JanWk1 - SPY Fiscal Cliff?

My Chartnexus is working again. ;) So I thought I would post this as well. It shows all my favourite indicators. Firstly, the ichimoku kinko hyo is represented here. Then the volume traded, plus the moving averages - 50 day, 200 day respectively in blue and red. And pivot numbers showing all the supports - S1, S2, S3 as well as resistance - R1, R2, R3.

So you may ask, what does this all mean? To be honest, I am not too sure either. I just know that the S1 support line at 1396.640 might offer some resistance, and in this sense, it is good because the ichimoku indicator doesn't show the supports within the Kumo (Cloud) itself.

But the top of the cloud is also a resistance line, and that is measured by the pivot 1407.370. So my take for this week leading up to JanWk1, the SPY is most likely to be trending sideways. Anyway, let's see what the market offers us tonight. My feeling is it is likely to be trending sideways, so it will move in between 1407.370 and 1396.640.

I know it is a tight little window, but I have a feeling the opening and closing price tonight will be in between this range. :) Otherwise, happy trading people! ;)

Invest in Financial Education

Financial literacy is something that should be emphasized time and again. There is nothing sadder than not having the necessary financial information or knowledge and making a bad financial investment decision that cost you an arm or a leg.

As it is, financial geniuses are already making broad stroke mistakes in their trading strategy, so what makes the novice trader any less susceptible to financial losses in the stock market? It is more likely than not that the novice trader is likely to make small returns and incur huge losses.

But just imagine if you know what is happening in the market, and you're ready and geared up for the opportunity? Wouldn't that be better? I think that is a smarter thing to do. To be financially in the know as to the instruments of investments. Never mind if the financial literacy course is expensive. If you think about it, the losses that you have to stomach is probably worth the course itself.

DecWk4 - SPY Market Summary

As predicted (I know I am using that word a lot!), the SPY entered into another bloodbath last night. The ichimoku charts this morning showed a huge bearish candlestick. OMG (oh my gosh). Sorry, I had to say that.

It is now officially into bear territory. The closing price for the SPY has pierced below the support that I was talking about the other day. I was hoping that the price will not cross below 1410 but unfortunately the terrible has happened, and it is now officially into the Kumo (Cloud). The Kijun Sen and the Tenkan Sen is trending towards convergence, and if it does indeed converge, then it is a strong bearish movement, and could possibly pierce below the cloud.

However, historically, it hasn't drop in this manner all the way, so in a sense, I have a strong feeling that come next week, it is likely to be a sideways movement, at least until JanWk1. The SPY closed at 140.03 with a drop of $1.532 USD. Hope nobody got assigned this week. :)

Blessed New Year! Let's look forward to a profitable 2013! :)

DecWk4 - SPY Bloodbath!

Well the SPY's performance last night shows that it is really going to go for a final bloodbath to end the year with. As predicted, the SPY opened and closed very near with less than ten cents as the difference.

This is marred by a huge dip piercing into the Kumo (Cloud) and then it recovered. This is just indicative of a huge indecision, and from the looks of it, it looks like it is gonna go down tonight. Possibly so far down that the Kijun Sen might cross the Tenkan Sen and predict a huge downward trend for 2013!

It doesn't look good from where I am sitting. Sit tight and cut loss if you sold put spreads! If you're not invested, good for you, and enjoy the bloodbath tonight! :)

DecWk4 - SPY Flat?

Last night's SPY performance is as expected. The indicators have been pointing downwards. There is a relatively strong support at 1410 for the S&P500. Which means if it crosses below that price tonight, it will spark another round of fresh selling.

As it is, the Kijun Sen is rising, and that is not a good sign considering that the Tenkan Sen is likely to converge as well if the current price continues to dip. The price last night is at the threshold of dipping below the Kijun Sen. While it is generally bullish, it is now in bearish territory again.

However, I expected it to be bearish for this week. It should ideally touch the top of the Kumo (Cloud) tonight and then rebound. I expect to see a star formation appearing with the opening and closing prices to be very near to each other.

Well, let's see what happens tonight, if it closes below 1410, then the SPY is going for another bloodbath on Friday. :) Happy new year people. May it be a better 2013!

