I've built a comparison between the SPY/QQQQ and the relative performance of its leveraged ETFs SSO/SDS and QLD/QID.

Both show inconsistent or not-so-clear sentiment seperately.

Then I compared QQQQ and SPY to their implied volatilites VIX and QQV (by the way, its weird that the Nasdaq ETF gets its own implied volatility index, but not the SPY, the most active stock in the world)

Then I mixed both speculative and the Implied volatilities together and here's the result. There were quick volatile spikes in relative ratios of leveraged ETF's and the implied volatility indexes that signaled the beginning of this bear market back then.

Now we're seeing the inverse signal, some signs of green in the air are showing up.

Could be a coincidence, I know... but still interesting nontheless.

Related Stocks:  QID, QLD, QQQQ, SDS, SPY, SSO

No intraday cumulative ANYTHING - but still. >:-/

After hours and hours of work, here's my indicators:

And some SPY/QQQQ/IWM intraday/daily charts with sentimental/momentum indicators as well:

Related Stocks:  IWM, QQQQ, SPY

So the strategy is to short above resistance levels once we crack the nearest key resistance in the SPY, 90, then cover a few days after the stock broke down to a new 52W low. or an even safer exit is to cover as soon as the indexes start heading back up while the stock is still at below its previous 52W low.

here they are:

Of course, looking at the weakest money flows to identify the better picks among the group. 3 of these are also ETFs and one of those is a regional Banking ETF - KRE.

And a reminder that a peek at the historical chart might save you from shorting a stock that is too close to a major major support level like Citigroup's at 3.05 which 19 years later provided a major support level last Friday the 11-21-08

Related Stocks:  C, SPY

This is the 50day moving average of the ratio, not the actual ratio, which is hidden because its too noisy. Here's the link for quick access in stockcharts.com

The put/call ratio itself swings from bullish to neutral to bearish sentiment in the options market and by itself does not show very good clear visual signals of sentiment - some would disagree, I know, but this indicator just makes those sentiment swings in options way more clear visually.

If you look closely at our last slide again, notice the little spike there in the middle of our bear slaughter sell off there, it just kept sliding at the same pace after that spike, which is what I consider a good exit signal after a few moves in the same direction. Today we also had this spike - could this be it? the end of the sell off a beginning of a new bear rally or is it another head fake? we'll see.

Related Stocks:  SPY

One of the best examples of this is CPB, a once almost ultrashort mimicking "safety" stock now turned into a sudden bear feast:

Health care, the best performing sector in October, got absolutely crushed this week more than all other sectors.

Basic materials of course comes out first *cough*Jim Rogers *cough* and most importantly: the dollar immediately tanked back to 1.31 euro/usd with such volatility that yesterday was one of biggest declines in the dollar ever.

Related Stocks:  CPB, FXE, OIL, SPY

There it is, my master plan for a DGP swing trade. it'd be interesting how this turns out. There could be a few dozen variables that could annihilate this trade - mostly extremely good or bad global news.

Its been a while since I made a good swing trade, hopefully this will be my next one.

              GO GOLD GO!

Related Stocks:  DGP, GLD

This rally also prevented the week from closing under 2002 bear market low.

The price action fireworks were so fast that it made me curious how fast can funds move the market now that liquidity is so low? can we rally/tank 20$ a day on the spy now?

Related Stocks:  KIE

With all the hoopla surrounding the investment giants/gurus showing "signs of confidence" in these greedy financial giants of wall street - they just keep tanking - which is EXACTLY like what happened in the 1930's

Related Stocks:  C, GS, JPM, MER

I guess its the flocking to safety bet

Related Stocks:  GLD, SPY

Oy Vey!

So to say the least - don't trust Prophet charts!

And here is what happened yesterday ^

and on a side note - the unemployment level would sink us into depression if GM and F collapse into their own failing misery. that was pretty much the theme yesterday afternoon and apparently today since we made a fresh new low.

Related Stocks:  F, GM, SPY, SSO

The bottom of 2002 was really really really choppy. This support line is between violent swings with a lower low in money flows later in '02 while forming a double bottom, then the successful retest in 2003 and confirmed the bottom of the internet boom bust.

