Technical Analysis.

Our professional trader had some successes and some losses over the past month, but still came out on top! He has our volume indicators to thank for having made over $20,000 in the last month!

Since the end of January MarketVolume™ has been notifying it's members that a bottom in the market has been reached based on the very large spike in the volume moving average (VMA) which occurred on January 29 & 30. This volume was unprecedented, as we have not seen such a large concentration of volume since September 20, and based on this and history we concluded that we must have reached a long-term support level for the market.

As would be expected from such a large increase in the VMA, the market did go up, but only until the beginning of February. We continually warned our customers that the market will try to test and re-test the support level, and it indeed did. The market continually bounced up and down from the support level for the rest of the month, and each time it reached the support level we saw a large increase in the VMA. During this period conservative traders could have placed long orders at the support level and not have to worry about the market going below that level.

The S&P 500 index is one of the best examples (as well as the NYSE, Russell 1000/3000, and S&P 100 indexes) of where the support level is situated. Although, one might say that the NASDAQ 100 did not obey the rules of this support level, as it did not bounce back like the S&P 500 and other indexes did. In the end the NASDAQ 100 did form a support level of it's own at about 1,330, and did bounce off of that point with even more rigor than the S&P 500 index did.

The reason the NASDAQ 100 took longer to realize a support level is mostly an issue of investor confidence. It took almost a month of the S&P 500 bouncing off the support level for investors to realize that this really is a support level in the market, and with that knowledge they had more confidence to place orders for NASDAQ issued stocks. As the S&P 500 rechecked it's support level for the 4th time (Feb 22), investors took advantage of this to begin purchasing NASDAQ stocks, thereby setting a new support level for the NASDAQ 100 index. Basically investors gained more confidence in the market by seeing that the S&P 500 index would not breach it's support level no matter how many times it tested it, and decided to jump back into the technology laden NASDAQ in order to realize higher gains.

Below we have posted a chart of the trades that our mid-term professional investor executed over the past 30 days. All of the trades are call options for the S&P 500 index (SPX)

The first trade that our investor preformed (Buy/Sell 1) was not a success as when the index failed to immediately reverse, he had doubts that a support level had actually been reached. The loss from the first trade was quickly rectified when the index returned to this level on February 4th (Buy 2 & 3), as the large increase in the VMA, and the fact that the index did not go any lower gave confidence to our investor who saw this as a true support level and began buying options again.

It took only a little over a week for our investor to realize profits, and he sold on two consecutive days (Sell 2 & 3), as he did not want to loose out completely if the market continued to rise.

When the index began to decline again, our investor recognized this opportunity, and waited for the market to reach the support level again. He placed orders where the VMA indicated even more support for the S&P 500 index (Buy 4 & 5).

You can imagine how happy he was when the index shot up like a cannon just after these orders. Not to be too greedy (as the market at the time could have easily re-checked the support level), he sold on Feb 27, just after a nice increase in the market. He held on to his last call options until today when volume at the end of the day signaled a bit of uncertainty, as the level of this volume is quite high, which signaled an increasing change for the market to go down again. Therefore he sold nearly at the end of the day today, recognizing some handsome gains.

Based on MarketVolume's analysis, our professional investor was able to make the following returns:

Here is a detailed list of our investor's trades, which netted the above returns:

To see any of our past best trades, simply select from the list below.