DecWk4 - SPY Bearish Sentiments

Monday's half day trading day in lieu of the fact that it is Christmas Day! Blessed Christmas folks!

As predicted, it's a downward trend on Monday, so does this in effect mean that it will be a further downward trend when markets open on Wednesday? I think there is likely to be more downside for this week. The SPY will probably try to test the support which is the top of the Kumo (Cloud) and then it will bounce upwards.

This bouncing upwards is likely to be over the next week. But whether that happens or not, it will depend on the performance of the market this week starting from Wednesday till Friday. I am looking to sell a Call Spread, but that might be an unwise decision considering that the market can throw a curve ball at you.

The better thing to do is to sell a Put Spread as the support might hold it at bay. How was this all pan out, will depend on tomorrow's market performance. :)

DecWk3 - SPY Bloodbath

If anything, last night's SPY Ex-Dividend action was a bloodbath for many Put Spread sellers. Look at the thickness of that candlestick? Just as I suspected something was amiss, this has to happen. WOW.

I lost money, but thank God, I managed to have the presence of mind to cut loss when the trigger hit my criterion. Sometimes upon hindsight, you just thank God that you made that decision, but just a day before, others could be saying, "why did you do that? it was a safe trade!"

Well, I know this much to know that there is no truly safe trade. Especially in last night's market. It was a can of worms opened, and I am sure a lot of folks couldn't have made it out in time. :(

Market trends is still a strong bull movement. Although the Chikou Span has dipped into the historical green cloud. This is an indication that the market might be heading downwards if on Monday the market dips further. For that, we will have to watch what happens over the weekend.

From the looks of the ichimoku charts, I think it will likely be a downward movement until it touches the support of the Kumo (Cloud). Probably a good time to sell a Call Spread next week Monday maybe?

It may not be the end of the world yesterday, but it was like a near end of the world scenario for those who are heavily invested and had to cut loss. Again, Warren Buffett's two golden rules of investments. Rule number 1 capital preservation is most important. And Rule number two is don't forget rule number 1. I suggest we do likewise in a volatile market such as this.

Blessed Christmas and see you all next week! :)

DecWk3 - Cut Loss!

Last night's market performance by the SPY was indeed a uncertain one. It dipped further, and it hit my 4 times of premium sold criterion and I decided there and then to cut loss for peace of mind. :)

ROI for my loss is -18.12%. Ouch!

It amazing how once you have cut loss, you feel much much happier. I felt that last night. I know this week's trade is a little tricky just simply based on the way the premiums shot up and downwards. It's a sign that there is something special that is going to happen for this week's trade. I am not entirely sure what though.

In any case, I can enjoy my Christmas celebrations and I don't have to worry about/or whether if I will be assigned come Friday because of sudden gaps upwards or downwards. :)

As Warren Buffett once said, "I don't trade what I don't know". I think that's good advice, and especially if the market movements are so erratic, I won't want anything silly to happen and destroy my Christmas moods. :)

I woke up this morning, and guess what? The SPY after dipping and triggering my cut loss criterion, has gracefully increased and went up $0.83 to close at $145.12. Upon hindsight, it kind of matches my earlier prediction that it might burst the $147 trend line. I was looking at selling the $147/148 spread earlier this week.

So did I cut loss for nothing? *LOL* Well I try not to second guess my cut loss criterion. I put it in place for a reason, and if it triggers it, then so be it. I will cut loss, because the last thing I want is to worry about some kind of massive gap down on Friday market opening. Which could possibly happen since the candlesticks for the last 4 trading days have been rather long. :)

Looking at the SPY futures now, it looks like the SPY is gonna gap down at least $2.5+ which means it would probably trigger my strike price for the Put Spread $141.5/142.5!! Oh My Gosh. I can't imagine the horror of that happening tonight at market opening when my trade get assigned or if the buyer decides to exercise the option and I have to buy it back! I would probably incur a huge loss. :( 

This just solidifies my trading methodology and my firm belief that if you sense something amiss, cut loss and then come back another day. There are 51 weeks left to trade. :) 

Blessed Christmas people, see you next week. :)

DecWk3 - Wednesday's Performance

Wednesday's performance was exactly what I had thought it would be! The SPY dropped, and for the earlier part of the night, it dropped till the first threshold that I set for it, and that's $0.54 down. I decided then that I would sell a Put Spread $141.5/142.5 at $0.08 cents premium.

