Where the Stock Market Is Today
Do What the Market is Doing
The Stock Market moves in a price path of uptrend and downtrend which are governed by complex dynamics of news, economic growth reports, manipulation, fear and greed. When the uptrend has won, the market will continue being bullish until cumulative market dynamics are provided in sufficient quantity for the supply and demand to go past the equilibrium line, otherwise the market will continue with the uptrend. The opposite is also true of the downtrend.
NASDAQ Composite, June 23rd, 2008
The market changed from uptrend to downtrend on June 23rd, 2008. The stop loss of 2427.93 must have stopped you when the price went below that value on June 11, 2008. If you are darling as I am you should have short the market then. But then if you are not a high risk taker as you are, you should now be holding neutral positions (of puts) to the downside. We shall now wait (but with neutral positions to the downside) for a crest to form and go short this market then, only that we shall need automatic stoploss order on standby.
The final confirmation of a downtrend was triggered by the chart shown below.
Options provide you with far more leverage than stocks. They give you the flexibility of holding each leg position if you like, because you can hold both call and put options for the same strike price and expiry date, or any variation thereof, at the same time. Therefore your profits will be far greater than if you owned the stock and with much less capital risk.
And should you have a question you need to ask, feel free to ask for you will be answered. It is through asking that I have been able to have what I have. I provide this information to help beginners and average traders who might be inexperienced in the complexity of stock market movements make money in the stock market. I prefer trading Exchange Traded Funds because they spread risks across other stocks, pay dividends, are less noisy, not very prone to rumors and or manipulations, their Options are spread at workable intervals for spread strategies, and above all, ETFs trades are easily predictable by using the broad market indices of Nasdaq, SP500, Dow, Russell 3000 and NYSE.
Confirmed Entry to the Downside Proper is Yet to Come
Confirmed entry to the downside proper is yet to come when we shall get a well defined crest. We then shall go short this market, only that we shall need automatic stoploss order on standby just incase the market decide to breakout to the upside.
Action: June 23rd, 2008: the market has been confirmed to be downtrend. Open on June 24th, 2008 Neutral positions and or Calendar Spreads to the downside (use puts) and they should be rolled over every time both legs get "on money". Stop Loss/breakout to upside is 2549.94 plus 0.1% equals 2552.49. This stop loss or breakout is adjusted accordingly as the market progresses.
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The Author’s page is designed to help beginners and average readers make some money as an extra income to supplement what they may be earning elsewhere - details of which you can find in My Page, if you will.
Power Shares Exchange-Traded Fund Trust, QQQQ (from April 05, 2007 to the current date,updated October 26th, 2008)Click thumbnail to view full-size
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