Friday, October 23, 2009

3 Outside Day Down

I have been doing very little trading or even blogging participation for around 2 weeks.  My theory---this market will keep going up until it decides not to keep going up.   But being long has extreme risk, no need to play that game except for some calender spreads I did selling puts near month, and buying puts June 2010. 

Wednesday, I took a position in SSG, giving credit to Tim Knight for the original idea, and further confirmed by my own charts that confirmed the position strongly.   This is a double short on Semi-Conductors.

Also took puts on MS today.  Paid 1.90 and it immediately moved to 2.10 which is nice.   Now I can set a contingent stop on it....if MS equity price rises to X.XX, the ask 1.95 for the puts.   This should lock in a profit.

I rarely buy front month puts, you should always get at least 60 days to stay out of Theta Burn.  If you don't know what Theta Burn (TB) is, you should not be playing options.

Everytime I do an update or upgrade to the Chart of Charts, it take several hours of fairly intense number crunching.  I missed last weekend, but an inspection of the data told me enough without plotting definitive up or down trend. 

I will try to update Chart of Charts this weekend.  It shows an annual return in the low to high 50% range.  It keeps you out of trouble, minimizing losses and getting most of the upside.

The SPY put in a CONFIRMED 3 Outside Down Day (I noticed this possibility on Wednesday, and published here).

Today confirmed it.  However, this is kind of stretching the data since I am using a 3 day aggregation period for my candles.  Quite unorthodox. 

And for more info on these candles, check out these sites.

3 Outside Down Day -- See Below, one of the Strongest Patterns

Finally, Bulkowski torturing the data relentlessly (but no water boarding).

3 day candle, 3 Outside Down, 3 Doors Down.....and bulls may be looking to get their  "Nickelback"--If you understand the sequence of logic in that sentence, you are either quite hip and smart, or maybe just need some counseling.

And since we are on that subject, the band Nickelback owns one of the siblings  of my cherished little puppy dog.  Mine is the small one in the picture,  the big one is her older brother from a different litter (also my dog).

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