It was a rather risky trade because any dip on Thursday could result in a cut loss situation. I should have sold a spread that was a dollar lower, $141/142. That would have been a more sensible trade, and that would have allowed me more peace of mind.

The closing performance for Wednesday's trading day was an even lower $144.29 which was a $1.08 drop!  That dropped basically stressed all the premiums and the $141.5/142.5 spread showed $0.17 cents premiums! Imagine if I sold that spread?! It would have been a huge gain.

It's a worrying drop, which means when market opens on Thursday, it could be a potential cut loss situation if the market were to drop. I have decided that whichever the case, if it triggers my cut loss criterion, I will cut loss.

Psychology of Investing

I thought I would quickly pen down my thoughts on this topic since it is essentially a large part of my trading/investment strategy, and it is one that is hardly talked about by those fly-by-night trader teachers. Of course there are many reputable "teachers/gurus" out there that teaches you to have a proper trading strategy, but I think people prefer to hear it from a novice trader sometimes.

I don't know about you, but I tend to prefer to hear it from retail investors and their first hand experiences and emotional turmoil that they have to go through whenever they are out there in the market trading for themselves. I have always wished for some kind of emotional social support group that can offer good advice in times of need.

When I saw that the SPY dipped at closing this morning, it affected me emotionally. I know this is a bad sign, because I shouldn't be feeling that way, but I guess I do. I know what I should do in this event, and that is to monitor the SPY tonight and then cut loss once it triggers my cut loss criterion. My writing of this note is to also remind me that I should be aware that these are the measures that I should take tonight should the SPY continue to dip and trigger my cut loss criterion.

I have decided to make my cut loss mechanism to 3 times of premium sold. The reason why I am doing this is because I don't want to waste time eye-baling the market again tonight. Also, I am assuming that if the SPY were to go down tonight, I will lose less since I will be cutting losses earlier.

The SPY futures looks like they are retreating to positive territory. I hope I am right! :)

DecWk3 - Morning After Update

The SPY has decided to take a hard tumble and it dipped over the night to the second threshold that I thought it would (if it decided to tumble). I basically made some assumptions based on Tuesday's data for Wednesday's performance.

I thought that if the price were to drop on Wednesday, it would be a selling opportunity for a Put Spread. It did drop last night, and true enough, it was a selling opportunity. The question now was till which threshold would the price drop to? I have set two price benchmarks for it to drop to and then I would consider an entry into the market.

I was looking at $144.83 as the first benchmark, and if it didn't cross over, it would mean that the support was there. It barely touched that line and bounced back up. I decided that it was a good opportunity to sell that trade and only managed to get the pair 141.5/142.5 at $0.08 premium.

It was a good trade. Ceteris paribus of course. All things must remain constant, that is, price must continue to climb and return at least to normal ranges.

Unfortunately the SPY has dropped to my second threshold for the night and it is at $144.29 with a drop of $1.08. You may be wondering how I came about with this magic number. It is quite simple really. I merely divided the candlestick from the previous day into three parts.

So if the SPY were to drop $0.54 cents to the first threshold, I would sell an "easy-way-out" trade. If it continued to drop, to double that at $1.08, I would also want to sell an even lower and perhaps safer spread, with the same premium of 0.08 cents. But as I am in Singapore, and as it was already past midnight, there was no way I am going to sit through the entire night eyeballing the market. I still have a day job. :)

So I made a choice and took the dive at 12.11am Thursday morning. Admittedly I took more risk than needed when I sold the trade. I had an almost blind kind of faith in the fact that it would actually bull doze upwards towards the end of market trading day. I entered the market when the price dropped recovered to -0.09 cents.

Of course, I went to bed, and the SPY proved to me that my thoughts and assumptions were all wrong. Haha.

So now that the trade has gone south, what's left for me to do is to monitor the premiums further and to hope that it doesn't cross my conservative 4 times of the premium sold. Basically looking at the trade this morning, it says that my trade is valued at 0.19 cents. This refers to the current premium that my spread is worth. If I were to divide this by 0.08 cents premium sold, I will get a ratio of 2.375 times of premium sold.

