Options Expirations in the DIA and support/resistance
There are a few ideas which will help you decipher where support and resistance are in the market. With the help of TradingView's powerful graphical ability and a subscription to some of the premium services, you can "see" levels of support/resistance in unique ways.
One I am showing you here is "volume profile" which you can set over a time range that you specify. I like to see volume in this way because I want to see volume in the current trend and this provides that for me. When I see a place where very little volume has traded I KNOW that level is important because one side of the market was so strong at that level that it didn't even trade much there. If you rally back up to a level where little volume traded, like the red box marked "LOW VOLUME RESISTANCE", then you can very safely expect a reaction, at least. Some may just call that level a "gap" or a "breakaway level" but I label it "Low Volume Resistance".
I also have plotted the options expirations on this chart, which can often be useful to know about because it is my belief that expirations are the summation of all of the speculators and hedgers "thinking" for that expiration cycle. Everyone closes out their positions or rolls them into the next expiration, but the act of rolling those position and closing positions exerts a force on the market that is useful to reference in future days of trading. Knowing that price gives you information and has you armed and prepared. To NOT know it is to ignore what is going on in the market.
So, I look forward to your comments and questions. And sorry if this looks like an advertisement for TradingView's premium services, but they are valuable and worth it.
Best regards,
Tim
9:47AM EST 9/28/2015
One I am showing you here is "volume profile" which you can set over a time range that you specify. I like to see volume in this way because I want to see volume in the current trend and this provides that for me. When I see a place where very little volume has traded I KNOW that level is important because one side of the market was so strong at that level that it didn't even trade much there. If you rally back up to a level where little volume traded, like the red box marked "LOW VOLUME RESISTANCE", then you can very safely expect a reaction, at least. Some may just call that level a "gap" or a "breakaway level" but I label it "Low Volume Resistance".
I also have plotted the options expirations on this chart, which can often be useful to know about because it is my belief that expirations are the summation of all of the speculators and hedgers "thinking" for that expiration cycle. Everyone closes out their positions or rolls them into the next expiration, but the act of rolling those position and closing positions exerts a force on the market that is useful to reference in future days of trading. Knowing that price gives you information and has you armed and prepared. To NOT know it is to ignore what is going on in the market.
So, I look forward to your comments and questions. And sorry if this looks like an advertisement for TradingView's premium services, but they are valuable and worth it.
Best regards,
Tim
9:47AM EST 9/28/2015
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