Technical Analysis. |
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August 15th, 2004
This "Short-Term Trade" was based on our volume indicators.
This “best Short-term trade”
is a continuation of the
previous best
trade,
where we left a QQQQ Call position open.
NOTE: We discuss our “best trades” 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.
|
NASDAQ 100
Indicator NYSE: Advance
minus Decline Issues |
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 Call
#1 08/03/2004 Was left opened in previous "Best Trade" |
The market did move lower today, and in the process of doing so it also generated a good deal of supportive volume to the downside. Initially the market opened slightly lower this morning. As the market moved lower it began to produce an increasing amount of supportive volume to the downside by 13:15. However, the market continued its decline and as a result, the market produced an even larger supportive VMA spike to the downside at 14:15 and 14:50 . By 15:45 the market resumed its decline, catalyzing the production of an even larger supportive VMA spike to the downside, which came to a peak by the end of the day. The market closed at or near its lows for the day. |
| Buy Call
#2 08/05/2004 Was left opened in previous "Best Trade" |
During the market's decline it produced of a larger supportive VMA spike to the downside, which came to a peak at approximately 12:15. As the market continued in a sideways trend it generated a substantially large supportive VMA spike to the downside at about 15:00 and 15:45. |
| Sell
Calls #1,2 08/13/2004 |
During the a modest end-of-day rally the market generated resistive volume to the upside. We anticipate that these irregular trading patterns will continue until the market produces a very large and well-defined supportive VMA spike to the downside. |
These are the trades which netted the returns shown above:
|
Date |
Trade | Strike | Expiration | Contracts |
Contract Price |
Amount | Profit |
| 08/03/2004 | Buy Call #1 | $34 | September - QAVIH | 75 | $1.35 | -$10125 | |
| 08/13/2004 | Sell Call #1 | $34 | September - QAVIH | 75 | $0.5 | +$3750 | -62.96% |
| 08/05/2004 | Buy Call #2 | $34 | September - QAVIH | 100 | $1 | -$10000 | |
| 08/13/2004 | Sell Call #2 | $34 | September - QAVIH | 100 | $0.5 | +$5000 | -50.00% |
To see any of our past best trades, simply select from the list below.
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