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Best Short-Term Trade
November 23rd, 2003
Our mid-term index options trader traded QQQQ
options for this best trade of the week, but one could have traded
NASDAQ 100 index shares or options using the same method. These trades
were based on strong volume indicators and Market Commentary.
This week's Best Trade of the week is a
continuation on our
previous best trade where we left a QQQQ Call position open.
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 |
| Put #1 (QQQQ December) |
+18.75% |
| Put #2 (QQQQ December) |
+35.71% |
| Put #3 (QQQQ December) |
+61.11% |
| Put #2 (QQQQ December) |
+81.25% |
|
Total Profit: |
+$12,800 |

Even though all the above trades were not entirely without
risk, we came out on top with a profit of
$12,800
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.
What is a 'VMA spike to the upside' (resistive volume)?
Simply put, that means that most of the volume spike was connected with the
index while it was moving up.
We would like to show the
motivations that led to the above trades; therefore, we have created what we
call a 'Table of Motivation':
|
Trade |
Volume Motivation |
Market Commentary on Members Home Page during
the trade |
Buy Put#1
10/29/2003
Was left opened
last week |
As the market
continued to decline, it encountered several more supportive VMA spikes to
the downside at 13:40, 14:30 and near the end of the day. |
We believe that today's supportive volume
could cause the market to move higher mid-term. |
Buy Put #2
10/30/2003
Was left opened
last week |
At 12:00, as the
market moved higher, it encountered a large resistive VMA spike to the
upside. |
We believe that the market can move lower
in the short-term as it has not reacted to recent resistive VMA spikes
to the upside. |
Buy Put #3
11/03/2003 |
As the market
opened, it encountered a moderately large resistive VMA spike to the upside
as it moved sharply higher. By 12:00 the market began to move higher again,
but in doing so encountered more resistive volume to the upside at 13:00 and
at 14:45. |
Overall, we believe that cumulating resistive
volume from over the past week is setting the market up for a short-term
correction. |
Buy Put #4
11/12/2003 |
As the market opened
it encountered a moderate resistive VMA spike to the upside. By 11:30 the
market began moving higher again, but as it did, it encountered more
resistive volume to the upside at 12:00. By 13:30 there was another
resistive VMA spike to the upside. Overall, the market activity was
dominated by resistive volume to the upside; at no point were we able to see
any significant supportive VMA spikes to the downside |
Overall, because of today's fairly flat
market combined with more resistive volume, we see that the market has
more room to move lower in the short-term. |
Sell Put #1,2,3,4
11/03/2003 |
By 12:00 there was a
moderately large supportive VMA spike to the downside. Throughout the rest
of the afternoon the market continued its decline, but in doing so, it
generated a large amount of supportive volume to the downside. This
supportive volume was split into three major peaks occurring at 14:10, 15:00
and at the end of the day. |
Overall, we believe that the market could
begin to move higher in the mid-term because the market didn't react to
today's large amount of supportive volume to the downside by producing an
end-of-day rally. |
The same principles mentioned above also work for trading the
NASDAQ 100, S&P 100, Dow Jones, as well as other indexes.
Here is a detailed list of our investor's trades, which netted
the above returns:
|
Date |
Trade |
Strike |
Expiration |
Contracts |
Contract
Price |
Amount |
Profit |
| 10/29/2003 |
Buy Put #1 |
$34 |
December |
80 |
$0.8 |
-$6400 |
|
| 11/18/2003 |
Sell Put #1 |
$34 |
December |
80 |
$0.95 |
+$7600 |
+$1,200 |
| 10/30/2003 |
Buy Put #2 |
$34 |
December |
80 |
$0.7 |
-$5600 |
|
| 11/18/2003 |
Sell Put #2 |
$34 |
December |
80 |
$0.95 |
+$7600 |
+$2,000 |
| 11/03/2003 |
Buy Put #3 |
$35 |
December |
80 |
$0.9 |
-$7200 |
|
| 11/18/2003 |
Sell Put #3 |
$35 |
December |
80 |
$1.45 |
+$11600 |
+$4,400 |
| 11/12/2003 |
Buy Put #4 |
$35 |
December |
80 |
$0.8 |
-$6400 |
|
| 11/18/2003 |
Sell Put #4 |
$35 |
December |
80 |
$1.45 |
+$11600 |
+$5,200 |
|
Total: |
+$12,800 |
To see
any of our past best trades, simply select from
the list below.
