QQQQ Retracement

Q's are at the 61% retracement level from the recent high. We'll see if we can get pas that, and push on.

End of the world not so close?

If the Q's can hold this level, and continue higher, we might be in for a good ride back up. Thinking of adding to my long position. I, however, remain cautious, but cautiously optimistic.

Support?

It appears that the Q's are holding support at the 61% level. This level is also indicative of a higher low on the daily chart, leaving the uptrend intact. Some good rallies this morning, let's see if this can hold up. Financials, however, are looking worse for the weather.

Looking for some buyers

I'm looking for buyers to return to the market, but earnings reports among other things has them spooked. As a result the market has taken a turn from its highs, and broken through some important levels, but as long as it doesn't make a lower high, it should be okay.

I am still holding my long position. I got caught in a gap lower, and did not want to liquidate. I have held on hoping things would turn around. So far, no go. However, if the Q's can hold above 28.80ish and make a turn higher, we might have a continuation of an uptrend on the daily time frame. From there I will look into expanding my long position.

QQQQ (Daily Chart)

There is a trend on the 30 minute time frame, but weakness in the short term. Sellers are in control. Looking to establish a higher low to continue the trend.

QQQQ (1 Minute Time Frame)

Trading range narrowing. Looking for a breakout? We'll see where and with what kind of volume.

Market Open

The Nasdaq 100 is opening with a gap higher near yesterday's highs. If it can maintain strength early on, the Q's have a good chance to make some more gains during the day.

I am still watching some small cap stocks waiting for some breakouts.

I am also still long calls on the QQQQ and ALD.

Trading 2009

2008 was a brutal bear market, with volatility up the sky; the DOW traded its largest daily swings ever. Lehman Brother's collapsed, yet other major banks found bailouts. The list goes on.

Here on the first trading day of 2009, the NASDAQ 100 traded up very nicely. Looking at the daily chart, we see that not only did the Q's break above prior resistance at 30.50 (the 61% retracement point from the November highs), but it closed above the 10,20,50 SMA. We also have convergence of these averages, which is important. This indicates the end of the market decline and the beggining of accumulation, the long process of healing. This type of market is subject to a long period of sideways movement; very much a range bound market. Also we have our first "long" signal from the DMI indicator. The crossing of the of the DM+ and DM-, as well as the ADX above 20 (though it is declining). I am not acting on this long signal, but it is the first real signal since August/September '08.

These are some promising signs that the world is not over and we will live to trade another day.

I started the trading year by closing out and posting profits from my short position I took on Citi. The stock has taken a beating, but has found good support. Come next week, I will most likely open another short put and let theta decay away.

Also, I have several stocks on my watch list that have also taken a beating, but have good potential for a fast rally this month. If these can show strength and break out, I'll take some small long positions with out/at the money calls.

2009 is all about managing risk and using what the market hands me to my advantage.

Frustrated

I am frustrated with myself, I let my emotions trade. I felt weary about a possible bounce on JPM, so next market morning, I decided to take my 60% profit. Only to watch JPM continue to plummet, and watch what could have been a 300% profit walk away from me.

My frustrations continued to mount, as I was stopped out of a play on the Q's. I took losses on that, but ended the day with a 30% gain. I have never had such a frustrating day of gains before. Next week is a holiday week, so I am going to try and ignore the world and relax.

Set to Open Lower

Things appear bearish. The SPY is seeing some pre-market volume to the downside.

The Q's are gaping lowers.

JPM is gaping lower.

I expect this trend to continue, but I am ready to snap up profits on my JPM puts if buyers decide to show up. (I am long OTM Dec Puts).

There seems to be nothing out there to stimulate the economy, certainly not the government, and economic news continues to slowly become more pessimistic, pirates certainly don't help matters. Hang on, because it's going to be another choppy day.

Downward Momentum? Just Down

The NASDAQ is gaping down this morning (is anyone surprised after Friday's sell off?). It looks as if it is going to test the lows again. I don't know if it will find support or find anyone to rally it this time.

