Technical Analysis. |
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September 25st, 2004
This “best Short-term trade”
is a continuation of the
previous best trade,
where we left a QQQQ Put position open.
| Security | Return |
| Put #1 (QQQQ Nov. - QQQQWI) | -17.24% |
| Put #2 (QQQQ Nov. - QQQQWI) | 0.00% |
| Put #3 (QQQQ Nov. - QQQQWI) | +26.32% |
|
Total Profit: |
+$1,250 |
|
NASDAQ 100 Indicator S&P 500 Advance minus
Decline Volume |
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 09/09/2004 Was left opened in previous "Best Trade" |
12:30 - 14:15: As the market moved higher, it generated a very large resistive VMA spike to the upside shortly after 13:30. |
| Buy Put #2 09/10/2004 Was left opened in previous "Best Trade" |
14:00 - 16:00: The ensuing late-day rally generated a large amount of resistive volume to the upside. |
| Buy Put #3 09/17/2004 Was left opened in previous "Best Trade" |
Because we are not convinced that the market has fully compensated for all of last week’s (and to a lesser extent, this week’s) output of resistive volume, we see the possibility of a move lower in the short-term (i.e., over the coming week). In addition, we point to the large output of resistive volume at the end of the day. |
| Sell Put #1, 2,
3 09/24/2004 |
11:30 - 12:30 As the market moved down it generated the largest supportive VMA spike of the day |
These are the trades which netted the returns shown above:
Date |
Trade | Strike | Expiration | Contracts |
Contract Price |
Amount | Profit |
| 09/09/2004 | Buy Put #1 | $35 | Nov. - QQQQWI | 75 | $1.45 | -$10875 | |
| 09/24/2004 | Sell Put #1 | $35 | Nov. - QQQQWI | 75 | $1.2 | +$9000 | -$1,875 |
| 09/10/2004 | Buy Put #2 | $35 | Nov. - QQQQWI | 100 | $1.2 | -$12000 | |
| 09/24/2004 | Sell Put #2 | $35 | Nov. - QQQQWI | 100 | $1.2 | +$12000 | $0 |
| 09/17/2004 | Buy Put #3 | $35 | Nov. - QQQQWI | 125 | $0.95 | -$11875 | |
| 09/24/2004 | Sell Put #3 | $35 | Nov. - QQQQWI | 125 | $1.2 | +$15000 | +$3,125 |
|
Total: |
1,250 (3.6%) |
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Disclaimer: We discuss our “best trades” here mainly for educational purposes. 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.
To see any of our past best trades, simply select from the list below.
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