Today the Federal Reserve meets and is likely to announce a 1/4 raise in rates. This would be the 13th straight time the Fed will have raised rates. Of course now that the street is expecting a 1/4 point, the actual language that is used becomes the catalyst for the immediate market direction. The market was not interested in making a move prior to this announcement yesterday and today it appears to be on the same path. A path to nowhere.
Combining the Fed meeting with the fact that this week is options-ex, it would probably be a good thing to stay in cash for the short term. Therefore, I'm long the December QQQQ 42 puts! Trader Mike stays out of the market altogether during options-ex week. Here is a good description as to - Why I Avoid Options Expiration.
Good trading!
Tuesday, December 13, 2005
Monday, December 12, 2005
Success at last
I finally had a good trade. I bought the December 42 Puts for $0.50 and sold them for $0.75. I kept moving my stop order up as the put value increased and then got stopped out. Actually it appears the market center incorrectly filled my order as the stop should not have triggered, but as the put value dropped thereafter, I was okay with that.
This trade was fairly good for me on many levels. First, I followed the RSI (5) trading rules and secondly I was strict on using a stop to protect my position. For my last 4 trades I have put a stop on and all have been stopped out and only the last one for a gain. However, this is not a bad thing as it actually saved me money by not getting bigger losses on the 3 previously stop outs. Looking for another short now as I missed the last buy signal. The Q's are at $41.85 right now and RSI (5) is at 75. Looking for a 76 RSI value and then a cross of the price line with the SMA (2) to go short.
This trade was fairly good for me on many levels. First, I followed the RSI (5) trading rules and secondly I was strict on using a stop to protect my position. For my last 4 trades I have put a stop on and all have been stopped out and only the last one for a gain. However, this is not a bad thing as it actually saved me money by not getting bigger losses on the 3 previously stop outs. Looking for another short now as I missed the last buy signal. The Q's are at $41.85 right now and RSI (5) is at 75. Looking for a 76 RSI value and then a cross of the price line with the SMA (2) to go short.
Friday, December 02, 2005
Confused Trader
It's been awhile since I've posted about the market and my trading. This is due to the fact that I have been in a funk with my trading as of late. It probably would have been better for me to post about this as it was happening, but instead I just didn't want to think about it.
I've been trying to following the Nocona RSI (5) system and seem to get the wrong end of the trades. Of course it still seems to be working, but I'm either stopped out or I jump in on the few drawdowns it incurrs. Great. Anyway, the market went up up up and I was short and then when I got out I just kept watching the market rise while not playing the long side. Currently, I'm trying to go short again with the Q's around 42. 42!!!!! are you kidding me! My biggest loss was just a while ago while I held the 42 calls...those would be worth a bundle right now. Oh well. Live and learn.
I've been trying to following the Nocona RSI (5) system and seem to get the wrong end of the trades. Of course it still seems to be working, but I'm either stopped out or I jump in on the few drawdowns it incurrs. Great. Anyway, the market went up up up and I was short and then when I got out I just kept watching the market rise while not playing the long side. Currently, I'm trying to go short again with the Q's around 42. 42!!!!! are you kidding me! My biggest loss was just a while ago while I held the 42 calls...those would be worth a bundle right now. Oh well. Live and learn.
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