We're now heading towards one of the last support lines available since mid 1997, or in other words, we're heading towards the last support level before reaching the lowest low in 11 years.

as of now we erased 6 years of gains on the SPY. 47% off the high of 154.25 is now gone.

As of this week XLU or utilities the best performing sector and XLF (financials) is the biggest loser, not far behind is XOP, oil and gas sector, losing 8.2% today while oil also broke new lows to 53.5 a barrel.

The most notable weakest stocks over 10 were ALL & ACE in the insurance industry.

There are plenty of financials that broke down already and that are about to break down, I was bombarded with breakdown alerts today, I just couldn't keep up with 'em all.

volume barely above average signaling no beginning of any sustainable rally.

Money flows are very low but do not follow intraday price action. All the big spikes we had lately kept money flow lows flat lately despite forming new lows in price action.

VIX is rising steadily, creeping up like the way the indices did in '06 with low volatility and steady higher highs every other day or so. A Different animal than what we had in October. The lower volatility makes it seem most bear market ETF's are also forming the same pattern. This usually means reversals to the upside usually fade pretty damn fast just like the pullbacks during 2003-2006.

It seems like the best strategy now is trading break downs. There are plenty of them. Breakdown alerts pop up like popcorn this week. The only problem is to choose the right ones.

Here's some picks that are at or near 52Wk lows: NIHD, BHP, CNQ, SU, CF (yes, the same stock that outperformed everybody till election day!), MFC, STI, EMN, VMW, PDE, FLS, STJ, POT, SSL, TROW, WFT, ILMN, NSM, MON.  (those in bold have more significant set ups if low is broken, such as cracked triple bottoms or failed double/triple tops)

Related Stocks:  ACE, ALL, OIL, SPY, XLF

and to back up my skepticism, lets just see how the TICK did today:

2 hour average still keeps retracing the big dump from Wednesday's sell off.

In retrospect, we have higher lows on the tick but the same theme more or less like Thursday:

sell in the morning, buy like a madman in the afternoon then take some profits towards the end of the day. Extreme swings in the tick just spell out how much this is a market exclusively made for day traders.

It could be some risky bets on Monday's big FAILED auto industry's bail out - who knows.

__________________________________________________________________________

but here's some new exciting trading tool I've found out about today - the 3x leveraged ETF's from Direxion!

They're starting to show some good liquidity now and could be extremely useful in this market for quick day trades.

3 times the leverage for me only mean same exposure for less commission. They're all double edged swords when it comes to performance, so if you stick to your exposure rules, you just pay less commission for the same risk. The more a stock moves the more people would be attracted to it as a trading tool and these stocks move like penny stocks multiplied by 10.

The most liquid stocks so far are BGU then TNA:

large cap long x3

small cap long x3

Like all index tracking ETF's though, it trades by its own support/resistance levels and it may not break support/resistance lines even if the S&P/Dow/Russell does, so its better to set stops according to the ETF itself, not what its tracking.

Related Stocks:  BGU, IWB, SPY, TNA

Energy companies did relatively well while oil kept tanking to the 55$ a barrel and while the market keeps being locked in between 100 and the low 80's range. What does this mean? anyone?

Compared with coal stocks, energy stocks also did amazingly well lately but oil companies are the majority of XLE. This means oil companies are trading like Oil is going to rocket launch itself back to the 100's or perhaps 200's pretty soon despite the new low printed today in the oil futures. but not the same case for coal.

 Now, granted, 1.7% of the XLE exposure is coal miners, but the other 98.3 aren't.

Also, XLE had a higher low today on very strong volume, not record volume but still very strong, while most indices made new lows.

So is deleveraging the only cause of weakness in oil since the low of the October collapse? if so XLE/DIG is the first to lead the way in the next bear market rally.

Related Stocks:  KOL, OIL, XLE

Basic materials are not the weakest today, which is weird because most of the biggest bouncers that peaked at election day Nov. 4th are now trading at or near their 52 week lows. Conglomerates are showing consistent weakness this week.

Near the low today, here are the biggest losers trading over 1mil in volume, over 10$ midcaps+megacaps

Next support level is 79.70, just 2.40$ below the low today and then its 70 - the low of the internet boom bust. and below that - "god help us all", people jumping off cliffs, etc etc.