|
Date |
Indicator |
|
December 21, 2003 |
QQQQ Options |
|
December 14,
2003 |
QQQQ Options |
|
December 7,
2003 |
QQQQ Options |
|
November 30,
2003 |
QQQQ Options |
|
November 23,
2003 |
QQQQ Options |
|
November 9, 2003 |
QQQQ Options |
|
October 31,
2003 |
QQQQ Options |
|
October 24,
2003 |
QQQQ Options |
|
October 17,
2003 |
QQQQ Options |
|
October 10,
2003 |
S&P 500 (SPX) |
|
October 3, 2003 |
QQQQ Options |
|
September 25,
2003 |
QQQQ Options |
|
September 16, 2003 |
QQQQ Options |
|
September 11,
2003 |
S&P 500 (SPX) |
|
September 5,
2003 |
S&P 500 (SPX) |
|
August 27, 2003 |
QQQQ Options |
|
August 15,
2003 |
QQQQ Options |
|
August 4,
2003 |
QQQQ Options |
|
July 28, 2003 |
NASDAQ 100 |
|
July 25, 2003 |
S&P 500 (SPX) |
|
July 12, 2003 |
NASDAQ 100 |
|
July 2, 2003 |
NASDAQ 100
(NDX) |
|
June 27, 2003 |
NASDAQ 100
(NDX) |
|
March 28,
2003 |
NASDAQ 100
(NDX) |
|
March 11,
2003 |
NASDAQ 100 |
|
March 4, 2003 |
NASDAQ 100
(NDX) |
|
February 12,
2003 |
NASDAQ 100
(NDX) |
|
February 4,
2003 |
S&P 500 |
|
January 29,
2003 |
S&P 500 (SPX) |
|
January 24, 2003 |
S&P 500 |
|
January 22,
2003 |
NASDAQ 100
(NDX) |
|
To see
any of our past best trades, simply select from
the list below.
|
Date |
Indicator |
|
December 30, 2002 |
NASDAQ 100 |
|
December 19,
2002 |
S&P 500 (SPX) |
|
December 10, 2002 |
NASDAQ 100 |
|
November 27, 2002 |
NASDAQ 100 |
|
November 20,
2002 |
NASDAQ 100
(NDX) |
|
November 13, 2002 |
NASDAQ 100 |
|
November 6,
2002 |
S&P 500 (SPX) |
|
November 1, 2002 |
NASDAQ 100 |
|
October 25,
2002 |
S&P 500 (SPX) |
|
September 25, 2002 |
NASDAQ 100 |
|
September 18, 2002 |
S&P 500 |
|
September 6,
2002 |
S&P 500 (SPX) |
|
August 21
2002 |
NASDAQ 100
(NDX) |
|
August 14
2002 |
S&P 500 (SPX) |
|
August 7,
2002 |
S&P 500 (SPX) |
|
July 31, 2002 |
NASDAQ 100
(NDX) |
|
July 24, 2002 |
NASDAQ 100
(NDX) |
|
July 17, 2002 |
NASDAQ 100
(QQQQ) |
|
July 10, 2002 |
S&P 500 (SPX) |
|
June 26, 2002 |
NASDAQ 100
(QQQQ) |
|
June 14, 2002 |
S&P 500 |
|
June 12, 2002 |
NASDAQ 100
(QQQQ) |
|
June 5, 2002 |
S&P 500 (SPX) |
|
May 31, 2002 |
S&P 500 |
|
May 29, 2002 |
NASDAQ 100
(QQQQ) |
|
May 22, 2002 |
NASDAQ 100
(QQQQ) |
|
May 17, 2002 |
S&P 500 |
|
May 15, 2002 |
NASDAQ 100
(QQQQ) |
|
May 8, 2002 |
S&P 500 (SPX) |
|
May 3, 2002 |
NASDAQ 100 |
|
May 1, 2002 |
NASDAQ 100
(QQQQ) |
|
April 28, 2002 |
NASDAQ 100 |
|
April 22, 2002 |
NASDAQ 100 |
|
April 3, 2002 |
S&P 500 |
|
February 25, 2002 |
S&P 500 |
|
February 8, 2002 |
NASDAQ 100 |
|
January 30, 2002 |
NASDAQ 100 |
|
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