Chart of the Week:
S&P 500 Sept
18, 2002

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One of our mid-term options traders has made some anticipatory traces over the past couple of weeks, and since he has not close his position as of yet, there are no returns to tell you about.

This week our professional trader has made several trades in anticipation of the continuation of the current uptrend. To date there is too much buying volume, and not enough selling volume for the NASDAQ 100 and S&P 500 indexes to say that the market has changed from it's general uptrend. What we are experiencing right now is simply a mid-term correction which has been caused by a moderate amount of volume to the upside which occurred this week. We still expect the market to continue on an uptrend once more, but before it does it will probably retest it's local support level in order to generate more buying volume. If the market does retest the local support level it would be an excellent point for our professional trader to purchase more options.

Our mid-term options trader based his purchasing decisions over the past couple of weeks simply on the fact that we believe the market is still in a general uptrend, and that it is only now in a mid-term correction. Due to this, it was a good time for him to buy calls at dips in the market where a moderate amount of buying volume appeared.

Why are there no detailed trade and motivation tables this week?
This week we decided to show what our options trader did before he closed his positions, and since there is no closure on these trades, we do not have, as of yet, any data to present in regards to the details of the individual trades.

Why didn't you buy any Puts?
Although there were some volume signals that pointed towards short-term downtrends, we found that it was better to keep current call positions open since there was not yet enough volume to move the market much lower at those points. Also, MarketVolume's Market Outlook signaled that the market would continue to decline.

Why buy expensive December Calls?
Even though December Call options are more expensive, they tend of to be less volatile in reaction to market swings, and they don't devalue as quickly as a current month option. By trading options that are at least one month ahead, we protect ourselves from unforeseen short-term fluctuations in the market. Also, if the uptrend continues on a long-term, one can hold these options for a longer period as they increase substantially in value.

The same principles mentioned above works for trading NASDAQ 100, S&P 100, Dow Jones, and other indexes.

To see more details about the motivations behind the above trades and trade details, sign up for a Free Trial today (no credit card information will be collected) by clicking on the following link:

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Date Indicator
December 30, 2002 NASDAQ 100
December 19, 2002 S&P 500 (SPX)
December 10, 2002 NASDAQ 100 Index
November 27, 2002 NASDAQ 100
November 20, 2002 NASDAQ 100 (NDX)
November 13, 2002 NASDAQ 100
November 6, 2002 S&P 500 (SPX)
November 1, 2002 NDX
October 25, 2002 S&P 500 (SPX)
September 25, 2002 NASDAQ 100
September 18, 2002 SPX
September 6, 2002 S&P 500 (SPX)
August 21 2002 NASDAQ 100 (NDX)
August 14 2002 S&P 500 (SPX)
August 7, 2002 S&P 500 (SPX)
July 31, 2002 NDX
July 24, 2002 NASDAQ 100 (NDX)
July 17, 2002 NASDAQ 100 (QQQQ)
July 10, 2002 S&P 500 (SPX)
June 26, 2002 QQQQ
June 14, 2002 S&P 500
June 12, 2002 QQQQ
June 5, 2002 S&P 500 Trading
May 31, 2002 S&P 500
May 29, 2002 NASDAQ 100 (QQQQ)
May 22, 2002 QQQQ
May 17, 2002 S&P 500
May 15, 2002 QQQQ
May 8, 2002 S&P 500 (SPX)
May 3, 2002 NASDAQ 100
May 1, 2002 NASDAQ 100 (QQQQ)
April 28, 2002 NASDAQ 100 index
April 22, 20022 NASDAQ 100
April 3, 2002 S&P 500
February 25, 2002 S&P 500
February 8, 2002 NDX
January 30, 2002 NASDAQ 100

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