I am going to wait to jump into the market--wait and see approach. Watch price action and see what it tells me for the week. I'll start posting some of the setups I find, and more details of which options I am trading and why.

Taking Profits

After the gaping down, the NASDAQ made a slow pattern of lower highs and lower lows, bottomed and began to make a nice rally, once that rally started to fail in the last hour of trading, I closed out my long position for a 30% gain and called it a week.

My original plan was to buy out of the money, with just enough delta to see some movement on large swings, like we've been seeing. It was not as effective as I had hopped. I am going to modify, by moving in towards the money, and closer to expiration.

Hopefully the increased delta, and decreased time value will even out, and make larger returns on short term movements.

Broken Support

The Q's continue to break all prior support and are looking to test some lower lows at the 28.90 stage. No good news out there to contradict otherwise. Charts look bad on all time frames.

I opened a small long put on the Q's at the money.

Gapping Down

The Q's are gapping down today, after yesterday's gap up (and subsequent sell off). There is generally no good news out there. Earnings are looking bleak for several companies, bailouts around the world don't seem to inspire confidence, except in Germany. The primary trend is still down.

I had mixed signals over multiple time frames yesterday, so I remained out of the market. I am going to wait it out, and see if the Q's will test support from their prior 52 week lows. An important level to watch--if it holds, we will eventually be in for another tradeable rally to the upside. If it fails, another wave of sellers will emerge and things will slide, making for a good short position. I am going to stay disciplined and watch for the signals from the market, and trade them as they hold up.

CPSL also has earning today. They seem to remain in a good financial position. I'd like to see more movement to the upside with them. My covered calls are set to expire this month, and will continue to write them until I get assigned.

Taking Profits

My position made a 50% return, so I closed out my position.

Total time in market: 4 hours and 15 minutes.

It was possible to see this one run more, but support looked like it was forming at 31.10. Since I was trading the front month, I wanted to keep the trade short. Had I traded Dec or Jan's I probably would have let them test and try and break below on another trend.

Better Than Expected

The markets did better than expected: indicies are making mild gains. The Q's broke yesterday's resistance of 33 and has maintained some solid ground.

I decided to exit my long spread on the Q's and take my profit. I entered at 29, and sold at 33.20 on my 29/34 call spread. I could have squeezed out a little more profit by selling off most of my position and leave a small position open, but I resisted and took my gains, not trusting the last hour of the markets, especially today.

Good luck.

Halloween Pullback

Asian markets held steady for most of the trading day, but sold off in droves at the end of the day despite a rate cut by the BoJ. European markets are down slightly, but not off kilter--still watching for last hour sellers.

US futures are down. The NASDAQ futures are down just over 2%. Subsequently, the Q's are going to gap down this morning. We'll probably see some channeling, and some downward pressure.

I am optimistic though, the markets will retrace down, test prior support, and head back up to try and break the resistance that has seemed to form right around 33. If we can break that I'd be happy. I am going to stay long for now, no major news to think otherwise, and market sentiment is slowly shifting.

LIBOR and Futures

The London Intra Bank Overnight Rate has dropped below 1%. The credit markets are indeed starting to thaw. The Fed cut rates and European and Asian indicies are up. Futures are up.

High Options volume for yesterday was the QQQQ Nov 34 Call.

It appears as sentiment is changing. There are still sellers in the market, don't doubt it; but, there are signs of mild improvement.

I am still long a spread on the Q's with my original target rate of 34. I'd like to see that target hit by weeks end, but am prepared to wait it out.

Q's

The markets rallied the last two days, and with the announcement of the Fed rate cut, they jumped sharply only to be met with vicious selling.

Perhaps we'll see more selling, but I am looking for a continued move downward, and eventually a track back up.

We're still working on purging the last of the sellers from the market.

Bounce

There is a chance for a bounce, but I wouldn't expect anything dramatic. Possibly a mild retracement from the waves selling. To try and catch this, I opened a Call spread on the Q's. We'll see if anything will materialize from this in the next 60 days.

Just remember, falling down the stairs happens faster than the actual climb.