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Strategies & Market Trends : Ask Vendit Off-Topic Questions -- Ignore unavailable to you. Want to Upgrade?

To: Gush who wrote (4133)	1/22/2005 2:49:52 AM
From: Walkingshadow	Respond to of 8752

<< Would it be safe to say that if the qqqq can't break through $40 we are bearish? >> We are bearish now. QQQQ already failed to break $40 in December, and that started the current correction. I thought there would be one last half-hearted attempt to rally towards $40 that would fall quite a bit short, but that really didn't materialize. The next time QQQQ sees $40, the medium-term correction will be over, and we will be back in the long-term uptrend IMHO. I anticipate that will most likely be at least a month from now, probably longer. << Now if April hit $40 instead of stopping at $37.00, would that be a head and shoulders (bullish) in July? >> I am trying to visualize what you mean. I think you mean if QQQQ had rallied to $40, been turned away, formed the bottom in August, then rallied back up to $40 at the end of the year. If I understand you correctly, I can't see how that would make any difference. QQQQ remains in a long-term uptrend, but is in the midst of a medium-term correction that should bode well for the long term. A head-and-shoulders pattern is a topping pattern that is bearish. A break of the neckline on the right shoulder constitutes confirmation. An inverted head-and-shoulders is bullish. << Can someone explain the wick significance on candles? >> It depends on what the real body looks like, and where in the current trend the candle takes place, and also has to be interpreted in the context of support/resistance levels. But a rough generalization is that wicks below candles are bullish because they indicate that when the stock traded down, it couldn't stay down because of buying pressure, so the session closed up. Conversely, a tall wick on the top of a candle generally indicates exactly the opposite. The length of a wick relative to the real body is also significant. << I have never had my options exercised when they were in the money.. Is that because I don't buy them on Margin? >> I am not sure what you mean. Assuming you are buying and not selling contracts, you can exercise an option any time you like prior to expiration, regardless of whether it is in the money or not, regardless of how much profit or loss you might have. I don't know if this is absolutely required or not, but the brokers I have traded with all require a margin account as a prerequisite to trading options. I found Thomsett's book "Getting Started in Options" to be very good, and quite readable. McMillan's "Options as a Strategic Investment" is excellent also, but perhaps not the best choice for a first options book. T