Technical Analysis. |
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January 18st, 2004
Our short-term index options trader traded QQQQ options for this week’s “best trade of the week”, but could instead have traded NASDAQ 100 index shares or options using the same method. This trade was based on our volume indicators and our Market Commentary.
NOTE: We discuss our “best trades of the week” here mainly for educational purposes. We don't recommend that you follow our exact trades. Instead, we urge you to develop your own trading style and to paper trade before committing your money to real trades. Our volume analytics will help you do this.
| Security | Return |
| Put #1 (QQQQ February) | +36.84% |
| Call #1 (QQQQ February) | +30.00% |
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Total Profit: |
+$7,325 |
Even though the trades shown above were not entirely without risk, they resulted in a profit of $7,325
In the following, we would like to show you the motivating factors that led us to take above trades. For this purpose, we have created what we call a 'Table of Trade Motivators':| Trade | Volume Motivation | Market Commentary on Members Home Page during the trade |
| Buy Put
#1 01/09/2004 |
By 12:15 the largest resistive VMA spike of the day peaked. | We still believe that the market may continue its pullback in the resistive volume to the upside. |
| Sell
Put#1 01/13/2004 |
During this descent, the market encountered a moderately large amount of supportive volume to the downside, which was focused into two peaks: a moderate supportive VMA spike at 10:30 and a large supportive VMA spike at 12:00. The | we don't believe that the accumulated resistive volume will have any real influence on the mid-term market, as the < mid-term market is quite bullish and is likely to continue on its current uptrend. |
| Buy Call
#1 01/13/2004 |
During this descent, the market encountered a moderately large amount of supportive volume to the downside, which was focused into two peaks: a moderate supportive VMA spike at 10:30 and a large supportive VMA spike at 12:00. The | we don't believe that the accumulated resistive volume will have any real influence on the mid-term market, as the < mid-term market is quite bullish and is likely to continue on its current uptrend. |
| Sell
Call #1 01/13/2004 |
During the market's late morning and early afternoon advance it ran into a very large resistive VMA spike to the upside. This resistive volume spike began at 11:30, but quickly came to a peak at 12:45. | The fact that the market has not reacted, in the short-term, to the accumulating amounts of resistive volume to the upside leads us to believe that there is now a chance for there to be a mid-term correction |
These are the trades which netted the returns shown above:
|
Date |
Trade | Strike | Expiration | Contracts |
Contract Price |
Amount | Profit |
| 01/09/2004 | Buy Put #1 | $38 | February | 100 | $0.95 | -$9500 | |
| 01/13/2004 | Sell Put #1 | $38 | February | 100 | $1.3 | +$13000 | +$3,500 |
| 01/13/2004 | Buy Call #1 | $37 | February | 85 | $1.5 | -$12750 | |
| 01/15/2004 | Sell Call #1 | $37 | February | 85 | $1.95 | +$16575 | +$3,825 |
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Total: |
+$7,325 | ||||||
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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