That's an indication that I should be prepared for a situation of cut loss tonight when the market opens. Cut loss here mean "close-my-eyes" and get out of the trade (also have to mentally cut off my emotions as well). As it is still within the thresholds of my cut loss strategy, and coupled with the fact that there is still time decay working in my favour, I am hoping for a reversal tonight and a confirmation that my theory is proven correct.

My theory is, if price were to drop more then two thirds of the candlestick the day before, it is likely to continue to go downwards the next day. It did an day low of $144.24 which was enough in my opinion, but because I was sleeping at that time, I could do nothing. Not that I would be doing anything either. There is still a buffer of $1.79 before it breaches the $142.5 strike price, assuming that the SPY is to continue to dip tonight.

Let's keep our fingers cross and hope for a reversal tonight. :) Otherwise, it might be safer to cut loss and come back again the next trading week.

DecWk3 - SPY Sold!

Trade:
Sell: SPY DecWk3 PS 141.5/142.5 $0.08
Status: Filled on Wednesday 12 Dec 12.11am (SG time)
Expiry: 21 Dec (US time)
Contracts: 5
ROI: 5.94%

Analysis:

In my previous post I mentioned that this week is a major bull run week, and it is with good reason I am generally avoiding a Call Spread trade. Instead as you can see I have decided to opt for a Put Spread trade, and it is filled at a premium of $0.08. Woohoo!

Again, I am using my "easy-way-out" strategy and opting to choose the trade that is nearer to the current price. I am predicting that this is only a temporary pull back, but tomorrow the SPY is likely to continue its upward climb. Either that, or I will have to cut loss. :)

For the looks of it, I think I should have a pretty decent buffer at $142.5. I highly doubt that it is going to go down $3+ especially since the bullish sentiment signal has been triggered already. Just simply based on historical readings of the ichimoku charts, it is highly unlikely that it will crash. Unless something happens, like maybe the end of the world? In which case it won't really matter either.

I calculated that the intra-day low should be at about $144.83. So far it has only managed to touch $144.86 which is a good sign. Of course I hope that the SPY will not drop further tomorrow or Friday. Whichever happens, it will be an interesting journey as I will know if this theory really works or not.

DecWk3 - SPY: Bullish Uptrend Confirmed!

WOW. I am speechless. The ichimoku charts have spoken again. I am still a novice, but the little that I know of the charts are making me excited just looking at it. :)

In short, I missed a perfect selling opportunity for a Put Spread. I had predicted based on the charts that it would go up at least $1.50, but the SPY outperformed my expectations and went up by $1.62! WOW. Did I already say that just now? ;)

Why is this a MAJOR indication that it is a big bull run from here onwards?

1. Firstly, there is no dip, the low of the day is very close to the opening.

2. The closing price is also very near to the intra-day high.

3. The chikou span (26 day lagging moving average) has pierced through the green cloud!

4. The senkou span A has crossed over the senkou span B as is evident in the future (count 26 days ahead).

5. If you look at the historical charts 6 months or more, you will realise that this is going to be a big bull run (ceteris paribus) that's if there is no more bad news coming out of anywhere. :)

Hold on tight folks, it's going to be a smooth sailing flight UP! :) if you sold the SPY DecWk3 Call Spread 147/148 spread this week, I would suggest keeping your eyes peeled and hope that the SPY retraces a lot tonight. That said, if the SPY retraces a lot tonight, I will be hunting for a Put Spread.

DecWk3 - Bullish Uptrend!

Wow, look at the ichimoku charts! They are spoken, and spoken volumes at that. The SPY has literally shot up to the sky and this is evident in the huge candlestick as shown in the chart above. The SPY closed at $143.79 up 1.18% or $1.67.

The market tested the resistance level provided by the Kumo (Cloud) and since this is the third time, it finally broke through the cloud! The SPY closed just above the cloud, and this is otherwise known as a Kumo Breakout scenario. The SPY has managed to retain its buying fever, and I am expecting more tonight.

If you take a look at the Chikou Span (or the lagging 26 day indicator), it shows a crossover both the historical Tenkan Sen and Kijun Sen moving averages. This is a bullish indicator to suggest that there is a great bullish movement.

