Price is down to key support at 93.37 here @ 12:47PM
Put-call volumes suggest heavy put buying.
VIX surge to 51.6 from 48 suggests near panic.
So, if we can panic while we fell to support, then we should buy.
RISK = 1.00 pt in DIA.
EXIT: 1.00 pt profit.
Raise stop 1.00 pt after 30 minutes.
12:48PM NOW
93.37bid-93.38 ask
Wednesday, November 5, 2008
Market Is Extremely Weak
I am glad we have NOT gone long here.
Will await a signal to go long or short.
The DIA is off nearly 3 pts from yesterday's high, which is quite a drop.
Something may set up here shortly.
12:32PM DIA 93.69 last
Will await a signal to go long or short.
The DIA is off nearly 3 pts from yesterday's high, which is quite a drop.
Something may set up here shortly.
12:32PM DIA 93.69 last
BEARISH SIGNS SHOWING IN FIRST HOUR
10:40AM right now.
The first 30 minutes of action revealed heavy call buying, which when coupled with the drop in the DIA in that time window = is extremely bearish.
The next 30 minutes has shown heavy put selling, which when couple with the fact that we are still DOWN on the day, is even MORE BEARISH THAN EXTREMELY BEARISH.
The question I have here is exactly how to put this info to work:
This could take 3 hours to set-up or this could be a sell signal right here- I'm tempted to just put the sell signal right on, right here and take the risk that it is wrong because I don't want to miss the decline.
OVERALL - VIX is 47.5 now, which shows tremendous illiquidity is still present in the market = THEREFORE, I'm aware that this signal could be wrong or early.
It is what it is - we never know.
I definately don't like the signs that I see here.
SELL DIA 95.34 bid here now at 10:44AM EST.
RISK: 1.00 PT.
STOP LOWERS TO BREAKEVEN after 1 hour (11:44AM).
It is possible that we don't break until the close, then fall dramatically overnight - that is the likely scenario as I see it from here (intuition) to keep our "intra-day strategy" from capturing the profit.
95.45 bid now.
95.35 bid....
95.27 bid...
95.35 bid...
10:47AM
The first 30 minutes of action revealed heavy call buying, which when coupled with the drop in the DIA in that time window = is extremely bearish.
The next 30 minutes has shown heavy put selling, which when couple with the fact that we are still DOWN on the day, is even MORE BEARISH THAN EXTREMELY BEARISH.
The question I have here is exactly how to put this info to work:
This could take 3 hours to set-up or this could be a sell signal right here- I'm tempted to just put the sell signal right on, right here and take the risk that it is wrong because I don't want to miss the decline.
OVERALL - VIX is 47.5 now, which shows tremendous illiquidity is still present in the market = THEREFORE, I'm aware that this signal could be wrong or early.
It is what it is - we never know.
I definately don't like the signs that I see here.
SELL DIA 95.34 bid here now at 10:44AM EST.
RISK: 1.00 PT.
STOP LOWERS TO BREAKEVEN after 1 hour (11:44AM).
It is possible that we don't break until the close, then fall dramatically overnight - that is the likely scenario as I see it from here (intuition) to keep our "intra-day strategy" from capturing the profit.
95.45 bid now.
95.35 bid....
95.27 bid...
95.35 bid...
10:47AM
Tuesday, November 4, 2008
VIX HAS FALLEN TOO FAR = SELL SIGNAL
[11:16:43 AM] Tim West says: I am very close to a "VIX HAS FALLEN TOO FAR" signal to go the opposite way
[11:16:59 AM] Tim West says: VIX is down o 45 from 50 at 10am...vs 55 yesrday
[11:18:50 AM] Tim West says: 10 point moves in VIX are pretty rare = a sign of extreme changes of opinion
[11:19:44 AM] Tim West says: and a 15 point move from yesterday's high of 60 in VIX = even more extreme
[11:20:11 AM] Tim West says: extreme changes in opinion can leave a vacuum under price action
DIA @ 96, now 95.84 over this time frame....
