1/1/2008 – Looking for some clues

I am looking over some charts that have defined risk.


I am definitely not a bull right now. If anything I see a lot of chop. We are in a medium to long uptrend. But the short term seems neutral to bearish. And if a strong down move persists, there is little doubt that the medium term goes neutral to bearish.
How anyone can read Bullish into this would be beyond me. They must be fundamentalists with lots of Global growth hope, and have a very long term time horizon. Medium term (3-6 mos) it could be bull-flagging. And that very well may be the case. But my guess is that we are going to see some wild swings through the 1490 level.
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Also, there is a “bearish cross” (50/200 day MA) going on. There also could be a head and shoulders formation being created. And for the non-technical analysis types, “It could be a broach or it looks like a big red Tylenol.” Who knows really. And that is the fun of trading this.
I am looking for a range bound market, that will have some cherry picking markets with some defined risk trades. Also, the increase in Vol could be good for selling Iron Condors and looking for Calendar spreads. It is a sell vol environment.
I have been waiting for Nat Gas to gain confirmation to go long again. On monday that confirmation took place. The next level of confirmation seems to be over 7.50. Temps have definitely come down across the country. There was some weird action in the Nat Gas market in mid-december. Somewhat abnormal selling pressure. However, it has now seemed to stop.
Nat Gas spot
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UNG – How a stock play could play it. Although, I would wait for a break of the previous high, or a small pullback
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I am a bit upset with myself for not putting on a trade around 79 on the GLD. It seemed so easy, with very defined risk. It seems a little late (just like UNG) to put my first level on. I will wait for a break above old highs or a pullback near the trend line. I will also be looking at the Dollar index for clues.
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I continue to like this two month calendar. I currently have the Jan/Mar on for .53. This is trending right to the mid strike. I like it. I will be looking to roll the Jan to Feb as I approach or surpass the debit I paid for the trade, or before the Jan 15th earnings announcement. This could be another great trade.
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