Will the SPY continue its upswing and test the upper limits of $147 by Friday? It's anyone's guess. If it does, then perhaps it would be a good time to consider buying a Put Spread and let it naturally build the buffer. I personally think that the SPY is going to touch or maybe even expire at $147. So selling a Call Spread while it may have some advantages, may not be such a wise move considering that this is possibly the last trading week with any meaningful premium available.

Anyway, better to eagle the SPY tonight. It is definitely very very exciting! :) 

DecWk2 - Market Update

It was a beautiful SPY movement last Friday and it ended with the SPY trending lower. It was a strong bearish movement, even though it had tested the Kumo (Cloud) for the second time. Usually if it tests for the third time, it is indicative of a breakthrough or if it fails again, then it will reach new bearish limits.

My trade expired worthless and I bagged a 5.94% ROI. It was one of the mor successful trades as I combined both the "easy-way-out" strategy and the ichimoku charts.

The charts shows the general bearish closing and my Call Spread of 146/147 was safe!

This is the last week DecWk3 before the markets ends for the new year. Should be exciting!

Quote of the Day

While optimism is good, misplaced optimism is bad indeed.

DecWk2 - Expiring Options

The SPY's lackluster performance last night has yet again proven the ichimoku charts are true. Last night's price movements show that there is a Kumo (Cloud) breakout, but downwards. Unfortunately there wasn't enough power to get it going upwards or even into the cloud itself. 

The Chikou Span which is a 26 day lagging moving average, actually shows that it has triggered historical price, and that is a strong bearish signal. This just means that when market opens later, it is likely to be a bearish downward movement. 

The only chance is if buyers were to come back into the market to push prices upwards, in which case it would need to test the resistance which is the bottom line of the cloud itself. Whichever the case, it is unlikely that the SPY being in bearish territory is going to have a huge spike, not especially on e Friday when options are expiring. At $142.66 (closing price last night) there is a buffer of at least USD $3 before it hits the strike price of the pair that I sold for.

In other words, if the market were to trend upwards tonight, I doubt it will have the muscle to move up $3. If the market were to trend downwards instead, I will definitely be looking for a trade to sell. Exciting times! :) Let's see what the market brings to us tonight! 

DecWk2 - Friday (SG time) Morning Update

The SPY's performance last night was predictable to say the least. It hit the resistance level that was the Kumo (Cloud) and decided that it was too much to push through into the unknown.

So instead of pushing through, it decided to pare off gains from the previous trading days and sellers came in. The performance was a straight bear. At first it was on a slight upwards movement, but it was short-lived as sellers brought the price tumbling downwards.

It was tumbling downwards so much that I even got hopeful of a Put Spread trade that I could sell. That would be sweet. But I decided that I will sit this one out and relax.

True enough, it dipped further. I think if it continues to dip downwards, there could be a strong case for a Put Spread tonight when DecWk2 will be expiring. Sounds exciting people.

DecWk2 - Flat Performance

Last night's performance was indeed an indication that the resistance of the Kumo (Cloud) should not be ignored. The spike in the SPY was indeed impressive. It shot up towards the sky and out of the top of the cloud, but eventually the price came down to where it should be, and that is just below the resistance line.

This is important because this just means the market is entering into another session of indecision. This indecision in the market is good because expiry of the DecWk2 options for the SPY is Friday. All this time even as I speak, time decay is setting in, and already my trade is "safe". I hope that it stays that way.

The pre-market futures for the SPY shows a lackluster uncertainty, I sure hope that it stays that way till expiry. Well, let's see what the market has in store for us! :) 

DecWk2 - Bullish Uptrend Confirmed?

Last night was a really bullish uptrend! Not bad actually. In fact, there is an indicator that kind of showed up. If you look at the Chikou Span, you would notice that it crosses historical price, and that's an indicator that there is a weak bullish trend. True enough there was one last night.

So where do we go from here you may ask, well, honestly I don't know, and I pretty much don't care. I am only hoping that the SPY will correct itself the way it did after I sold my trade, and hopefully it goes down, down, DOWN!

My assessment for tonight is that it will try to pierce the Kumo (Cloud) and the base of the Kumo is actually the resistance line, in order for the SPY to break through the Kumo, there must be a huge buying frenzy, and the closing price must be within the cloud, or out of the top of the cloud. That would be disastrous because that would mean I would have to cut loss.

