MARKETVOLUME®

www.MarketVolume.com

 
Best Trade Newsletters
Go to Best Trades Archive  

"Best Trade" Newsletter (December 12, 2007)

This newsletter is intended for educational purposes only it does not constitute trading advice, nor does it make or imply any market trend predictions. This newsletter illustrates examples based principally on MarketVolume® index volume indicators and advance/decline (AD) indicators. We do not mean to imply that you should follow our exact trades, but rather wish to suggest that you may make use of our analytics to develop your own trading style.

This "best trade" is a continuation of previous "Best trade" newsletter posted (sent to MV subscribers) on December 11, 2007.

Security Return
Calls (SPY - SYHBU) +$2,000 +22%

Below you will find a Table of Trade Motivations and a chart showing the trades, including detailed trade calculations.

 
Chart 1: S&P 500 5-day Chart
 

In Table 1 - a 'Table of Trade Motivators' - we show the motivating factors that led us to take the above trades.

Table 1: Table of Trade Motivators

Date Trading
Decision
Motivation
12/11/2007 Buy Calls Today's precipitous drop was associated with a huge buying surge. In fact, today's volume output exceeded the average volume generated over the past nine sessions by 27% on the Dow, by 19% on the S&P 500, and by 5% on the NASDAQ 100. The largest volume surge was noted on the AMEX; here, today's volume output exceeded the average volume production over the last nine sessions by 35%.

Advance/decline volume and issues ratios hit critically low levels. We saw following readings:  0.04 A/D issues ratio and 0.09 A/D volume ratio for S&P 500.

12/12/2007 Sell Calls The dominant buying surge that was created yesterday afternoon following the Feds announcement on interest rates manifested in a strong gap up opening on the NASDAQ 100 today; we found that it is safe to sell previously bought calls.
12/12/2007 Buy Calls Late in today's session, we witnessed another downswing on the major indexes. It generated a huge amount of buying volume. It is our assumption that the cumulative buying volume produced from the buying surges seen over the past two sessions could soon prompt a market recovery from Tuesday's selloff and potentially lead to a resumption of the midterm uptrend.

Below we list in detail the actual trades made, along with the netted returns achieved.

Table 2:
Details of the trades

Date Trade Strike Expiration Contracts Contract
Price

12/11/2007

Buy SYHBU Calls $151 Feb, 2008 20 $4.45

12/12/2007

Sell SYHBU Calls $151 Feb, 2008 20 $5.45

12/12/2007

Buy SYHAT Calls $150 Jan, 2008 30 $3.15

In this example, we have based our  SPY options trade on the S&P 500 volume indicators. Using the principles outlined above, you may wish to trade options on the SPY, ^SPX, DIAMONDS (DIA). It is also conceivable that an analysis similar to the one shown below could be used to trade options based on the NASDAQ 100, Russell 2000, and other indexes.

©HGH Associated Traders

Important: The analysis results presented in the "Best Trade" may differ from the outlook presented in the daily Market Commentaries. Results may also differ from the trading signals generated for Exchange Traded Funds (ETFs), or from any other research and analysis efforts shared with our members. These are products developed by independent research teams, delivered to MarketVolume® members. While sharing some research results, these autonomous research teams may use different systems and may have dissimilar market outlooks.

Disclaimer: This newsletter is intended for educational purposes only it does not constitute trading advice, nor does it make or imply any market trend predictions. This newsletter illustrates examples based principally on MarketVolume® index volume indicators and advance/decline (AD) indicators. We do not mean to imply that you should follow our exact trades, but rather wish to suggest that you may make use of our analytics to develop your own trading style.

 

2007
Date Indicator
December 24, 2007 SPY Options
December 20, 2007 SPY Options Trading
December 12, 2007 SPY Options
December 11, 2007 Trading SPY Options
November 30, 2007 SPY Options Trading
November 23, 2007 SPY Options
November 12, 2007 SPY Options Trading
November 6, 2007 SPY Options
October 16, 2007 QQQQ Options
October 11, 2007 QQQQ Options Trading
September 28, 2007 QQQQ
September 24, 2007 Trading QQQQ Options
September 12, 2007 QQQQ Trading
September 10, 2007 Options Trading
August 21, 2007 Trading QQQQ
August 16, 2007 QQQ
August 8, 2007 Trading Options
August 1, 2007 QQQQ Options
July 25, 2007 QQQQ Options Trading
July 18, 2007 Options Trading
July 17, 2007 Trading QQQQ Options
June 21, 2007 Trading Options
June 18, 2007 QQQQ Trading
May 17, 2007 QQQQ
May 16, 2007 Trading QQQQ
May 11, 2007 QQQQ Options
May 9, 2007 QQQQ Options Trading
May 1, 2007 Trading QQQQ Options
April 26, 2007 QQQQ Trading
April 17, 2007 Trading QQQQ
April 3, 2007 SPY Options
March 30, 2007 SPY Options Trading
March 26, 2007 QQQQ Options
March 23, 2007 QQQQ Options Trading

Disclaimer | Privacy © 1997-2013 MarketVolume.com. All Rights Reserved. SV1
Charts
Stocks & ETFs
Indexes
Advance Decline
Knowledge Base
Trading Systems
News

© 1997-2014 www.MarketVolume.com. All Rights Reserved.