Education Center
You often refer to “up-trendlines” and “down-trendlines” on stock and index charts. How are they determined and is there any site on the Net where these can be plotted out?
We determine the up and down trendlines on our charts. In a very general nutshell, you draw an up trendline connecting a series of higher lows and a down trendline connecting a series of lower highs. That creates a line that is trending higher or lower. Properly drawn trendlines represent support or resistance points for […]
StockCharts.com looks useful but does not appear to be real time. Any references for real-time charting?
Real time charting takes you to another level than your ordinary charting service on the internet. BigCharts has delayed stock charts though the index charts are close to real time. If you have an online brokerage account, check with it. It may have an advanced feature for clients that allow realtime charting.
What rationale do you use to decide on both the Expiration Month and the Strike Price for the options you list?
We like to buy enough time to do the job, and we tend to err on the side of a bit more time just in case things do not go as we want. They are less volatile than current expiration options. For calls on individual stocks we prefer two months or more. For puts on […]
In the last couple of issues you have pointed out stocks that you refer to as “topping”. Can you please explain this and the criteria that you use to identify them? Should this be a signal to sell or not?
Good question. Topping characteristics come in different forms. One is after a strong move higher when the stock has doubled or more, the stock starts to show high volatility in the form of larger intraday moves up and down than normal, the moves coming one in rapid succession: one up, one down, etc. Volume usually […]
Over the last week or so my girlfriend and I have made a ton of money based on your [plays] on the SOX and OEX. Thank you so much. It appears they pretty much move with the NASDAQ only with great price swings. Which leads me to believe (for the most part) that as long as we have a handle on the direction of the [Nasdaq] then we can play the indexes accordingly. My questions are these, since you don’t always include the indexes in your reports, are there some rule of thumbs for playing them, i.e., resistance levels, open interest, etc.?
First, we are trying to cover the indexes more and more for all of our subscribers. In this market, the indexes can give some of the best payoffs for the very reason you have pointed out: if you figure out the market direction, you win with the indexes and are not as subject to individual […]
[With respect to the ARMS index] the day count range that you wrote about [4 days to 20 days on a close above 1.5 and 1 to 7 days on back-to-back readings above 2.0], is that calendar days or market (trade) days? The NASDAQ Composite Index data and many NASDAQ companies did not exist for us to chart back to 1974. Should this be applied only to Dow Jones Industrial-30 stocks?
The day count refers to market days. The ARMS index analyzes data with respect to the Dow and not the S&P 500 or the Nasdaq. The technology components of these two indexes can thus lead to different results than the Dow based on the ARMS index, especially in a situation such as this where there […]
The September 40 puts your Broadcom play are deep in the money. Why not buy something at the money, which looks cheaper–at least on the surface?
When playing the downside the moves down can be fast and the moves back up can be fast as well. We are looking for movement as well as some protection. What do I mean? Deeper in the money gives us a good delta, and hence better movement on the option when the stock moves. September […]
How can I get an intraday quote of the VIX?
eSignal and other real time services provide this. The information is also available on the web. If you have an online account, you can get the quote (symbol is usually $VIX) with the online broker.
After playing [the indexes] for the last few weeks with much success it is clear the SOX is the most volatile. My question is aside from the pricey options, are there any other negative factors to them?
Not as far as we are concerned. One of the things we really like about the SOX is that it acts like more than just one stock but less than a big index. In other words, it tends to give more indications of its immediate moves just as an individual stock does without the risk […]
Where can I find the A/D ratio and the new highs and new lows each evening after the market close?
There are many places the information can be obtained. The Nasdaq and NYSE internet sites have the closing figures for their respective indexes. www.NYSE.com and www.nasdaqnews.com.