The current pre-market prices are now quite iffy, or undecided, which is good because that just means if the market were to come crashing down, then my trade would be very safe. I am hoping for that. Let's see what happens tonight. :)

DecWk2 - SPY Sold!

Trade:
Sell: SPY DecWk2 CS 146/147 $0.08
Status: Filled on Wednesday 12 Dec 12.53am (SG time)
Expiry: 14 Dec (US time)
Contracts: 5
ROI: 5.94%

Analysis:

I am testing out my strategy and that is to take the "easy way out" trade. I am thinking that I should be able to get at least an 8 cents premium at the high of the market spike. I managed to sell a trade for that premium! The strategy seems to be working. At least I managed to get the 8 cents premium for the "easy way out" trade.

Now the challenge is to patiently wait till it expires worthless on Friday evening (US time), and hopefully the bullish trend will actually enter into the Kumo (Cloud) and then become a sideways trend for at least until this week is over.

As it is, the SPY has since dropped, and the premiums are slowly diminishing. All I got to do now is wait for the power of time decay to set in and then we can call it a day. :)

DecWk2 - SPY Spike

The SPY has finally spiked up as I expected! So exciting. I am looking for a trade to sell, but so far the premiums are less than luxurious. I am looking at the following trade:

Sell SPY Call Spread $148/149 $0.05

But realistically speaking, that is almost an impossible trade now unless the SPY continues its upward bullish trend. The question here would be, is there enough buying power to push the SPY further upwards tonight so that we can find the right premiums for the trade?

It's anyone's guess really. So we are at the crossroads of a trade, and potentially for those that entered into the market when there was an earlier spike or gap up, they could have already sold the call spread for their desired premium.

My instincts tell me that I should sell Call Spread $146/147 $0.07.

Shall I take the risk or not? :)

DecWk2 - Monday's Performance

Monday's performance on the SPY is not exactly what one would call exciting, and in a sense, it is pretty sad to say the least. Why would I say that? Well, here we have a perfect opportunity for the SPY to burst out of the dole-drums that it seems to be experiencing, and pierce itself through the Kumo (Cloud) but that has not yet happen. In fact if last night was the bull run of 2012, then it would suitably be an apt finish to the rather down market action year.

Okay, so maybe I am exaggerating a little. It isn't all that bad considering that the market was climbing all the way up since leading to the US Elections. But now post Elections, it seems there was a slight correction with news of the impending fiscal cliff a couple of months ago and Europe's worrisome worries. Of course they all knew that, or is it as a result of finding nothing worthy to report after the biggest event of the year is over? Maybe. 

Anyway, who cares really?! Obama has won, and the other guy has lost. That's the nature of the game. One winner, and the other did not win. So what now? What do we expect from the markets? Are we on the slow road to recovery now that the working class has spoken with their voting slips? Or are we in for another shaky ride? Well from the look at the ichinoku indicator above of last night's performance. I am quite pleased to say the least.

The SPY is on a slow uptrend climb. It only managed a fractional increase last night (or evening, depending on where you're located). That might spell some bearish sentiments for tonight though. The Tenkan Sen and the Kijun Sen are now moving in parallel to each other. It's a sideways trending pattern if you ask me. Still bullish, but weak, so maybe as it approaches the Kumo (Cloud) we might begin to see a trend breaker, maybe, it might burst into life and become a shooting star.

Get ready folks, it's time. :)

DecWk2 - Pre-Market Anticipation

It's definitely gonna be an interesting night for me. When the US market opens later at 10.30pm SG time. I am hoping for a good run up tonight. :)

The ichimoku indicators have shown the trends and it is going up. It is a good sign. There is definitely gonna be a huge candlestick for sure. I am just waiting for the bullish signal to be stronger.

That said, I am going to take my "easy way out" strategy and sell one spread nearer to the current price. I realise that this strategy can only apply if there is a consecutive bull run of at least two trading days and at least a buffer or spike of at least +4-5 USD.

If you are following my trades, you will realise that my strategy is roughly very simplistic and amateurish. The important thing for me is a safe trade. Capital preservation is most important. Everything else is just persuasive.

Monday market opens in 30 minutes folks! Get ready.

