> Sam my original post said 1490.
1490, 1492, what’s the difference in a decline like this? What
if tomatoes moved from 99.9 cents a pound to 99.8? Same
difference.
Gilbert:
Upon what factual basis do you conclude that my analysis is flawed? Here are today’s SPX-related trades, as executed by OptionsXpress:
07/26/2007 BTC ESU7 4 @ $1,490.75 $15.96 $429.40
07/26/2007 STO ESU7 1 @ $1,493.00 $ 3.99 ($5.15)
07/26/2007 STO ESU7 3 @ $1,493.00 $11.97 ($15.45)
07/26/2007 BTC ESU7 4 @ $1,495.00 $15.96 $29.40
07/26/2007 BTC ESU7 6 @ $1,492.00 $23.94 $944.10
07/26/2007 STO ESU7 10@ $1,495.25 $39.90 ($51.50)
07/26/2007 BTC ESU7 10@ $1,498.00 $39.90 ($176.50)
07/26/2007 STO ESU7 10@ $1,497.75 $39.90 ($51.50)
07/26/2007 BTC ESU7 3@ $1,500.25 $11.97 ($502.95)
07/26/2007 BTC ESU7 17@ $1,500.17 $67.83 $849.95
07/26/2007 STO ESU7 10@ $1,497.00 $39.90 ($51.50)
07/26/2007 BTC ESU7 10@ $1,497.25 $39.90 $3,448.50
07/26/2007 STO ESU7 20@ $1,504.25 $79.80 ($103.00)
* Total Realized Gain/Loss for ESU7: $4,743.80
My only measure of financial success is profitability, not speculation.
OK, thanks. I also found a near term trend line going right through 1480.
It’s a bit of an odd one that shows up connecting the two recent lows
on the ES continuous futures intraday chart. The ES had a lower open than the cash on 6.27.07 and that drops the trendline into a lower angle @ 1480
today.
Anyway, I still think a test of 1460 is more likely than not. Markets rarely
bottom on this kind of breadth pattern. Moreover, “one man’s ceiling is
another man’s floor”: the 1492-93 area is now acting as short term resistance.
Sorry Lew, I was directing my “rampage” to the general populace regarding “Market Direction”.
I too have a WOTM index spread trade to profit since I don’t ‘think’ (this time) we’ll vault quickly to new highs.
@Richard: Yes, I am counting on a bounce (that actually started in the latter half of trading today - see DJIA lop off 25% of loss), that will probably come tomorrow. It will just be a ‘bounce’. I will then intitiate a second spread trade with DJX at about 137-139 level.
With volume like today (much exceeding Friday or even Monday - and with Vix levels up in correction mode), declines like RUT aren’t easily shored up.
For those with longer range goals be sure to read my Weekly Newsletter (or at least the Bold and Italics or combined Bold with Italics:
http://www.kingdomcapital.com/freenews/freenews2007/freenews072207.htm
G
“Anyway, I still think a test of 1460 is more likely than not. Markets rarely bottom on this kind of breadth pattern. Moreover, one man’s ceiling is another man’s floor: the 1492-93 area is now acting as short term resistance.” - Sam Cook
Sam - That’s okay… my analysis was for today, as the day played itself out. Tomorrow brings new data, and possibly new conclusions. I’m out of the market at this point, except for a few ER2 longs that I bought today. I believe a snap-back rally is around the corner, after another artificial peak and corrective low takes place. The artificial peak I’m referring to is the event which I believe will start no later than Wed. In between all this, there could very well be a drop to 1460, as you say. If I see that happening, I’ll attempt to profit from it. The data I use is dynamic and noisy, especially given its short-term nature. Something I forecast today (longer-term, such as the rally by Wed) could be delayed or even change completely depending on market activity. I just go by the best data that I have available at the moment, and make trades that are apportioned accordingly. The more confident I am about an intra-day move, the larger the trade size. The overall objective is to make money.
Sounds good. Sorry, I can go only with what C2 equity curve and statistics shows and it showed a dip and I was just curious…I understand that one would know exactly what profit they would make with option spreads as soon as the trades are made. It doesn’t reflect in this combined-equity curve. Do you think a closed-equity curve (maybe as a dotted line) super-imposed on this combined-equity curve would clear the picture up and will not mis-lead the public as I was mis-leaded?
