Where is the Dow & others heading in 2005?

[roguetrader]

If once again we give the majority of the days gains back then that'l be highly bearish imho.

It will indicate the lack of institutional participation to the upside.

Nasdaq down also imho means that the direction is about to turn and normally Nasdaq is a good leader of direction to start with....

Well what ever happens, the remainder of the session should be pretty interesting.

Added once again to the shorts at 10580....

Hi User, it is of course very possible, but on the subject of the Nasdaq I wouldn't read too much bearish into that, it is merely following the pattern of a correction, with lower volume down days, and since at the moment it is correcting by time more than price is still quite bullish. From my view, the Nas lead the last leg up, the INDU was the laggardso nobody is going up until the Nas is ready to go.

 

[bakula]

Hiya!
I am soooooo confused!!!! I follow the Advanced Get and a couple of other indicators such as the ellipse.
Ellipse is showing a downtrend.....no ellipse indicator on the uptrend! This indicates a downturn first...however, candlesticks DO suggest bulls to have a party! Does anyone else use the ellips? can u help me out please?? Thanks.......(am short!)

 

[User]

looks like its going to spike up and down till friday - till all those "thingys" expire....

Triple witching is not all that significant.

"Consider that over the past 20 triple witching expiration weeks going back five years, the VIX (Volatility Index) has rallied 10 times and declined 10 times, indicating no edge in terms of determining the direction of volatility and/or the market during the week of triple witching expiration".

Hi User, it is of course very possible, but on the subject of the Nasdaq I wouldn't read too much bearish into that, it is merely following the pattern of a correction, with lower volume down days, and since at the moment it is correcting by time more than price is still quite bullish. From my view, the Nas lead the last leg up, the INDU was the laggardso nobody is going up until the Nas is ready to go.

Your perfectly correct in taking the Nasdaq's down moves as a 'correction' but I'm reading it as the end of the upward run and the start of the downward.......

The Nasdaq is not doing much on the downside but as the S&P and Dow are having clear problems on the upside the Nasdaq is droping hints in regards to the downside......and when the Dow and co give back the days gains to me that sort of action normally signifies caution to the buyers and gives a couple more ticks on the shorters checklist's....

 

[roguetrader]

The thing for me is though, is basically the drive up over May was the bulls syaing, "What have you got to say about that?" So far with a lack of any real buying the bears haven't really had a lot to say, consolidation has taken place near the top all be it in a decent range. Most of the action you are witnessing is quite possibly people like me trading that range, running the market up and shorting it back down.
I did express a little concern in an earlier post today about the gain and give it back, and it does give me a little pause, but I have also thought if it is mainly traders like me, we have no vested interest in direction beyond 4pm so what we do with the market is rather meaningless. If volume starts tofigurein the equation then that will be different.
This market has been a gift to trade lately so you gotta know a lot of people are doing that.

 

[roguetrader]

The bigger issue for me is that the bullish herd is starting to get a little large for my liking.

 

[roguetrader]

Into the last 1/2hour and it looks like NYSE total volume will come in ahead of yesterdays level, while Nasdaq volume will have declined.
NYSE internals fairly bullish whilst Nasdaq internals have been more or less neutral.

 

[ivorm]

Hope the JPG comes out okay -
first off please nobody ask me what the wierd indicators are
Cheers

Hey Dave,

What are those weird indicators you're using ??



Regards,

Ivor

 

[DaveJB]

<g>
That's the, ahhh, RSI... Red Sunlike Image, and the BSL - Blue sunlike lump (had to raid P&F for the BSL of course).

Gotta agree with RT, you just have to admire this thing's ability to scoot back into the range. I don't think it sent any signals out today at all, other than 'still nothing much doing'.... I don't think triple/quad etc is going to decide anything, but am prepared to be proved incorrect.

cya

 

[Racer]

A note for your diaries

Earnings warnings seasons
Dec, Mar, June, Sept

 

[peterpr]

This market has been a gift to trade lately so you gotta know a lot of people are doing that.

Well said RT. Wife must have put something in my tea on Monday because not only did I miss the entire run up, but traded against it 3 times before making up all but 6 points on the way down. Yesterday was a different story though. My best day in a long time - 84 points in the bag and net just 2 points short of the entire weeks target.

