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Friday, November 14, 2008

tomorrow's stock price prediction QQQQ Trading (DIA, SPY, NDX, QID)

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Today's stock price prediction QQQQ Trading (DIA, SPY, NDX, QID) November 14, 2008 (Nov 14, 2008)):

The first phase of today's trading, involves one QUARTER of regular trading size. We will trade it by selling puts ( November close to the money puts) as expiration is next week. Selling puts is a long position on the underlying. The underlying in this case is the stock market (NDX, SPY, DIA). In our case we plan to be selling puts on the QQQQs and possibly the NDX index itself.

11:42AM: with NDX at 1183, we are scaling on the long side of QQQQ (NDX).

12:01PM: NDX is back to 1183 level after it went up. So those who read the post between 11:42AM and 12:00PM you did not miss where we have started scaling in.

If you are patient, you can even start scaling in two to three points down (around 1180).

To understand the market a bit better, one has to analyze the losers. The first wave of losers of yesterday (who are the bears/sellers), he will appear as buyers to cover their short positions starting at around NDX 1177. The typical bear of yesterday has shorted the market down to 1149 (most likely in the afternoon after having missed the first down move (which was the death trap for bears).

Now the losers are praying that if the market gets down just to where they have shorted, they will cover their positions, and never try doing the same mistak again.

That is why I expect the price to bounce whenever it gets closer to 1177.

But I do not rule out the price to move even down to 1160 area. That is where I would starting scaling in my second QUARTER of my position size.

Finally, there is a chance that price can even go down to 1125 area. At that price I am geting in with a full size position (assuming that my analysis tells me we are at a bottom for today.

One should not forget that we are trading today by selling puts that are expiring next week. They are formed of premium, which is the last few days of expiring goes away like snow melting in late spring sun.

PROFTTS TAKEN:

(This was not reported in real-time as position was closed while outside of office)
At around 3:00PM, with NDX around 1233, we have taken the position off.

Profits are around 50 NDX points!

For those of you who got in after we got in, you got an extra 3 points profits
and the pleasure of nailing the absolute bottom.

Nailing a bottom is priceless. Nailing it twice in two days is ...

3:48PM: in case some of you are asking our opinion whether you should short the market, our answer is leave that opinion for Monday. This market is now on long side, until proven guilty! Take a long worryless weekend, and go spend your well
deserved gains.

Long live the blog and his readers!


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Happy trading,

1 Comments:

Anonymous Anonymous said...

Okay...Monday is past...so should I short the market? End of last week I was dreaming of a double bottom in the Nasdaq 100. Is there still hope for going long?

November 18, 2008 at 10:19 AM  

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