Tick was pretty damn negative yesterday but flat today, perhaps cooking a reversal of some kind.

Related Stocks:  SPY

Either way you look at it, troughs in days to cover mean an edge the for next few weeks going long. This time we have a new low as well.

Its amazing how no matter how high or how long the bear rallies go, shorts have been increasing like a tsunami wave month after month, accumulating over 18 BILLION shares short at the peak there.

Related Stocks:  DXD, QID, SDS

Yep, low volume too. The odds of this going higher this week are slim.

TICK was solidly bearish till that stint at the end of the day there, but it was quickly erased towards the close. 2 hour average, another way of looking at the TICK that I've learned from the great Brett Steenbarger, also slid lower (marked in yellow).

It seems that basic materials/health care ratio have been weak since it peaked at election day and the Dollar is back to 1.25 again, which makes me believe hyper deflation is still the current trend - long the dollar, short commodities, long health care, short oil, etc etc.

Now market total volume is something to watch closely since we're losing volume every other day and are approaching the "support level" that usually means we're close to the TOP range of the trend but we didn't have any sustained rally - we are going sideways - very bearish sign.

a "new" indicator I've been paying attention to is the leveraged spy and qqqq ETF's ratio:

As you can see the ratio is trading above the index now, something that we haven't seen since the first 4 months since their inception at mid 2006 in the middle of the long extended rally till February 2007. Since there isn't a lot of history to these ETF's its hard to tell what this means besides another side effect of the forced selling we had in October.

As for the Money Flow Index, again, USUALLY oversold and overbought levels do signal bullish and bearish signals. Its not as consistent as i'd like them to be, but they do provide an edge for the direction of the next day or 2, which is my ideal timeframe for a trade.

Related Stocks:  SPY

Pretty precise "sell on the Obama news" resistance hit yesterday at 100.70

But the real weakness is in the Naz, mostly in the bullish come backer Basic Materials and technology sectors, but now also is select consumer goods - especially PG

No new highs on cumulative naz A/D line either - pretty bearish

Euro/Dollar jumped from 1.25 to 1.3

So the strategy is to carefully select stocks from that list and short till the next support line or when SPY hits 90, its next support line. And by carefully select I mean pay great attention to the money flows relative price and volume action, some stocks had pretty sharp reversals in money flows today and look like promising shorts this week.

That is, if I have any time... I couldn't trade yesterday so I missed this opportunity to catch the SPY over 100.

Related Stocks:  SPY

Roubini predicted this meltdown years ago and was dead on. Now he's contemplating whether we have the L shaped recovery,

AKA Japan's stagnation little to no growth decade or the a U-shaped recovery

Rogers on the other hand is saying that all the scumbags on wall st. with Maseratis should start learning how to drive tractors because of the upcoming hyperinflationary decline in the dollar and a prolonged commodity boom and my favorite: ABOLISH THE FEDERAL RESERVE!

Stealing the competent people's money and giving it to the incompetent greedy scum who should be punished.

It might not be a bad idea to look out for a recovery in commodities / decline in dollar trade now that we had the opposite move happen so fast. I was thinking of trading DBA

or SLV or DGP on intraday breakouts in the next few weeks or months..

Related Stocks:  DBA, DGP, SLV

If you notice, the TOP was complemented with a divergence with the cumulative A/D line

making a lower high while the S&P was maker a higher high.

I'd be nice to the see the opposite divergence to confirm THE bottom as well. (as in making a lower low on the S&P and a higher low in the cumulative NYSE A/D line)

Related Stocks:  SPY, XLB, XLV

Huge rally today,

10.2% on the dow,

12% on the spy,

11% on the QQQQ

and 7.8% on the IWM (weak)

volume is definitely not impressive,

CLF looks like the biggest comeback-er in the basic materials sector with a 29% gain

Money flows impressive, TICK action very good

lets see if this strength continues throughout the week, or fades away right back it came from like it did last week...

Related Stocks:  CLF, IWM, QQQQ, SPY

Those whiplashes just comeback time and time again

Its just what's causing them that's always different - different forms of the same greed on steroids, that is...

and our current crisis:

So looking back in hindsight, how many centuries will it take to get rid of this excessive greed? It looks like nothing has really changed...

