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A place for friends to gather and view stock market charts, discuss technical analysis and market outlook. What is your Principal Asset? How can it be developed? Each and all should do their own due dilligence and homework before investing. And by no means should you use anything I say or show here as a sole basis to buy or sell securities as everything is for educational experience only.

Saturday, September 20, 2008


ZION: 52.83 +7.61 (+16.83%) : ZIONS BANCORP - Yahoo! Finance
4:00pm 09/19/2008

Low: $38.76
High: $107.21
Change:+7.61 +16.83%
Avg Volume: 6.18M
Shares Out: 107.57M
P/E: 16.16

This is an awesome example of how volatile days should be traded:

What if instead of anxiously/fevorishly trying to sell your calls on the Open spike you instead place Buy on Open Puts WAAAAAAYYYYYYYY Out of the money at "key" strike levels. For example: What price would a market PUT order to trigger at $105 strike been filled at the Open versus trying to clumsily pick a limit order to set in order to sell your calls? What about creating a Vertical Put Spread to trigger at certain levels?

No matter how you look at it the goal is to preserve the profits gained on your long held calls by the insane open. What difference does it make if you just get neutral with a corresponding PUT amount of contracts? Technically you would be even thus preserving the maximum profits of the gap open....

The issue is which order is easiest to make? The one you can place for practically nothing the night before or
  1. the stab in the dark limt order that may not get filled at your wish price
  2. or worse gets filled WAAAYYYYYY below the Open bid thus leaving major profits on the table
  3. or the catastrophic not get filled at all as the bid and profits quickly disapate

Bottom line:

Regardless of the Call profits that were made; how much do you think a $105 strike PUT +ZNQMD would be worth if it did get filled at $0.05? By my math around $52 or for 10 contracts or $52,000. Well the close for +ZNQMD on 9/19/08 was $86.20 or $86,200.

BUY 10 +ZNQMD if ZION >= $105 $0.05 09/19/08 $17.49 = ($67.49)
SELL 10 +ZNQMD MOC Market on close $86.20 09/19/08 $17.49 =$86,182.51
Profit $86,115.02

To me that makes selling those calls later in the day a WHOLE lot easier.......

Market outlook

Next week I expect the market to absorb the huge gap up by tediously fading back. If support is found at the shoulder lines it will lend more credence to charts across the board setting up for an inverse H&S pattern that could send things back up the year highs. The QQQQ's is looking like easy money if this turns out to be the case.

US GOVT inc. - Great trade with 80% stake in AIG

In arguably the greatest insider trading deal in history....the US Goverment takes control of AIG.

No wonder they would not let any more shorts.......

Checkout this excellent post on Friday:

I'll do another post later this weekend setting up for next week......

CNBC's take of the week.......

From Dylan Ratigan of CNBC

"An historic week on Wall Street mercifully comes to an end. Usually this column highlights next week’s most tradable events. And while investors will look to make money around Nike and RIMM earnings on Wednesday, and perhaps housing data on Thursday, the truth is these events, which normally would consume the collective interest of traders, will recede into an ever-changing backdrop that is the new financial landscape. The Government has changed the rules, nationalizing risk, and altering the natural balance between buyers and sellers in an effort to save the financial system. We are by no means out of the woods, and while the infusion of cash into the system will certainly assuage some investor concerns, no one should take this to mean the crisis is over. The capital markets have suffered an enormous trauma, and as with any injured body, the road to recovery will not be instantaneous. If you had been in a cave for the whole week, you might think nothing happened. After all, the Dow and S&P are virtually flat. But over that time, the financial landscape has been irrevocably altered. Lehman Brothers has failed; the Government’s bailout of AIG; Merrill’s merged with Bank of America. It has become a brave new world that will require even the most seasoned traders to take a step back before acting. But one thing is clear. An open market, even one where the rules seem to be changing on a daily basis, is a market in which you can make money. So let’s relax tomorrow, and come back next week and try to do just that. ."
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Thursday, September 18, 2008

The Govenrnment rumour Bounces the market....

Today the "rumour" abounded that the Government is putting together a bailout fund to cover both the Financial and home building/mortgage crisis at once. The only things that can be said from here is that tomorrow is expiration day, long equities and short Gold, and it is now the Fed's ball......

Wednesday, September 17, 2008

10 yr cups with handle

As the global financial structure is under seige and fear is high...could this be the time to BUY.....
The DOW is sporting a decade long Cup with handle formantion which is bouncing off a FIB line. It would be pretty easy to go long and place a tight stop just below the level.

Extreme caution going long here because if this pattern fails the bottom could be tested.....

Hmmmm the S&P looks exactly the same.....

However the laggard of the crowd the Nasdaq throws the brakes on a bit and adds that there could be a bit more downside first.

One interesting thing is the Slow stochastic line (the red line in the bottom of each graph) has yet to start turning or bottoming out. Seeing this in all three major indices tells me to be patient going long here and keep your Call and Long powder dry till an uptrend is confirmed.

Monday, September 15, 2008

Broken lines

Wow, if you are a trader you ar oving this environmnt. Otherwise, the whipsaws from tops of ranges to bottom of ranges could test one's fortitude.

It is noteworty that the S&P precisely touched the July lows and does appear to have more room to fall.

The VIX blew out the top of the downtrend and is definitely a barometer to keep a close eye on for a direction change.

Another way to will be GLD. Its just uncanny how GLD has bounced off the FIB extenision and retraced back to a fan line.

Also, the FXI or China index broke a long term trendline as the Chinese government lowered their rates today. I believe the bottom will be tested here before any sustainable bullish movements on the American side will hold.

The IKE, LEH, & AIG crash........

Welcome to reality...........I wanted to post charts of the culprits at hand on Friday's close so a before and after picture can be readily seen after the demise is complete.

The real key will definitely be the VIX.....How high will it go. Watch the fib lines for resistance.

Good luck and have a great week... Oh yeah, perhaps some theme music is fitting for the open....