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S&P 500 May 17, 2002
Our conservative long-term trader had some good over the past month. Based on our advice and analysis he was able to make over $4,000 in the last month!
| Security | Return |
| Index Shares (SPY) | 5.6% |
Over the past several weeks our conservative long-term player has been paying close attention to our advice and the volume levels for the S&P 500 index. Based on this, he was able to make several successful trades at several critical junctures in the S&P 500 index. Since he is a very conservative trader, he opted on trading spiders (SPY), which is a derivative of the S&P 500 index. Unlike options and futures, SPY's performance follows the S&P 500 index, and therefore you can generally only capitalize on gains of a few percent. Even though the gains are not as high as options and futures, the chance to lose much money is very low.
Our conservative long-term trader made 3 purchases over the past month, all of them associated with elevated volume levels except where our conservative trader made his 3rd trade. His reasoning behind this trade was that there was a small spike in volume at that point, but he mainly based his buying decision on our Market Commentary and the fact that the S&P 500 index appeared to be re-testing it's support level. Therefore, he bought at a point well before the support level just in case the S&P 500 index did not go all the way to it's support level.
We would like to make it clear to our members what the motivation for our professional trader was to make the above trades; therefore, we have created what we call a 'Table of Motivations', in which we try to make it clear the motivation that was behind each of the above trades.
| Trade | Motivation | MV's Commentary on Members home page |
| Buy SPY 1 | The index was approaching the point where it last bounced up and there was a lot of volume as the index was declining; therefore, bought 550 shares of SPY based on a large amount of supporting volume. | As expected, the S&P 500 and NASDAQ 100 indexes moved higher today, but not without volume to the upside. MarketVolume's conservative analysis of the current market stage is that it is still approaching it's support level. |
| Buy SPY 2 | The index broke through it's last local support level, but once again as it did so, volume was increasing steadily day by day. Once volume increased to a point above 3 million, found that it would be an excellent point to average down the price of current position by buying 800 more shares of SPY. | A preliminary analysis of today's volume and the direction of the NASDAQ 100 and S&P 500 indexes, we have come to the conclusion that the market is trying to re-test it's support level as we warned our subscribers yesterday. |
| Boy SPY 3 | Even though the volume was only moderate at this point, found that it would be a good point to place an order, as if the index does decline further it will bounce back of it's support level. | As we have said, the market is still in it's support corridor. On Friday the S&P 500 retested it's support level, and as it approached this level at the end of Friday, the market generated a large amount of volume. This indicates to us that the market has successfully re-tested it's support level and may move further up from here. |
| Sell SPY 1 | Due to a very large amount of volume, decided to close 70% (1,350 shares out of 1975 shares total) of open positions, as there is a chance to buy lower. Decided to do this as a conservative measure, even though 50% of this volume was also on the downside. | The worst case scenario which could happen due to today's volume would be for the S&P 500 and NASDAQ 100 indexes to re-test their support levels. In regards to the market being in an up-trend, we believe that this up-trend could only be a short-term up-trend lasting a few weeks; therefore, we suggest that our subscribers pay close attention to volume as the indexes move up, as if there is enough volume, this could cause the index to begin a new decline. |
| Sell SPY 2 |
Based on MarketVolume's analysis, our professional investor was able to make the following returns:
| Security | Return |
| Index Shares (SPY) | 5.6% |
Here is a detailed list of our investor's trades, which netted the above returns:
| Date |
Buy/ Sell |
Shares |
SPY Price |
S&P 500 Value |
VMA (1-day) |
Amount | Profit |
| 5/1/02 | B 1 | 550 | $107.30 | 1,068 | 3,402,400 | $59,015 | |
| 5/7/02 | B 2 | 800 | $105.90 | 1,054 | 3,184,600 | $84,720 | |
| 5/13/02 | B 3 | 625 | $106.40 | 1,059 | 2,745,600 | $66,500 | |
| 5/15/02 | S 1 | 550 | $109.60 | 1,091 | 3,831,800 | $60,280 | $1,265 |
| 5/15/02 | S 2 | 800 | $109.60 | 1,091 | 3,831,800 | $87,680 | $2,960 |
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Total: |
$4,225 | ||||||
To see any of our past best trades, simply select from the list below.
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