Related Stocks:  DIA

TICK was signaling a very strong bullish day SO FAR...

And then the Money Flow just tanked sharply on the 1$ retracement  to 25.50 (highlighted in red) and that took me out after I waited for another hope-induced bounce to 27 and I got out at 26.85 instead of my target at 27.8, which which was my initial target because that was the next resistance (seen on a 1 minute chart).

Yes, I missed my initial target and it bounced right up there, but it was not worth the risk since the naz TICKQ wasn't as cheerful as the NYSE TICK.

No consecutive 30min bars in the green on the naz... rally wasn't fueled for a big 8%-9% Herami candlestick rally like we already had lately.

Related Stocks:  DIG, OIL, QQQQ, SPY

Related Stocks:  XLB, XLV

We broke the wedge, and money flow reached new lows... staring at the abyss

here comes SPY 70 or 2002 internet boom lows

jeez the market is really wacko, just a few days ago I saw extreme bullish signals, now this wedge pattern is crapping all over that has-been signal...

Related Stocks:  SPY

Last time I've been focusing on trading the dominant sectors on the premise that there are sector rotations going on between Healthcare and Basic Materials:

as in, short Healthcare ETFs/select stocks on intraday breakdowns and consecutive negative 30m TICK bars

and buy Basic Material ETFs/select stocks on intraday breakouts on consecutive positive TICK 30min bars

But that hasn't worked because there are days in which the TICk has been extremely negative AND positive in the same day

Or a bad earnings call in 1 big healthcare stocks just shoots the rest of the healthcare stocks in the foot that day

So the other ("new") strategy is to focus on the non-dominant sectors besides Basic Materials & Health Care with the biggest weekly volatility and clear cut support/resistance lines throughout this roller coaster we had lately

Here's what I screened out:

Related Stocks:  CTRP, ENER, FLS, GME, OKE, PH, SPWRA, X

The $VIX:$VXV has finally broke the Boillinger bands middle band!

now we need a test of either 1 hit on the middle band as a resistance line

or close just one day over the middle band and come right back down.

Another really good sign confirming the bottom is a  6% rally on the $SPX and a 25% decline in the VIX while we needed a 14.5% rally to get a 23.4% decline on the VIX

That looks very good for the longs. congrats to whoever had the guts to buy at the 80's range.

Related Stocks:  SID, SPY, SSO

I continue to hear about how we're heading towards a prolonged consolidation like Japan did... well here's how I see it.

not a worst case scenario, not the best case scenario, just chop. years and years of chop.

Related Stocks:  DIA, QQQQ, SPY

Well... maybe Iron Condor fans too... but nothing directional works right now for swing traders.

I smelled a fake rally despite the strong TICK confirmation because intraday support resistance lines were reeeeeeeeeally choppy, everybody were not trading the same direction today, nothing was uniform like it used to be a few days ago,

and you can see that on the TICK when the range stays mostly in one side of the isle and barely even touches the opposite sides moderate range, indicated by the areas between the gray zone and the dotted red/green lines, then you have a very strong directional trend.

So I didn't trade anything today or even this week, too unpredictable.

2 inverse hammers and extreme TICK swings we haven't seen in years happening day after day just spells out - stay out!

Related Stocks:  QQQQ, SPY

Definitely not the same kind of environment we had 2-6 months ago

and the vix has been spiking again

it seems that every single technical niche that worked before is not working any more

and the new theme, so far, is stretched to the extremes.

These signals just spell out that we either consolidate in very volatile 5-12% daily range or we keep tanking back to the '02 internet boom/bust bottom at 80. scary.

as for my missed opportunity:

I wanted to short QID over 76.5 right above resistance line and sell over support at 74 (blue line) but I missed this trade...

and why did I miss it?

QID was hard to to borrow, so I had to wait for my broker to short it for me but by the time he anwered me it was way too late and I already missed half of the move at 75

Lesson learned: don't short ultra short / short ETF's that are hard to borrow for a quick day trade!

just trade the ultra / no-leverage long ETF's instead, even if that means spending more on comissions and exposure to gain the same amount of % gain. SPEED MATTERS in a record-shattering volatile market that's only lets you find an edge in very quick intraday moves.