Unless RUT hits 710 or below, you would get the full $1,500 from this trade. else a write-off. No big deal…I do see a support at 712.17 on the weekly…All the best.
We are more or less on the same page. Moreover, a test at a lower level
doesn’t mean we can’t rally next week…how about a “turnaround Tuesday”… after a new low on improving breadth.
Don’t you think you need to be apologizing and explaining yourself to Lew, “Howard” aka “Palsun” aka “Neil” aka “Brian” aka??? Have you cast an eye over your own systems?
And have you forgotten that you said drawdowns don’t matter, unless they are realized? Even if it wipes out 95% of your unrealized trading capital?
“Do you think a closed-equity curve (maybe as a dotted line) super-imposed on this combined-equity curve would clear the picture up and will not mis-lead the public as I was mis-lead?” - Howard Roark
Howard: I’ve spoken in detail with Matthew about the various problems that C2’s lack of spread-trading capability causes. Unfortunately, it would take more than just a combined equity curve to solve this one. A special provision is needed for spreads. The spread pair needs to be treated as one trade, and computational exceptions made. Option spreads aren’t a high demand system on C2, so it’s unlikely to be worked on anytime soon.
As a result, assuming all my spreads are successful, C2 will always show a 50% success rate for my system (since by definition one of the pairs in the spread always “loses”). Likewise, it will always show max drawdown for the individual legs of the trade, computed individually, and without taking into account a delta of the two! There’s also the issue of drawdown not really existing if the intent is to keep the pair through expiration (which is what I do, thus avoiding exit commissions). To compensate for this, I do what is unacceptable here - I use my brokerage results to compute non-compounded annual returns.
>There’s also the issue of drawdown not really existing if the intent is to keep the pair through expiration
True. But, I would not call that drawdown because the proper definition of a drawdown is “realized losses.” and nothing else. It should be properly called “un-real-ized losses.”
Lew,
I hope your know that "Howard" = "Palsun" in another alias
Yes… I’ve been reading the noise and garbage in other threads. As long as he’s asking thoughtful and legitimate questions with community scope, I’ll respond.
Totally irrelovent Ross, words worth responding to are words worth responding to, your dark side is showing once more.
>“Anyway, I still think a test of 1460 is more likely than not. Markets rarely bottom on this kind of breadth pattern. Moreover, one man’s ceiling is another man’s floor: the 1492-93 area is now acting as short term resistance.” - Sam Cook
> Sam - That’s okay… my analysis was for today…
FWIW, my “one man’s ceiling is another man’s floor” quote refers
to the fact that 1492=93 was such a good floor for the market, and now
it is a ceiling. It wasn’t meant to dispute your POV.
Finally, consolidation along with a continuing decrease in breadth. It looks like this index is going to pop (up), but not until next week. The more breadth continues to decrease, the harder the imminent pop.
On another note, it looks like the RUT found ongoing support at 780, though I expected it to be at 760. That’s in addition to support at other lower levels (including 712), giving the index plenty of barriers before it can affect my 710 put (in Live Long and Prosper).
Forgive me if I may Lew. I just can’t help it sitting on the sidelines when someone is talking (or trading) options, but all this work and wait for a measly 30 - 60 cents on a 10 dollar risk?? I mean even if the success rate on these spread trades is 100%, the graph still captured the drawdown and the negative sharpe, no?
Last week there was 122 profitble stock trading signals according to the grid. Now there is 98. 24 of them got knocked off of the list. Including one of mine. There was a earlier post about somebody thinking the sp-500 would find support at 1460. Maybe it is correct. It sure blasted through the support area I thought would stop it.
@Richard:
I’m guessing there is a competition for “calling” this market’s direction?
Well, my take has been well documented - we are in a correction. The market will continue - probably many weeks to months - to grapple with a bottom or footing from which to launch the next rally of this bull market.
Gilbert
there is no such thing as support during a bearish move.
That’s correct. There’s also no such thing as " …Unless RUT hits 710 or below, I get the full $1,500 from this trade. There is no “intermediate draw-down” - as the instruments cannot be called unless in-the-money! "
A drawdown is a drawdown and you’re marked to market whether you’re doing spreads or outright buys. Establishing credit spreads in a low vix enviroment and rising rapidly with the market heading your way like a freight train, is the worst thing an option trader can do and experience, even if you think your chosen strike is “far away” and “safe”.
