Technical Analysis. |
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Highlight Investments Group |
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March 28, 2003
Our mid-term index trader traded QQQQ shares for this best trade, but one could have traded NASDAQ 100 options the same way. These trades were made based strong volume signals and our Market Commentary.
NOTE: This chart of the week is meant mainly for educational purposes. We don't recommend that our customers follow these exact trades. We suggest that you develop your own trading style and try doing some paper trading before using our volume analytics.
| Security | Return |
| Sell QQQQ 1 | Holding |
| Sell QQQQ 2 | +3.5% |
| Sell QQQQ 3 | Holding |
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Total Profit: |
+$1,900 |
Even though all the above trades were not entirely without risk, we came out on top with a profit of $1,900
Why trade only stocks (index
shares) and not options?
Due to the current climate in the market, and the fact that this trader's
goals were to make a decent return but still remain fairly safe in his trades,
he decided only to trade stocks. Even if the market had not changed in his
favor, he could have held onto these shares for months without having to worry
about losing a lot of money as he could if trading options or futures. Simply
put, he wanted to make secure trades.
When should I pay attention to the Market Stage in your
Market Commentary?
If you are planning to do long-term or even some longer mid-term trading,
then we suggest that you follow the trend that is set in our Market Stage
section of the Market Commentary. The Market Status section is mostly meant for
mid- and short-term traders who have trades that last less than a week or two.
I trade the S&P 500 / SPDRs. 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 S&P 500 index
shares, and options.
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.
We would like to make clear to our members the motivations that led to the above trades. We have created what we call a 'Table of Motivation', in which we try to make clear the purpose behind each of the above trades.
| Trade | Motivation | MV's Commentary on Members Home Page during the trade |
| Sell QQQQ 1 | Based on the fact that the market has just finished making a large jump up on a lot of resistive volume and the fact that MarketVolume's Market Commentary predicted this jump, found that it was an excellent point to open a mid-term short position for QQQQ shares. | We believe that this large supportive volume spike will cause the market to continue to move higher in the short and mid-term. What we expect to see next week is for the market to move higher next week and perhaps give back some of those gains midweek, generating more supportive volume. |
| Sell QQQQ 2 | Once again, MarketVolume's Market Commentary predicted the market's reaction to the previous day's volume, due to this and the fact that there was a large amount of resistive volume to the upside today, decided it would be a good point to open more mid-term QQQQ short positions. | We expect that due to the cumulating amounts of resistive volume and an almost complete lack of supportive volume, that the market will move down in the mid-term. In the short-term there is a chance for the market to move slightly higher, as tomorrow is a triple-witching day. |
| Buy QQQQ 2 | As MarketVolume predicted in its Market Commentary, the market moved quite a bit lower today. This was a good point to close an open QQQQ short position and make a handsome profit. The outlook as stated in the Market Commentary is still down, that's why not all QQQQ short positions were closed. | The resistive VMA spikes that we saw today were the largest VMA spikes that we have seen all week. Overall, these signals all point to the market moving lower in the coming week. Since the market move higher again today with large amounts of resistive volume, it only serves to increase the likelihood of the market having a mid-term correction to the downside shortly. |
| Sell QQQQ 3 | Once again, there was more resistive volume to the upside for the market. The Market Commentary also mentioned that the market will probably be trying to retest its March 12th lows in the mid-term, so this was a good point to enter into a third short position. | Overall, the supportive and resistive volumes today cancelled each other out. We believe that in the mid-term the market will continue to move lower, but in the short-term the market may continue to behave in a similar fashion as it did today. Basically, our outlook is for the market to perhaps move slightly higher in the short-term before moving lower in the mid-term. |
The same principles mentioned above works for trading S&P 500, S&P 100, Dow Jones, and other indexes.
Here is a detailed list of our investor's trades, which netted the above returns:
| Date | Action | Shares | Price |
Index Value |
VMA | Amount | Profit |
| 03/17/03 | S 1 | 2,000 | $26.59 | 1,068.31 | 1,924,900 | $53,180 | |
| 03/21/03 | S 2 | 2,000 | $27.04 | 1,087.57 | 1,705,000 | $54,080 | |
| 03/24/03 | B 2 | 2,000 | $26.09 | 1,048.94 | 1,039,900 | $52,180 | +$1,900 |
| 03/27/03 | S 3 | 2,000 | $26.23 | 1,055.18 | 1,015,800 | $52,460 | |
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Total: |
+$1,900 | ||||||
To see any of our past best trades, simply select from the list below.
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To see any of our past best trades, simply select from the list below.
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QQQQ Trading System QQQQ, SPY and DIA trading signals for conservative mid- and long-7 term traders ...
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