Related Stocks:  QID, SPY

but predictability levels are low since this is an entirely new market, so I'm limiting myself to very selective day trades.

Here are some of my ideas for now. courtesy of finviz.com & stockcharts.com

MVL and CEL are actually positive this brutal month AND since the top at '07

Healthcare sector (ultra healthcare RXL)has also outperformed all but financial, but playing financials is equivalent to gambling IMHO.

Of course, some of those industries have very few stocks, or even just 1 single stock, but they still give a good overlook at what really survived this forced liquidation insanity.

Select technology and healthcare work and I would definitely buy on breakouts and/or day trade on a days with positive tick range and lower highs on the vix/vxn/rvx.

Keyword though is SELECT since very few stocks stayed in the "safety" category throughout this crash.

The assumption here is that "safe" means predictable since the flocking to safety is the 2nd dominant theme besides betting on financials.

The risk of trading on this idea is that If that assumption doesn't work throughout this rally, meaning if healthcare doesn't break out of resistance lines, then there could be just more chop and/or significant losses if bought close to resistance levels.

we're now at a point where we tested important resistance lines at the open today - 10-14-08 - and will now pull back some more and then hopefully break them then test them as support lines and continue the rally. IF there will even be a rally.

The other likely trend will be just consolidation and a double bottom like we had this year.

Oil is also starting to grow some volume lately. end -of-trends start with fireworks in the volume department:

DIG is now touching 40, but it has resistance at 60... crazy volatility. definitely good day trading tool if and only if there are confirming signs that it really has bottom along with the indices.

Related Stocks:  CEL, DIG, MVL, OIL, RXL

Favorable variables:

OK we're sitting on major support on SPY, IWM, QQQ

right on top of '02 and '03 major resistance levels

we're down 8.21% on the IWM today

its the 7th consecutive day of losses

VIX broke 60 and reached a high of almost 65 - record level. synthetic vix longs are way way higher than yesterdays high (on a lower vix high than Tuesdays - insane)

Last day of of extreme lows of 7%-10% we closed close to the open of that extreme day which today's 55.65

Unfavorable variables:

Relative Daily volume is too low at this kind of MAJOR support level!

Forced liquidation at insane levels, no buyers on NHNL indicator

So the trade is: buy on the close sell before/at the open at the next intraday resistance level, which is 52.8 assuming there would be a minor bounce to at least the next resistance level, but I'm playing it "safe", as safe can be these days, by sticking to  trades with at least 4-1 favorable variable.

here goes nuttin'...

________________________________________________________________________

WRONG again!

Related Stocks:  IWM

Failed to break 7.40 and fallen back to the 5-5.50 range

There was a lot of chop under 5, gunning stops, killing shorts aaaaaalll year long

If this garbage closes under 4.75 and starts heading down the next day then the next support is at  3.85 just like it did on 6/26/08

but then again, once we start squeezing shorts on our way to the next rally on the indices this could jump right back up to 7.5

but earnings are on the 23rd, so it could get real choppy if a trend is already in place this month. it has a nice range though.

Related Stocks:  IUSA

Very negative day, weaker volume, new low, we broke 100.

unpredictability runnning higher every day, etc etc etc

Finally the increasingly rising shares short + short interest reported in the WSJ is making PERFECT sense right now, that histogram looks like a freakin tsunami.

as for my lil itsy bitsy day trade,

Fear is just crushing support lines, just "blood on the streets" kind of massacre. But not 1929-ish... yet

Here's something I found out that's even more disturbing than tanking to a new low after a previous day's low of 8.4% with 50% of NYSE stocks reaching new 52 week lows (according to Steenbarger only happened 6 freakin' times ever):

check out VIX synthetic longs charts compared to the VIX itself

VIX is an enigma to me today. how in the world do the synthetics gain new highs when the vix's high is lower than yesterday's'?

