<<OK, I am new so I have to ask, are you talking about options????>>
Yes options only, I don't buy stocks, I have a core portfolio and I work around it, my core portfolio is dominated by NDX kind of stocks and I have been a strong proponent of sector distribution, I was in NDX when others were looking to short SPX at 850 where NDX was hitting a two year low and was about to reverse.
I also look for opportunity like EBAY or EGRP although I do get a raw deal when I end up owning some at higher price on the way down but picking a bottom always help like DOT.X 550 for me was hell of a buy when this stock and the index had a hair cut of 38%.
I will establish interim points and solid suports or resitances, I will trade in between them. When DOT broke 775 Is sold 850 calls on DOT, on 725 break I sold 820 calls, I shorted the DOT on the way down without removing my long calls and again shorted it below 675, 625 and reversed at 550, I made excellent returns on hte way down and picked up a bottom with 10 points of lows to reverse my position.
I have all these posts here in real time and this works wonders for my account. I look at BKX and I have been pounding the table to go long on AXP JPM C MER and pointing out key points of BKX index. Like I saw the index trading down to 850 made a call to go long identified 902 as major resistance and than established a long position from lows to 902 and 902 to 934 now, the returns has been phenomenol, I was looking at RUT 388 as my support and 402 my interim level of breakout, once we got this breakout I promised 435 as the top where if it breaks can move up to 470. 'Idea' has this uncanny ability to identify an index which will move in a falling market, I am not restriced to DOW as I don't consider it to be any more a barometer of the market sentiment, rather I will concentrate on SPM the most speculative index and has this key support a 1355, where I will be looking to go short the index, for me 1292 on SPm with 550 on DOT and 1890 on NDx a classic reversal I hinted these levels as correction levels well two weeksd in advance and as I saw the indexes there last Monday had no problem in issuing a long call. It is kind of unique experience it works and I proudly display my successes although failures are kind of underplayed but on directional moves rarely I have been wrong, on inidividual stocks I have some duds but most of the itme my stocks like EMC MSFT IBM GE LU NOK MER C from lows have performed oustandingly.
Option as you well aware is about leverage, I will never take the risk to buy 5000 shares of Ebay at 140$ when we had this recent move to 550 on DOT but I would certainly have the guts to pick 160 May calls for far less, the risk is high 50 calls would for me entail a huge expense but bounce from the bottom is equally rewarding -getting out of these calls at 58 yesterday was nothing but share fun, like wise 725 resistance once identified is a place where I off loaded a lot of my Mays rather 85% of internet exposure was out as I saw DOT at unchanges at 715, for me I am cautious to take the profit off the table.
I think we have seen this 540 to 731 move we can see a retest of 725 but I would like some work on this resistance a retracement to 650 will be good and rather 620 would be a good point to enter. People like me off loaded and so did others,I wrote yesterday that hedge funds would hit the 725 hard and we saw that selling in leaders, but don't get trapped in this vicious cycle, wait for decisive break above 725. It would take some time to take out this 725 so for me I will wait for a double close above 725 to think of reestablishing some positions although I will at 195 on EBAY or test of 675 establish some very selective positions. Like AOL at 145$ and AMZN or Yhoo at 10% lower.
I will look at BKX SOX RUT as kind of future indicators for the market and I will keep refering to these levels, luckily if you go to search and press 1980 or 1292 or 902 it will be most probably an Idea post which will show these interconnections in synchronised pattern.
I keep beating this as I want to let every one know that Idea does what no one else does and it will always help to understand the markets from a perspective that is neutral, I come and open my shop every day I close it with atleast 8 out of 10- trades in my favor to be honest it 9.8 out of 10 but I don't want to hurt sensitivities, the fact remains it is about market sentiment and I know it from these global levels and US market indicators that the only way to work in these markets is to be market shark know what the pits are doing.
I keep it very simple I have no paid service I don't go into these 'exotic stuff' that is all non-sense and I challenge it never works keep it simple, the gurus who inevitably read my post and unashamedly follow me without giving credit to me are hit with these confusing signals of buying puts at key supports like 550 or 1292 or 1980 on NDX, now these are pathetic characters do this all the time expecting market to come to them, I really don't care but what I feel bad that opportunity lost is the whole loss, this is what we are here every day we cannot kep losing oportunities and pretend this is a great win. How can you be on two sides of market when most of your posts are loooking for that break which has come for few days and disappeared. In a long trending market from 4000 to 10800 some of these characters are waiting for that big break to 4000. The market has been trending higher and in a low interest environment it does terst the 50 days even 200 days in Oct but picking the market at dips is the name of the game. Wait but never loose an opportunity when it comes on a plate like breaout of 2504 where it was shorted or DOT 550 again shorted. yes market comes off but breakouts never short them it is just not trading it is biggest crime a trader does to short a 'market making news highs'.