DecWk1 - SPY Market Roundup

The market on 6 December 2012 has spoken. It looks like the Tenkan Sen crossover is true. The SPY is on a bullish trend pattern upwards, and it looks good from last Friday's trading day. The SPY closed trading day at USD $142.415 +0.435 cents from the previous day. 

This is definitely indicative of a weak bullish behavior, as the current price is under the candlestick, and although the Tenkan Sen seems to be moving sideways at the moment, it should eventually move upwards as it breaks out of the Kumo (Cloud).

There should be a huge upswing soon, maybe we will see it this week DecWk2. Let's hope for the best! :)

Options Trading Platforms

There are many types of options trading platforms in the market out there. Just google the results and you can cherry pick the ones that you like. I have decided that I want to keep things simple and my options trading strategy simpler. So options xpress works well for me at the moment.

They may not be the cheapest in terms of trading commissions, but the platform is quite simple to use, and relatively idiot-proof, so it is good for idiots like me. At least I can focus on the basics of investing and I am quite happy with the tools offered. There is some educational videos that they offer as well, and there is a virtual trading platform for those wanting some extra training.

I guess these are common generic features that all trading platforms should have and offer their clients. I prefer www.optionsxpress.com because it works for me. You may try other platforms like Think or Swim, or whichever trading platform you want. The rules of the game are the same, just that maybe the other platforms offer better commission models for trades.

So best advice is to get a platform that you feel comfortable with. One that had a local representative where you are so that you can ask questions, and learn how to use the system. Once you have the necessary tools on hand, and you have credited money into your account, you are basically ready to rule the world.

Of course keep your eyes open, and read the market reports before taking a quantum leap of faith into the trade. That's all for now!

DecWk1 - No Trades

Looks like there is no trade for DecWk1 tonight. The results of the non-farm payrolls was not too bad considering, but somehow the market just doesn't show the price movements. It's frustrating especially since having just recovered "emotionally" from a technical cut loss.

I reckon I could still put in a trade, but I am too tired. To eye-ball the market till the wee hours of the morning, is just not happening for me in my humble opinion. Of course if you have the energy, then do it. But as for me, I am gonna hit the sack.

Now coming to think of it. There were definitely selling opportunities which I could have leveraged on this week. But the reality was I didn't have the guts to do it. One critical reason was that there wasn't enough buffer from the current strike price. Secondly, in a flat market, the price movements can be going in any one direction. Which makes it all the more risky and exciting.

But thank goodness, I decided to sit out this trade. Nevertheless, it is always good to monitor.

DecWk1 - Bullish?

Based on last night's performance, the SPY looks like it is going upwards. :) This is because if it went downwards, price would have cut across the candlestick and that would have mean a reversal of sorts. The fact that it didn't happen, is a good indication that come Thursday night, or (Thursday morning US time), the SPY is likely to shoot upwards.

That would in a way make sense for me, but it must stay up of course. ;) Let's see what the market offers tonight. 

DecWk1 - Still Bullish?

The Ichimoku Charts are still quite uncertain as the market tries to sort itself out. Well, from the looks of it, if it doesn't do a bull-run upwards tonight, then we might be looking at another downward trend as by tonight the price will intersect with the candlestick if it is bearish.

The only way is if the candlestick tonight opens with a huge bullish gap upwards. That would be the best indication that this weak bullish signal will become a major bullish signal. I am hoping that it will be. It's already Wednesday, and if anything, it better be tonight.

Actually, if it is bearish tonight, I am also happy because that would mean the market is towards a downward trend! Monday was a down, Tuesday a slight down, if Wednesday is also a down, then Thursday we will see a huge down! Hmmm.. very interesting indeed! 

Let's see what the market offers us tonight. :)

Quote of the Day

What goes up, must come down. But what goes down, must eventually make its way up as well.

DecWk1 - Weak Bullish Signal?

The SPY it seems is going to shoot up tonight. The Tenkan Sen has officially crossed over the Kijun Sen! Look at the charts. It's a weak crossover though, so don't expect too many fireworks, but nevertheless, I am still expecting a gap up when market opens tonight (Tuesday 4 December 2012 US time).

As it is, there was already a gap up last night, and even though it closes downwards, there is hope that there are buyers willing to drive the SPY closer to the bottom of the thinning cloud (Kumo).

