NASDAQ Fibonacci Retracement Levels

Posted on 02. Jun, 2010 by Founder in Blog

The NASDAQ fibonacci retracement levels have been very good for technical traders like us. They offer easy targets or support/resistance – notice the clear double top we are working off of. If we don’t see any meaningful move higher this week I firmly believe that we will head in the direction below. I still am hoping for a good, sustained rally as it would present a wonderful shorting opportunity – however, what I want and what the market actually does is two different things.

Clawing It’s Way Higher For Now

Posted on 23. Feb, 2010 by Founder in Blog

The market is going to claw its way higher until there are definite signs of stress. Earnings are strong and interest rates are low. Those two factors are the focal point right now. This market can continue to grind higher and it can discount this credit crisis until there is an actual failure. Once that happens, the stocks will fall dramatically.

Notice how the intra-day chart shows continued resistance and/or lack of a strong move higher on the NASDAQ. This short-term rally is getting weak and fast.

Short Term Bounce Coming For NASDAQ

Posted on 08. Feb, 2010 by Founder in Blog

After scanning through charts all weekend (considering the huge snow storm we got in DC) the only logical conclusion is that there is a short term bounce coming soon across all the indexes – NASDAQ in particular. The market sold off deeply on Friday, but in the end it rallied and closed up by a small amount. This looks like the beginning of a bounce of at least short-term duration after forming a wonderful Hammer Candlestick pattern.

Nasdaq Performance YTD

Posted on 29. Dec, 2009 by Founder in Blog

The Nasdaq performance YTD has significantly outperformed the S&P 500 and DOW when we take a look at total returns.  As shown below in the chart, the Nasdaq is now up 45.28% versus 25% for the S&P 500 and 20% for the DOW.  In addition, the Nasdaq is better off from the top of the market as far as losses when compared to the S&P 500 and DOW.  Tech is clearly looking strong, yet we are always reminded of the old saying – “the higher they rise, the harder they fall.”

Expiration Week & Option Open Interest Signals

Posted on 17. Aug, 2009 by Founder in Blog

Another option expiration week is upon us – which only means one thing usually…more volatility! While I’m hoping for another down week, we must prepare for everything in between. Right now the futures are pointing much lower.

Last night I took a look the the Open Interest for the SPY, DIA, and QQQQ August Options. I’ve never really talked about this on the blog that much, but these are important things to take a look at as they can give clues to where the money is (or isn’t).

Open interest is the number of contracts which remain open in for the certain strike price and month. These are generally people who still think they can make money in the next 5 days with there options. Having said that, we all know that 85% of all options expire worthless and that you should generally trade OPPOSITE of the crowd or herd.

So, the QQQQ has A LOT of open interest near the 37 & 38 Put and Call range. Therefore, the worst case scenario (i.e. the one that would expire most of these options worthless) would be for the QQQQ to pull back from 39-ish down to around 37 or 38. This would clearly be the worst case scenario and therefore the MOVE we should be expecting by the end of the week. For the DIA the range is around 92 and for the SPY it’s around 98.

NASDAQ-100 Looking Very Bearish

Posted on 05. Aug, 2009 by Founder in Blog

More of the same yesterday as the indexes had a late day rush higher. However, looking at the chart of the NASDAQ-1000 you can clearly see why trader might start rushing for the exits around this 165 level. This presents a great opportunity for us option traders. Clearly defined support and a pull-back target of around 150 or so makes for a sweet trading opportunity…if you know what your trading of course. We have our eye on some options right now that we might jump into later on today!

MNX

NASDAQ Target Before Major Resistance

Posted on 19. Jul, 2009 by Founder in Blog

I spent most of my time earlier this morning looking over my hundreds of charts trying to get some feeling of the market after last week’s crazy actions. Of course nothing is as clear as I would like it to be but that’s why most people can’t make money trading right? I mean if it was crystal clear then everyone would be on the right side. However, the general theme I found was this: there is still room to move higher. Even in the fact of ridiculous pressure on the economic front as well as job front, the markets were resilient last week. Whether you agree with the move or not, we have to realize that there actually may be more room above us.

Now my word of caution: don’t get too crazy long. While I think things could creep higher over the next week, we are entering MAJOR resistance zones. Per the NASDAQ, another significant move higher next week is still possible. BUT – 2,000 is the 50% retracement level from the top of the market back in 2007 – i.e. the MOST important and strongest retracement level. In addition, the same 2,000 level has been major support in the past which means it will be even harder to break. Even with all the recent strength it’s looking pretty toppy to me. I’ll let you all take from this what you will – these are just my thoughts using the long term charts.

Regardless of which side you choose to align yourself on in the coming weeks. Understand that if you buy options you are either going to be dead right or DEAD WRONG. It’s a 50/50 chance you are taking and if you feel that risky then go ahead and knock your socks off. We’ll just keep collecting small profits each day regardless of market direction.