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Best Trade Newsletters
"Best
Trade" Newsletter (November 28, 2006)
For this "Best trade",
"Buy Calls" trade is opened
in order to close them later with profit if the
index moves in our favor.
We expect to close "Buy Calls" trade once the SBV Oscillator
advances above plus 33% and then declines back to below that level (based on
NASDAQ 100 15-day SBV Oscillator chart with 240-min VMA). We will most likely
buy puts at the same moment.
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
November, 2006.
15-day View, 240-min VMA. |
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Chart 2: |
NASDAQ 100
Advance/Decline
Volume Ratio
November, 2006.
15-day View, 240-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
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Date |
Trading
Decision |
Motivation |
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11/27/06 |
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High-magnitude
buying surges
were noted in all market sectors.
The NASDAQ 100 (1/10) PVO was 7%,
indicating that the volume seen on this day exceeded the average volume over the
previous 10 trading days by 7%. The (1/10) PVO the
the S&P 500 was 13%.
The (1/10) PVO the Dow Jones Industrial was 13%. |
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11/27/06 |
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On November 27, 2006 the NASDAQ 100 Advance/Decline
(A/D) issues and A/D volume ratios reached extremely bearish levels of 0.08
and 0.02, respectively. Last time the NASDAQ 100 index reached similarly
critically low sentiment readings on September 6, 2006. This revealed an
extremely bearish market sentiment, indicating the market is oversold and thus
prone to trend reversals. |
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11/28/06 |
Buy Calls |
SBV oscillator dropped below minus 33% and
advanced above that
level back on November 28, 2006 (see NASDAQ 100 15-day SBV chart with 240-min
VMA). This reveals that there is a chance of a short-term move up and we bought
calls options. We left "Buy
Calls" trade opened in order to close it later if the index moves in our
favor.
We expect to close "Buy Calls" trade once the SBV Oscillator
advances above plus 33% and then declines back to below that level (based on
NASDAQ 100 15-day SBV Oscillator chart with 240-min VMA).
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Below we list in detail the actual trades made,
along with the netted returns achieved.
Table 2: Details of the trades
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Date |
Trade |
Strike |
Expiration |
Contracts |
Contract
Price |
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11/28/2006 |
Buy QQQAQ Calls |
$43 |
Jan., 2007 |
70 |
$1.65 |
In this example, we have based our QQQQ options trades on
NASDAQ 100 volume indicators (PVO, SBV Oscillator). Using the principles outlined
above,
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.
©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) |
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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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