It looks exciting, and maybe tonight we will be able to find something to sell. Hopefully there will be some good premiums. Get ready. ;)

Quote of the Day

Strike while the iron's hot.

DecWk1 - Bullish?

Welcome to December folks! I am optimistic about December for some reason. Maybe it is due to the fact that the Ichimoku charts gave me an indication that it might be bullish tonight. The indicator shows that the Tenkan Sen is cutting from below the Kijun Sen. This is a crossover signal and that it might become bullish.

I can't wait for when markets open, and the SPY shoots up to the stars. I am sure everyone who knows technical analysis would also be looking forward to that event. Maybe I should try my "easy-way-out" strategy for a $0.08 premium. I am sure that premiums tonight will be unusually higher.

Well if the SPY gaps up by USD 2.00 and if i am able to sell a premium that is at least USD 7.00 away, I think it might be safe in these ever changing times. It seems the market might be sorting itself out since last week's roller coaster trading days.

Where will the SPY go tonight (SG Time)? Well, only time will tell, and I can't wait to sell some options. :)

That's all for now!

Quote of the Day

It's ain't over till the fat lady sings.

NovWk5 - Options Expiry

Last night was a close shave as usual. The market was indecisive, and that's a clear indication that there is a selling opportunity, but a risky one. That's because you never know where the market is heading towards, it can be a roller-coaster up and down price fluctuation the entire night without any conclusive result.

I nearly eye-balled the market again, but decided that the buffer was safe enough and went to sleep, albeit with an uneasy gut feel. I knew my trade was safe, but I can never be truly safe. Just had to take a risk.

The trade summary again:

Trade: Sell SPY NovWk5 PS 140/141 $0.05
Entered: Friday 30 Nov (US time)
Expired: Friday 30 Nov (US time)
Contracts size: 5
ROI: 2.95%
Status: Options Expired Worthless!

Analysis:

Looking at the chart for last night, my prediction that the two moving averages would finally meet is now true. The tenkan sen and kijun sen has met! When the tenkan sen crosses the kijen sen from below, it is a very bullish signal.

Looking at the candlestick for yesterday, it looks undecided, and that just means that the market is going to shoot up above the clouds. The question here is, would there be enough buying power in the market to allow that to happen? It's anyone's guess, but from here, it looks good!

My decision to enter the market on Friday is both a safe and risky one. It is safe because Friday is the expiry day when market closes, so technically due to time decay, there is very little risk if I were to buy anything after the market has "spoken" in the early hours of trading.

However, since there was no definite answer last night, it was also risky to sell anything because the market could possibly expire against your favor, in which case, you would be caught with your pants down. Furthermore, this was compounded with the fact that there is very little premium generally all around weekly options on the day of expiry, that you simply just have to take a risk.

Thank goodness, there was one opportunity that was relatively safe. Price was $142+/- thereabouts, and there was a spread $140/$141 that offers a $0.05 premium. Of course I know later that it actually offered $0.08 premium because the market started dropping (de ja vu). But if I wasn't in, I would probably not be selling anything thereafter, so it was an overall good decision to enter when I did.

Greed, I realise will make you linger and want the higher premium, but in reality, your soundness of mind would prevent you from entering into a trade with a higher premium especially when you consider that the buffer is so tiny. The market went to a low of $141.66 (presumably that this was when the market offered a $0.08 premium) under these circumstances, would anyone in their right minds sell a trade? Not likely.

Anyway, I just got up, and the options has successfully expired worthless! Another 2.95% ROI on the road to recovery! Next week is going to be exciting!

That's all for now!

NovWk5 - SPY - Sold!

Trade:
Sell: SPY NovWk5 PS 140/141 $0.05
Status: Filled on Saturday 12.07am (SG time)
Expiry: 30 Nov (US time)
Contracts: 5
ROI: 2.95%

Analysis:

The market is sideways tonight, but I decided to take a risk and sell a trade. I know it is pretty dumb to do that, but it looks relatively safe, and honestly, that's good enough for me.

So I just sold a put spread for $0.05, which is a decent premium. I think tonight it will expire worthless, but in any case, I have placed my contingent order (for cut loss) and at least I can now go to bed.

Hopefully I can make something back tonight. :)