Related Stocks:  SPY

All classic recession stocks, cereals, soups, mustard/ketchup, flowers

Some broke out, some are about to, others are just a smooth ride up (which suggests that on the first sign of macro economic recovery they would tank hard and fast, look at GIS)

Related Stocks:  CPB, FLO, GIS, HNZ, K

So last time I paid attention to the how the close of the ratio interacted with Boillinger bands and the SPX's close.

Now the volatility of this volatility ratio is also giving out clear signals as well when overlayed on the SPX volume. Sometimes there are fakeouts here as well - they don't go hand in hand with SPX's volume and thusly easy to point out like a sore thumb.

Also noticable are how tops don't give out consistent signals, but bottoms definitely do, except our latest one, which probably suprised many technical fanatics besides myself.

Related Stocks:  SPY

Courtesy of VIX AND MORE, I found this new gem. 

added the Boilinger bands and signals popped up visually a lot clearer than just the VIX:VXO itself.

Here's how it works:

The new trend signal starts when the close of the ratio closes above or below the outer bands. if it closes below the lower band its a beginning of a bearish trend, if it closes above the upper band its a beginning of a bullish trend

BUT the trends must be confirmed by crossing the middle band upwards in a bearish trend and downwards in a bullish trend

if its a fake signal, it won't stay below the middle band in a bearish trend

and it won't stay above the middle band in a bullish trend.

or in other words, it will cross the middle band back in the the lower/upper area where it came from signaling the old trend is NOT over yet.

confirmation of new trends worked consistently throughout this bear market with this indicator.

the ratio stays below the middle band once its crossed to the lower area (sprayed green) in a bullish trend

and stays above the middle band once its crossed to the upper area in a bearish trend

Notice that there is no back and forth chop on the middle band that's not meaningful, the fake outs happen once and then the old trend continues till the next outer band.

As for hitting the same band twice after a minor pullback - that's why it would be better/safer to dive in after confirmation, not after it hits the tops or bottoms

especially in very unpredictable times like now.

Here's CBOE's PDF document explaining VXV and the VIX:VXV ratio.

sorry if there's too many arrows.

Related Stocks:  SPY

but our economy is increasingly manipulated by dirty filthy politics, so here it is, just for fun.

Yep, its sell the McCain and buy Obama trade... with clear crack at the 68% resistance level in Obama's chances of winning

and a crack at crack at McCains 30% support level of McCain's.

No, its not an ultra short

and its not even that volatile... scratch that, its not volatile at all!

or a trend that is too smooth to sustain itself like OIL or natural gas

its a real bullish chart and its also an REIT.

this stock deserves an emmy.

Related Stocks:  HCN

There was no edge in playing something that has the same chances of winning in a casino here in Vegas.

So I stayed out untill I saw something repeating itself before the House of Rep's vote: consolidation.

Big range consolidation of selling on hope and buying on fear before the vote.

So on the close on Thursday we hit the 110-111's on the SPY just like we did on End-of-the-World Monday and I bought some way Out of the money 30 strike front month puts on VIX when it hit 45.4 at the close.

45.4 is 3$ under the 48.4 top we reached on End-of-the-World Monday

and we had a 4.7% rally on SPY the next day >>> leading me to believe we won't open lower the day after a big sell off day like Monday.

Got out at the next resistance on the SPY at 114.

If i would of held this position, a long way-out-of-the-money front month with triple-digit volatility I would gotten crushed after the SELL THE NEWS dump we took to new multi-year lows at the close on Friday.

Thank god I shook out the gambler in me. if this day was in the first 3 months since I started trading I would of definitely held for the big 300% gain on the biggest rally-of-the-decade move that everybody expected it to be.

But now I know that only when insiders know monumental reversal-inducing events before everybody else we have a day where the SPY launches an 8$ gap

NOT when everybody expects a rally because Paulson/Bush/whoever said our economy will be saved.

Related Stocks:  SPY

Comparing the volatility of SPX (vix), NDX (VXN)and RUT in the last few weeks, RVX (RUT volatility) has been outperforming both till these last 2 weeks, but the RUT is still outperforming SPX and NDX even more than in most of September.

But the IWM is not breaking down yet.

So small caps are looking like bear meat at the moment, it all depends whether we get that 850$ blillion dollar induced reversal or not.

