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"Best Trade" Newsletter (July 31, 2008)

This "best trade" is a continuation of previous "Best trade" newsletter posted (sent to MV subscribers) on July 29, 2008.

Security Return
Calls (QQQQ - QQQIS) +$1,280 +5%

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.

Below you will find a Table of Trade Motivations and a chart showing the trades, including detailed trade calculations.

Chart 1: NASDAQ 100 60-day Chart
 

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
July 8,
2008
Buy Calls

SBV oscillator started to advance and advanced above minus 33% after being below this level based on the 60-day SBV(20) chart. This reveals that there is a chance for an up-move.

Very solid buying volume accumulation, huge buying volume surges and absence of the selling volume point to the higher odds of a recovery as well.

July 29,
2008
Buy Calls SBV oscillator started to advance and advanced above minus 33% after being below this level based on the 60-day SBV(20) chart. This reveals that there is a chance for an up-move.

Another important fact is that advancing SBV oscillators combined with huge buying volume accumulation over the last 2 months and the absence of the selling volume make us assume that we may see further development of the mid-term up-trend.
July 31,
2008
Sell Calls SBV oscillator started to decline based on the 60-day SBV(20) chart. This reveals that there is a chance for a correction down.

SBV oscillator declined below 20% after being above this level based on the 15-day SBV(16) chart. This reveals that there is a chance for an up-move.

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
Amount

07/08/2008

Buy QQQIS Calls $45 Sept, 2008 50 $2.44 -$12,200

07/29/2008

Buy QQQIS Calls $45 Sept, 2008 80 $1.76 -$14,080

07/31/2008

Buy QQQIS Calls $45 Sept, 2008 130 $2.12 +$27,560
Profit:    +$1,280
(+4.9%)

In this example, we have based our QQQQ options trade on the NASDAQ 100 volume indicators. Using the principles outlined above, you may wish to trade options on the 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 NASDAQ 100, 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 and 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.

 

2008
Date Indicator
September 16, 2008 QQQQ Options
September 11, 2008 QQQQ Options
September 9, 2008 QQQQ Options
July 31, 2008 QQQQ Options
July 29, 2008 QQQQ Options
July 8, 2008 QQQQ Options
March 19, 2008 SPY Options
March 17, 2008 SPY Options
February 26, 2008 QQQQ Options
February 22, 2008 QQQQ Options
January 25, 2008 QQQQ Options
January 23, 2008 QQQQ Options
January 16, 2008 QQQQ Options

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