SELL SHORT DIA, 96.40 stop, vs 95.90 last
TARGET 95.00 (gain of 0.90 pt)
11:24AM NOW
[11:16:59 AM] Tim West says: VIX is down o 45 from 50 at 10am...vs 55 yesrday
[11:18:50 AM] Tim West says: 10 point moves in VIX are pretty rare = a sign of extreme changes of opinion
[11:19:44 AM] Tim West says: and a 15 point move from yesterday's high of 60 in VIX = even more extreme
[11:20:11 AM] Tim West says: extreme changes in opinion can leave a vacuum under price action
DIA @ 96, now 95.84 over this time frame....
SELL SHORT DIA, 96.40 stop, vs 95.90 last
TARGET 95.00 (gain of 0.90 pt)
11:24AM NOW
10AM (post-dating a signal here)
From my Instant-Messaging today:
BUY SIGNAL: 10AM:
Target: 1 DIA pt.
Stop: 1 DIA pt.
Target reached already:
Awaiting new signal setup.
11:09AM now as I type.
CODE: CV,VD
BUY SIGNAL: 10AM:
Target: 1 DIA pt.
Stop: 1 DIA pt.
Target reached already:
Awaiting new signal setup.
11:09AM now as I type.
CODE: CV,VD
SEP-OCT RESULTS = GAIN OF 26%
The profitability of this analysis is so strong that I am losing interest FAST in giving it away - so I will be working on how to design and charge for this advice.
September and October produced gains beyond my expectations and given the very high volatility in the market averages, it is logical to assume that returns are higher than normal.
However, the gain of 27 pts in the DIA when the average DIA trade price is 101 implies a gain of 26% for those two months. The largest drawdown was 2%. The profits were 18 pts on BUYS and 9 pts on SELLS, which is even more interesting given that the DIA dropped over 25% over the time period of this analysis - from DIA level 114 to a low of 85.
This is perhaps the largest reward to drawdown that I have ever seen with the exception to the Equity Market Neutral Fund that I managed in 2003-2004 which had a 1% max drawdown on a 13% return over the time window of that fund.
The INTRA-DAY ONLY time frame of this strategy is also extremely interesting in that it removes the higher risk, although higher potential of the overnight movements of markets. Lately the measurement of first 30 minute movement in the market is EXTREMELY HIGH.
On average, this method is signalling approximately 2-3 times per day and I am doing the analysis starting at 10AM and then in 30 or 60 minute increments. It is challenging to build the blog on every hour to update any changes and there are certainly enough distractions, but the overall performance is still extremely strong given this reality = that all signals were not taken.
I chose to stop publishing last week due to my interest in building the plan to charge for this lucrative advice.
Tuesday, November 4th 2008 11:00AM
The
September and October produced gains beyond my expectations and given the very high volatility in the market averages, it is logical to assume that returns are higher than normal.
However, the gain of 27 pts in the DIA when the average DIA trade price is 101 implies a gain of 26% for those two months. The largest drawdown was 2%. The profits were 18 pts on BUYS and 9 pts on SELLS, which is even more interesting given that the DIA dropped over 25% over the time period of this analysis - from DIA level 114 to a low of 85.
This is perhaps the largest reward to drawdown that I have ever seen with the exception to the Equity Market Neutral Fund that I managed in 2003-2004 which had a 1% max drawdown on a 13% return over the time window of that fund.
The INTRA-DAY ONLY time frame of this strategy is also extremely interesting in that it removes the higher risk, although higher potential of the overnight movements of markets. Lately the measurement of first 30 minute movement in the market is EXTREMELY HIGH.
On average, this method is signalling approximately 2-3 times per day and I am doing the analysis starting at 10AM and then in 30 or 60 minute increments. It is challenging to build the blog on every hour to update any changes and there are certainly enough distractions, but the overall performance is still extremely strong given this reality = that all signals were not taken.
I chose to stop publishing last week due to my interest in building the plan to charge for this lucrative advice.
Tuesday, November 4th 2008 11:00AM
The
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