Mid-Term Trade (January 29, 2006)
continuation of the previous best trade 01/20/2006

Chart 1:	Last "Best Trade" newsletter, where we left a QQQQ call position open. January, 2006.

Answer:

Please keep in mind that our newsletter is intended for educational purposes only – We do not mean to imply that you should follow our exact trades, but rather we wish to suggest that you may make use of our analytics to develop your own trading style. (read our disclaimer)

Depending on the market, different trading strategies may be used to close the options trade that was opened on January 20, 2006…..

Trading Strategy #1: For conservative trading: The trade could be closed now when the purchased options cost $1.85 (was bought a $1.40) and the investor could take 32% profit. If you read our 2005 report of critical reversal points you will see that only 4 occurrences of critically low sentiment reading were noted in 2005. By making only 4 conservative trades per year and fixing 30% profit on each trade a conservative trader could potentially make more then 100% on QQQQ options in a year with a minimum risk.

Trading Strategy #2: For more aggressive trading: The simple strategy may be to close a trade when on S&P 500 15-day chart the slow (40) moving average overcrosses the fast (20) moving average, indicating the possible change in the short term trend. Depending on the risk tolerance the value of the slow moving average may be increased (more aggressive) or decrease (more conservative).

Trading Strategy #3: The most aggressive strategy: Wait for a selling volume surge that could be compared to the buying volume surge when the trade was initiated or wait for positive sentiment reading - when S&P 500 A/D volume and issues ratios reached at least 5.

Notes:

Since the S&P 500 based indicators the best describe market mood in whole they could be used to trade any stock that moves abroad with market.

Important: The analysis results presented in the "Best Trade" may differ from the outlook presented in the daily Market Commentaries. Results may also differ from the trading signals generated for Exchange Traded Funds (ETFs), or from any other research and analysis efforts shared with our members. These are products developed by independent research teams, delivered to MarketVolume® members. While sharing some research results, these autonomous research teams may use different systems and may have dissimilar market outlooks.