Related Stocks:  IWM, QQQQ, SPY

Related Stocks:  UUP

We're starting a completely new kind of market behavior and new levels of volatility and unpredictability.

We now have no more bail outs in sight which means that this market will be a completely different animal. The downward trending pattern till this week had government bailouts built into it.

Now that the government refuses to keep being a total slave to wall street, then wall street is left out to be the kill-or-be-killed jungle its supposed to be in a free market capitalism driven economy like ours was supposed to be and will be now, since the the treasury is close to being out of money, Bernanke is clearly concerned about inflation and not growth stimulation, the treasury only has so many dollars to throw around and its reserves are burning out on HIGH just like our VIX pattern lately.

Did I mention I used to be a graphic designer/digital illustrator?

Related Stocks:  SPY

next target is 48.5 and then the big 5 0 then we have selling exhaustion at its bottom and everything will cool down.

IF we break 50... there is no better buy signal.

Related Stocks:  DIA, SPY

A new trend is cooking and there is no volume in XLB or UYM that would indicate any kind of reversal - very scary (for longs) so far.

Related Stocks:  UYM, XLB

Yes, its political, yes its rumor palooza in WM.

BUT, its a relatively small position with potential to add more or cut small losses.

It seems, from the price action that market makers want to shake people out now before a major event that's about to happen. NOT the JP buying deposits thing, something else.

Related Stocks:  WAMUQ

Well, now in hindsight, we know the call writer made a boatload of $$$$

but looking at charts in hindsight after the action is easy, taking the risk is the hard part. but then again, why be exposed something as unpredictable as lobbyists vs. house of representatives vs. insiders. odds are terrible.

Related Stocks:  EEM

But this time we retraced back to where we came from after the knee-jerk reaction, this time we alread tested support at 117.5-118.

I did chicken out of my UYG puts yesterday, got out at my mental stop, covered commisions, thats it.

I realized that I don't want to be leveraged beyond my account value all LONG before the reaction to the biggest economic decision for the next decade.

So I'm just long the S&P 500 with put spreads.

Related Stocks:  SPY, SSO

Usually a bearish reversal signal like the "three black crows" is significant/meaningful only after a period of some kind of sustained rally. Not a knee-jerk reaction.

Related Stocks:  SPY

"The problem comes if the person who bought the call options
exercises that option to buy the stock. In that case, the seller of the
calls has to sell the stock, which they may not own, and would then
have to borrow. This is where it runs into trouble, and why some
options strategists spoken to said they were looking to avoid allowing
customers to end up in such a position.

“If they’re not a market-maker and they don’t own those shares, most
brokerages that we’ve spoken to are not going to let customers sell
those calls if they’re not already holding the stock,” says Jared
Woodard, trader at Condor Options"

So you can't short, can't exercise puts, can't sell naked calls... what next?

I wanted something other than the SPY because of the unbelievably enormous volume on the XLF on Thursday 9-18-08 (853.16Mil) that surpassed the volume on the SPY when it hit a double bottom at 17.

So double that exposure, cheaper price, exact same sector, good enough liquidity on the option market on the front month so selling puts on the UYG is exactly what I was looking for.

got in when UYG was at 18.85

________________________________________________________________________

as for my SPY put spread, it hit the (almost) exact spot I pulled the trigger at on Wednesday, but since the volatility these days is so high (VIX over 30) then It shaved 20c off the premium on the spread in 6 days, or in other words, a 6% gain just on burning that theta.

A break of resistance at 1206 on the ES or 120.4 on the SPY would confirm that this low volume dive from 129 to 118.3 is just a very volatile retracement.

_________________________________________________________________________

Took off 50% of my exposure to FRE when it hit 1.14 in the morning  because if it were to FAIL a break out of 1.16 then I would be out at resistance and have less draw down.

BUT if FRE keeps going up the stairs breaking 1.4, which it cracked today but didn't break, then that would be a confirmation of new bullish trend on FRE, in my opinion.

Next resistance if 1.4 is broken is 2.52!

I thought of shorting FNM to hedge once FRE cracked 1.4 but then I realized oh, right, I'm still being terrorized by the SEC till at least October... F&*#ers.

Related Stocks:  FRE, SPY, UYG, XLF