Technical Analysis. Nasdaq 100,

Our mid-term trader has made some profitable trades recently. Based on our advice and analysis, he was able to make a $13,720 return over two weeks!

In this week's Chart of the Week we continue with where we left off, in last week's Best Trade, by closing all open positions. Over the past few weeks, the market has been down as our Market Commentary predicted. Our professional mid-term trader was able to make several profitable trades, based on MarketVolume's Market Commentary and some very clear volume signals. Since the market is currently in a downtrend, our trader went short on the market by buying puts, even though there were some points he could have theoretically gone long. It is safer to go short in a down-trending market even if you are a day-trader. It has been an excellent couple of weeks for short traders as MarketVolume's predictions have been very accurate.

Basically, this Chart of the Week is an excellent example of MarketVolume's abilities to predict the market! As you can see, we bought 2 puts on January 29th, and closing them today, February 4th, brought us a good deal of profit! To see the previous Best Trade that led to these trades click here.

Motivations behind Trades: The primary motivation for the above trades was MarketVolume's Market Commentary, which predicted a long-term downtrend, and to make conservative mid-term trades that could be backed up with very clear volume signals. Every time we purchased a put options, our trader waited for the index to move higher;  and if there was an appreciable VMA spike to the upside, he would make a purchase. On all of the sell points (closing the put contract), you can see that there were some supportive VMA spikes  to the downside. In general, if trader wants to play it as safely as possible, he would close his open positions on just such a signal. The most important factor was MarketVolume's Market Stage and Market Status sections of the Market Commentary, where the forecast was for a downtrend.

How can this chart be used by me?
Our main reason for publishing these charts is to allow our members to learn by another trader's example  how they can make trades based on our volume signals and Market Commentary. Members can gain a better understanding of how to enter and exit the market, based on when a signal is generated. To learn from these charts, you don't need to trade the specific security mentioned in this publication, but whatever security you feel comfortable with. The principles for trading QQQQ shares will not change when trading something like S&P 500 futures.

I trade the NASDAQ 100 / QQQQ. How does this apply to me?
The S&P 500 and NASDAQ 100 indexes have generally the same behavior. If you overlaid a chart of each of them during a short period such as this one, their general dynamic would be the same. Because of this, you can trade NASDAQ 100 index shares and options. You can probably make more money doing so because the NASDAQ 100 is more volatile.

Can I trade Rydex or ProFund  index funds using your Market Commentary and signals?
Yes, our system is meant for index traders, and there are many Mutual Fund options to choose from when  trading indexes. So yes, our indicators are good for trading Mutual Funds, especially dynamic Rydex funds.

Should I try to paper trade before trading options?
Yes! We suggest that anyone who is new to our signals and analysis try doing some paper trading to start, at least until they are comfortable with interpreting our signals.

Why buy puts that are so far 'out of the money'?
The reason we decided to go with April SPX puts with a strike of 725 is simply because those happened to be the most liquid (easy to buy and sell quickly at a reasonable price) put options available for March.

Conclusion: Our mid-term trader, based on our Market Commentaries and Volume Signals, thinks the market will probably continue on a downtrend. But to play it safe, he  decided to close his outstanding positions in light of recent international news and events.

The same principles mentioned above work for trading NASDAQ 100, S&P 100, Dow Jones, and other indexes.

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.

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