That we see every day we learnt our trading in the market we have taken on people like Kurlack and Accompora's and taken them to cleaners, I have traded almost opposite to their calls most of the time, naturally for me to see that market short without any reason is flagged right under out nose is painful. I write so that people may learn and go to the old posts of these guys to know how pathetic their performance has been, when was the last time they were ever long willingly, never laways biased is a big fall reluctance and market moved on to big huge gains, although within 15% to 10% these levels the largest gains will be on short side but the art is to ride to the last 5% and leave the party for the 'blow out phase' it can be any day or any month no one can call it but my levels will give me thatm uch early warning.. That is what I plan to do I am getting more and more cash and only trading outside the monies, my cash level has gone up to 60% of my liquid trading account but leverage I am creating is great and I don't miss the whole exposure with little on table I do have lot at staoke like 940 BKX calls by selling 890 BKX puts are effective play which I highlighted last month with little I have lot to win, rahter if I remember correctly it was no cost trade. The prem on the put side had paid more than adequately for prem on the long side. I will not hesitate to take my loss and sell out if 902 is taken out on two cloisng basis.
Short the darn thing below PM1292 double close but you can trade to 1292 if 1368 is taken out cover at 1355 if that gives up cover at 1328 if that does not hold 1322 or 1318 or 1302 al these levels will be hit but to say buy puts at these levels is prescription to death. We can trade short below 2504 for a dip to 2300 or below 675 to 625 on DOT but to short because you feel like doing it is foolish, you just don't do that and anyone who professes this technique is intentional 'pain buyer'. On short side SPm is the best thing one can buy one or two puts and have this insurance, I will if 1362 today is taken out or 918 on BKX otherwise let the party run on DOT I have to see a retest of 725 a close above it and than I will decide on individual stocks i will trade EBAY at lows with June's 250's if 705 is taken out on the up. EGRP or AOL 160's if 715 is taken out, I will exit if 725 is tested and we fail.. This is simple I can afford to run the leaders a little more even if DOT fails at 675 before testing 650 or 725 on the up, however if we see a test of 650 before 725 time to go long with 1/3 rd of your risk trading capital.
I look at it purely from earnings point of view and I know it is always buy the rumor sell the news with EBAY going to hit 300 207 may look nice but I would rather wait for my index to give me that break.
I saw some PM's to me where most unfortunately 2504 on composite was being shorted or a breakout of RUT at 435 was being ignored or BKX. My yesterday call 'look at BKX 902' if that breaks and we see DOT not holding 725 short the Mays', now why did I do that why I had this right in middle of nowhere an idea to short 'if 902 breaks', I said in my post logic later.
You will see that DOT and BKX are behaving in opposite direction, if buying comes in DOT, BKX is at loss as money flows out but if BKX is bid DOT weakens, now my yesterday call was based on this simple anlogy if BKX and DOT are not holding supports short the market, you saw that BKX broke thru 930 after checking that 907 area, now this is a clear indication that market is overall bid, DOT went thru profit taking but money found refuge in BKX, now anyone who happens to ignore this simple relationship has no bussiness calling the market.
I am sure puts purchased yesterday looking at NDX alone would look an attractive proposition but SPM reacted to BKX and so did DOW, by the way JPM has one of the lowest price to book, it is these fine-points which leads me to market direction, for me it is an art and one should learn it.
It is simple and very interesting. I try to dispense it here at 'Idea', I try to keep my thread very broad, I have this special liking for macro economic analysis I have this interest to make this thread the best and so far looking back checking the levels on search I find no one else does it with the precision I do it here, 1980 1292 550 725 625 where ever these critical levels are Idea would have raised them much earlier and inter-relate them to market trades. That gives me immense satisfaction. ( go to search print any of these levels and tick full subject)
This is what we do and I trade market from 6000 miles I know about 'Chicago locals' like no one else does even in 'Chicago' city gg and that is what I take great satisfaction in.. The thread is 'written history of this great market' for last two years as I close in on 2nd successful year of my operation by 30th April 99, I thank everyone who has supported me and all those who read me regularly.
I buy options out of monies and replace them all the time with out of monies once the first batch becomes deep in the money. I post these magic levels and I call them as such as I see them and no one else does this on interrelated exits and enteries on entire SI. I was long OSX when people were shorting it as 47, I identified BKX and highlighted that index from many a dips to many a tops I keep working on to better my model, I am sometime a bit early but that is due to this macro economic read I know that BKX will do well as profits would be great, look at my WFC call a phenomenol call at bottom and look where it closed yesterday.
' Bottom line' I write it all and love to go back to highlight that 'this works', others would not even be able to reproduce after five minutes. I know for myself only 'I am creating something' which can be back-tested and it gives me a lot of discipline of-course trading at a distance from hinterland in Pakistan is unique phnenomenon a story book like feature it all adds up so far the crowd thins or increases that hardly matters the party goes on, when volatility is high and when people need to know facts the read my words of wisdom ggg. They dismiss or benefit from it that hardly matters, I know my story has nothing to refute it all adds up it all leads to pin drop silence.. \I cherish that...silence.. I know I have to be a little faster a shade better and that i\ promise will remain the hall mark of this thread.. the bar keeps rising so is my desire to write fwiw stratling interconnections of the marekt like I enjoyed my BKX trade and hte logic Ihad to porpose that yesterday.....
writing from somewhere in hinterland... 6.2 km from my destination.. will be taking the journey back home in the late evening may miss the session today but any way I have highlighted the main stuff, BKX to hold 918 and DOT 675 or break of 725 for journney up a break from 725 a journey down to 625 area.. |
