts yesterday. Today, it dropped at open because of lousy GDP. But no sweats, as soon as it fell below 635 pivot, shorts were initiated and they were closed out at
about s1 (631). The rest of the day was left to the amateurs. Since it closed below s1 today, more sellings are expected tomorrow. Follow the pivots and you will never get hurt. Unlike others, we do not have to straddle anything nor do we have to play market both ways for we know what we are doing with powerful statistical analyses that are into the futures. Remember we have not lost one single trade so far. Today is the last day chart is posted. From now on use your imagination. Tomorrow's numbers are 634, 631 and 627. You can see this is an NR7. However, since we are sitting on the confluence of averages, it can still break out either side. The bias though is down.

2c

Are'nt we having fun..

As expected yesterday's surpassing of r1 by the close triggered off a sell-off in the morning. This was also because of the bad durable goods numbers. Then B2 Bomber Ben spoke and became Helicopter Ben again. While he spoke, OEX pivot 633 held and you can see from the chart, longs were fired off. They were closed at 638ish level, having three tries to break it without success. This is also the all important area. Tomorrow's numbers are 639, 635 and 631. It is at the overbought area, although there should theorectically more room to go but scaling out of longs and position for shorts are in order.

2c

Another good day...

It was prudent to close out the longs yesterday for any overshoot past r1 will almost always trigger a retracement in the morning albeit strong trend. This morning we had bad PPI and HD reports. However, the market is on an up trend and pivot 628 held. Longs were initiated and the news from IBM just fueled the up move. Again, as you can see in the chart, the longs were closed out when
r1 (635ish) was reached . Not to be greedy, there is sometimes overshoot by the late comers and you can see they were the losers by the close. Tomorrow's numbers are 640, 633 and 628. This 635 area is an important area, and one would not be surprised to see some retracement before going up again especially when it is overbought. The market is attempting to stage an intermediate up trend, if it can close above 635. The chart is to show how pivot numbers can be used to trade profitably. Real time posting of trades is not the objective of this blog for there is no need to prove anything. Recognitions and glories can be left to other posters. Realisation of monetary rewards way surpasses any other recognitions.

2c

Beauty

Two trades were done successfully today. As soon as the market reached OEX r1 (627-628) a short was in order and was closed out at pivot 620. Why? because it held. Longs were initiated as it rose beyond 620 and closed out by the end of the day. Why? because it has gone past r1 (628) and beyond. Now that it has broken out of the symmetrical triangle to the up side more rise could be seen. Tomorrow's numbers are 635, 628 and 623. If it is a bullish trend under normal circumstances you would see it ride on r1 till it drops. But this is a skittish abnormal market and tomorrow we have PPI, Consumer confidence etc. and it is better to get what the market gives you and not be too greedy. As a side bar, this blog experienced the first spam on the weekend and in order to keep this blog clean, comments will be moderated from now on and you can still put in comments by validation and remain anonymous if you wish. Freedom after all has a price.

2c

Weekend update...diary of an option trader

In order to clarify how profits can be made from the market via options the following chart helps to explain the diary of last four trades. Notice trades were fired off at r1 and s1 levels and pivots are used to gauge the very short term trends. You can see the pivots are still sloping down that means further down trend is expected until proven otherwise. Longs are closed out at r1 or higher and shorts were closed out at s1 or lower.

Here's the summary of approximately how the last four trades were done using one OEX contract as an example.

Feb 19, Mar OEX 630 put, 18-22, $400 profit
Feb 20, Mar OEX 620 Call, 16-21, $500 profit
Feb 21, Mar OEX 630 put, 18-22, $400 profit
Feb 22, Mar OEX 620 put, 16-20, $400 profit

Now you can imagine, the effect of mulitplier if you have multiple contracts. You can also visiualise how the next day's plan is. This perhaps will clarify why just numbers are mentioned day after day and this is not so boring after all and is actually very exciting if you have money in your pocket everyday.

2c

Day trading for survival?

Right after it could not surpass 623 pivot, short was in order and a contination of yesterday's sell off until it hit S1 614 and below. If you followed the numbers and the plan, you would not get slaughtered by the AMBAC bail out news by the close. If you are day trading, the important times are 10 am and 2 pm. whereby market normally turns. Ya, it was massive short coverings. Today, as anticipated, it fell out of the symmetric triangle signaled by the double WR7 but what happened at the close distorted it and now it is back inside the triangle. However, it has not changed the sentiment one iota. Next week there will be a flurry of economic data such as PPI, Housing, Consumer sentiment etc and all can be assumed to be bad. Except of course, the truth of the Ambac bail out news. If anything else, it will provide a higher ground to short from, there is unfinished business on the down side. Monday's numbers are 628, 620 and 615.

Have a good weekend.

2c