I really don't have a view on market direction over the next week or two. I do know that 1,3 and 5 day swings remain up - just - as do weekly and monthly, so that sets a cautious intra-day bias whilst maintaining a weather-eye for key reversals. I'm just happy to see the sort of volatility we've had this week so far though, and stuff the daily/weekly close movements.

I remain sceptical of a real break-out either way this week though. With options expiry on Friday it's just not in the interests of the big players; and with remaining time getting shorter, it gets easier for them to postpone any serious building volume until next week.

 

[roguetrader]

I really don't have a view on market direction over the next week or two. I do know that 1,3 and 5 day swings remain up - just - as do weekly and monthly, so that sets a cautious intra-day bias whilst maintaining a weather-eye for key reversals. I'm just happy to see the sort of volatility we've had this week so far though, and stuff the daily/weekly close movements.

I think patience is the way here, if you have a credible record of picking tops and bottoms then fair play, "place your bets" as the saying goes. For me within any given time frame a trend is in forrce until it is reversed. To put that into context with the market here, the trend in the short-term was and still is up, the fact that we have had a longish rangebound sideways consolidation has not reversed that, simply interrupted it.. The problem with positioning ahead of the resolution of a correction like this is that the move out may be very forceful, get it wrong and it could be expensive.

 

[kriesau]

To put that into context with the market here, the trend in the short-term was and still is up, the fact that we have had a longish rangebound sideways consolidation has not reversed that, simply interrupted it.. The problem with positioning ahead of the resolution of a correction like this is that the move out may be very forceful, get it wrong and it could be expensive.

RT - Depends where you place your stops !

 

[peterpr]

The problem with positioning ahead of the resolution of a correction like this is that the move out may be very forceful, get it wrong and it could be expensive.

Agreed. But then I don't position trade so it really doesn't affect me one way or the other. The 'weather-eye' for a key reversal' comment was just another one of those worthless contributions to the perennial market gossip.

 

[bharia]

sorry guys, i may be being stupid, but can someone explain how triple witching affects the stock market. For example.... if the options expired in the money, would there be a surge of buying in market sending market higher?????

 

[roguetrader]

sorry guys, i may be being stupid, but can someone explain how triple witching affects the stock market. For example.... if the options expired in the money, would there be a surge of buying in market sending market higher?????

Hi bharia,
Options are not really a speciality of mine, but I'd say the simple answer to your question is, no. I suspect the vast majority of options written are covered, ie the writer owns the underlying and therefore exercise would simply result in a change of ownership, also index options are settled as cash. It seems to be commonly accepted that the majority of options expre worthless, though what the "majority" really is I do not know.

 

[chump]

"Depends where you place your stops "...I don't think I agree with that..within the context of a finely balanced sideways market that can go in either direction anything other than stepping aside is going to be expensive if you insist on playing that market before it confirms which way it wishes to go ...I think this the issue of trade selection and stops that has been going on elsewhere on the forum..there are always more high probability plays than a sideways market ...just my view

 

[bharia]

cheers roguetrader.... ido agree with you the fact that most of them expire worthless, or or planned to expire worthless seeing as these options are only used as a hedge for the big institutions on the underlying asset.
anyone else want to comment on how they feel the 3 witching will affect market or how it can affect market

 

[Trading Shed]

D4F Spike

A 500 points spike on D4F down to 4570! I have never seen it in such magnitude. Any meaning? Is it them? (D4F).

 

[peterpr]

sorry guys, i may be being stupid, but can someone explain how triple witching affects the stock market. For example.... if the options expired in the money, would there be a surge of buying in market sending market higher?????

Options expiring on Friday will, on aggregate have a strike price somewhere within the last 3 months trading range. You could produce a volume or market profile analysis showing the price where the largest volume was traded in fact, and my guess is that, for the DOW it is around the 10550 level. The further the index moves from that level before expiry, the bigger the aggregate payout to the options holders. In other words, the options writers have a vested interest in the market staying pretty much where it is until after Friday (on aggregate again of course). Whether they have the wherewithall to ensure that it does so is a another matter. In the meantime intra-day volatility (large high-low and small open/close ranges) helps them to further hedge their positions if necessary. Simplistic explanation, but that's it in a nutshell

 

[JillyB]

A 500 points spike on D4F down to 4570! I have never seen it in such magnitude. Any meaning? Is it them? (D4F).

No spike showing on my Dow for D4F.

?????

Keep taking the water with it