JT-- Yesterday I was looking at composite and traded exclusively based on that 1500 was last support of composite we tested 12 shy of it, on SPZ we were stuck with this 972 again, I shorted the market at break of 993 bought 980's for 22 and sold 850 Nov for 17 but covered around 978 at 28 and took out the 850 for 19-- the reason I covered was that I could see the 972 support holding well , I thought if this breaks 972 I will like to establish a new position in addtion to 950 920 spread-- I am looking at the market and surprised to see its resliance, I will like to see this 1570 to be now taken out for a run to 1030 area if we fail this a break of 1528 on composite will lead us to 1500 or 960 on SPZ- if we break 1500 on two closing basis my 850 support will be in play but a nimble trader can really take advantage of present situation--- I will like to see BKX take out this resistance, it is finanacials which can bring some nrmalcy to this market volatlity, you need to keep an eye on composite and BKX to find direction of this market-- SOX offers attractive 220 calls for Nov- I will not even mind selling 160 puts to just rack in the premiums-- for me MSFT and CSCO at 98 48 were too good a target I bought heavily in these two stocks before the market reversed solidly-- I think if market reamins below 1000 today it will be first technical break of 1000 and would certainly point to your one more dip projection if it does not we may have to neglect yesterday as another test of lows- atlest this is how the pits are dismissing yesterday's action- I will maintain my trade on a break of 1528 on composite to buy some puts and will get out if 1545 is taken out one neeeds to be ninmble here, I have since yesterday pointed out that this market has strong ability to bounce of strong sells and that is the fourth time we have seen a bounce of 7400-7500 area or 945-970 area..
I think we may see market moving and testing 1018 very soon, the sure winning trades of long bond and short Japnese futures would neeed to be squared before earning season commences, the drop of yield in bonds will result in market moving upto 1030 in no time...so would be the break of 1528 area on composite on down side the market will test 960 and if it breaks it will break the old lows and set a new target on the down side, put spread with a generous 100 point difference is the way I am trading now, I will not sell calls and buy puts at these lows rather a put spread with a claender spread if a veryt effective tool in specific situations like this- long the Oct 945-950\s on break of 1528 short the Nov 850--- cover the spread on 1500 or 1496 of composite expecting a reversal that is how I will play on down side- on the up my strategy would be to buy long calls on SOx this is the seventh time I am going to trade SOX from 192 area to go and test 220 by Oct 30--MSFT ASND CSCO remain quite attractive at these levels for a good trade up--- we did see a lot of improvement yesterday hope that continues today-- a close above 1012 will lead me to think that 994 close of yesterday was a test of 992-1000 support and therefore a false break but I will not like a second close below 994 area as this will certainly lead to 1500 on composite and it will be the composite at 1500 that will decide the Oct lows diresction or we move back up to 1080 area -- DAX CAC are compelling buys at these levels as is Dec 124-126 puts on bonds.. |
