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Best Trade Newsletters
"Best
Trade" Newsletter (September 6, 2006)
In the following example, we have based our QQQQ options trades on
NASDAQ 100 volume indicators (PVO, SBV Oscillator) and advance / decline indicators
(A/D volume and issues ratios). Using the principles outlined below,
you may wish to trade options on the SPDRs (SPY), ^SPX, DIAMONDS (DIA). It is also conceivable that an analysis similar to the one
shown below could be used to trade options based on the
S&P 500, Russell
2000, and other indexes.
For this "Best trade",
"Buy Calls" trade is opened
in order to close them later with profit if the
index moves in our favor.
Below you will find a Table of Trade Motivations and a chart showing the trades,
including detailed trade calculations.
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Chart 1: |
NASDAQ 100 SBV Oscillator
September, 2006.
15-day View, 240-min VMA. |
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Chart 2: |
NASDAQ 100 Advance/Decline
Volume Ratio.
September, 2006.
15-day View, 60-min VMA. |
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In Table 1 - a 'Table of Trade Motivators'
- we show the motivating factors that led us to take the above trades.
Table 1: Table of Trade Motivators
|
Date |
Trading
Decision |
Motivation |
|
09/06/06 |
Buy Calls |
High-magnitude buying surges
were noted in all market sectors. The
NASDAQ 100 (1/10) PVO was 18.3%,
indicating that the volume seen on this day exceeded the average volume over the
previous 10 trading days by 18.3%. The (1/10) PVO for S&P 500 was 17%, for the
Dow Jones Industrials it was - 16%. The biggest volume surge was noted in Amex
Oil and Transport market sectors. The Amex Oil Index (1/10) PVO was 54.9%,
the DJT index (1/10) PVO was 44.1%
On September 6, 2006 we
noted extremely low market sentiment readings. The NASDAQ 100 advance/decline (A/D) issues
ratio reached critical levels of 0.05 at the market open and advance/decline (A/D)
volume ratio reached critical levels of 0.07 around noon. This
revealed an extremely bearish market sentiment, indicating the market
was oversold and thus prone to trend reversals.
The NASDAQ 100 SBV Oscillator dropped below minus 33% and rallied to about that
level back on September 6, 2006 (see NASDAQ 100 15-day SBV chart
with 240-min VMA). This reveals that there is a big chance of a trend
reversal.
We left "Buy
Calls" trade opened in order to close it later if the index moves in our
favor. |
Below we list in detail the actual trades made,
along with the netted returns achieved.
Table 2: Details of the trades
|
Date |
Trade |
Strike |
Expiration |
Contracts |
Contract
Price |
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09/06/2006 |
Buy QQQLM Calls |
$39 |
Dec. 2006 |
70 |
$1.60 |
©HGH Associated Traders
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.
| Disclaimer: This newsletter is intended
for educational purposes only – it does not constitute trading advice,
nor does it make or imply any market trend predictions. This newsletter illustrates
examples based
principally on MarketVolume® index volume indicators and advance/decline (AD)
indicators. We do not mean to imply that you should follow
our exact trades, but rather wish to suggest that you may make use of our
analytics to develop your own trading style. |
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2006 (first part) |
|
Date |
Indicator |
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June 28, 2006 |
QQQQ Options |
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June 15, 2006 |
QQQQ Options Trading |
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June 15, 2006 |
Options Trading |
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May 17, 2006 |
Trading QQQQ Options |
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May 12, 2006 |
Trading Options |
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May 11, 2006 |
QQQQ |
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May 8, 2006 |
QQQQ Trading |
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April 27, 2006 |
Trading QQQQ |
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April 26 2006 |
QQQQ Options |
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April 18, 2006 |
Trading QQQQ Options |
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April 17 2006 |
QQQQ Trading |
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March 29, 2006 |
QQQQ Options |
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March 28 2006 |
Options Trading |
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March 14, 2006 |
QQQQ |
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March 10 2006 |
QQQQ Options Trading |
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March 8, 2006 |
Trading QQQQ Options |
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March 3, 2006 |
QQQQ Options |
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February 28, 2006 |
QQQQ Trading |
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February 8, 2006 |
Options Trading |
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February 2, 2006 |
QQQQ Options |
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January 31, 2006 |
QQQQ |
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January 29, 2006 |
QQQQ Options |
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January 20, 2006 |
QQQQ Options Trading |
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January 13, 2006 |
QQQQ Options |
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