Technical Analysis. |
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June 20th, 2004
This "Trade of the week" was based on our volume indicators.
This week's “best trade of the week”
is a continuation of the
previous week’s best trade,
where we left a QQQQ Put position open.
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NOTE: We discuss our “best trades of the week” here mainly for educational purposes. The trading examples we illustrate are based principally on our volume indicators and market commentaries. Our main intent is to show you how you can apply our volume indicators and to explain the specific correlations that exist between volume spikes and the movement of the indexes. We do not mean to imply that you should follow our exact trades, but rather wish to suggest that you may make use of our volume analytics to develop your own trading style. We also urge you to paper trade before committing your money to the markets.
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Nasdaq 100 Indicator |
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 |
| Buy Put #1 06/02/2004 Was left opened last week |
As the market began to move higher, it encountered a moderately resistive VMA spike to the upside at 12:30. The resistive volume did not reverse the advance, but managed to slow its pace. The market continued higher through to 13:30, when we noted a second moderately resistive VMA spike to the upside. During the market's afternoon rally, it encountered a moderately large resistive VMA spike to the upside, which came to a peak at 14:30. |
| Buy Put #2 06/04/2004 Was left opened last week |
The market opened with a substantial gap up. During the advance, a very large resistive VMA spike to the upside was generated at 12:45. |
| Sell Put #1,2 06/04/2004 |
Initially the market opened moderately lower, at which point (9:30) it encountered a huge supportive VMA spike to the downside, and it immediately began to move sharply higher. |
These are the trades which netted the returns shown above:
Date |
Trade | Strike | Expiration | Contracts |
Contract Price |
Amount | Profit |
| 06/02/2004 | Buy Put #1 | $37 | July | 50 | $1.35 | -$6750 | |
| 06/18/2004 | Sell Put #1 | $37 | July | 50 | $1.1 | +$5500 | -$1,250 |
| 06/04/2004 | Buy Put #2 | $37 | July | 75 | $1.35 | -$10125 | |
| 06/18/2004 | Sell Put #2 | $37 | July | 75 | $1.1 | +$8250 | -$1,875 |
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Total: |
-$3,125
(-18.5%) |
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To see any of our past best trades, simply select from the list below.
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