Technical Analysis.

Our short-term trader has made some trades based on our advice and analysis, he was able to make two promising trades that could lead to a tidy profit.

NOTE: This chart of the week is mainly intended 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.

The past week has been an excellent time for anyone who pays attention to our Market Commentary, as we have been predicting that the market would begin to move higher shortly. The week began on a negative note, despite the previous week's supportive VMA spikes to the downside, but as the market declined early in the week, it generated more supportive volume to the downside. When the market reacted to these supportive VMA spikes to the downside, it also generated resistive volume to the upside, but these resistive VMA spikes were not as large - in comparison - to the supportive VMA spikes seen prior to them. Because of this, the supportive volume won out and caused the market to move in a general uptrend for the week. The biggest surprise was on Friday where a combination of good employment news and supportive volume from the previous day helped move the market substantially higher.

This chart is an excellent example of how short-term options traders can use MarketVolume's volume charts to make several successful trades during a single week.

Motivations behind Trades: As the week began, it encountered some resistive volume to the upside, which moved the market lower on Tuesday. We decided to purchase QQQQ calls on Tuesday morning because of the large supportive VMA spike seen that morning and the fact that MarketVolume's Market Commentary stated that the market had yet to react to the large supportive VMA spike seen the previous week. As a result, there was a good chance that the market would move higher in the mid-term, that is, within a week. The market did in fact move higher after our first trade, but on Thursday it did decline a bit in the late morning and in doing so it generate a moderately large supportive VMA spike to the downside. We decided to purchase more QQQQ calls on this supportive volume in order to take advantage of the result. On Friday we got a surprise as better than expected employment report came out and helped move the market significantly higher. Because there was a large amount of resistive volume to the upside during the market's move up, we decided to close all our open call positions in order to play it safe.

How do we know that your trades are based on volume analysis and MarketVolume's Market Commentaries?
All of our trades are based on the results of volume analysis and MarketVolume's published Market Commentaries. Anyone can verify this by logging into MarketVolume.com and browsing through our archive of Market Commentaries. In doing so, we are confident that you will find a better than 85% accuracy rate in predicting short and mid-term trends, as we did this week.

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 NASDAQ 100 index options will not change when trading something like S&P 500 futures.

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.

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.

Why did you trade QQQQ options?
Generally we trade options, and in this case QQQQ (NASDAQ 100 index shares) options because they offer a high return, but are less risky than futures for the NASDAQ 100 index. One can trade NASDAQ 100 index futures, QQQQ stocks, QQQQ options (as we did), or even NASDAQ 100 options on futures. There is a wide array of trading vehicles that are tied to the NASDAQ 100 index, and it's mostly up to the individual trader as to which is preferred to trade.

Conclusion: Overall, volume analysis combined with MarketVolume's Market Commentaries made for some excellent trades this week. The Market Commentaries did state that the market could move lower on Friday in order to generate more supportive volume, but we kept our position open because if the market did move lower it would have been a good point to enter into more QQQQ call positions. During the week, the Market Commentaries always called for the market to move higher in the mid-term and that is what kept us confident with our current position, despite short-term fluctuations.

The same principles mentioned above work 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:

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.