DaddySawbucks
Short

Probably at or near Dow top for short entry

DJCFD:DJI   Dow Jones Industrial Average Index
Wave model projected 25076 on Dow got to 25070. Divergence in indices suggests flight to quality - dumping tech to buy blue chips, nervous toppy behavior.

Can go higher but is due for a pullback and possibly a substantial drawdown. Wave C could carry to 23800 or lower.

Could get a shooting star Tues to confirm topping. Other indexes already moving lower and global markets showing weakness. Reactionary wave B is ending- soon.

Shorts placed and puts purchased at or above this price level are probably about lowest risk you can hope for in this game of high stakes risky business.

Good luck!

PS An SPX trader has observed that over past 3 months wave highs occurred at New Moon ; Wave lows follow 2 weeks later at Full Moon- neat! Let's see if it holds...

Jul 18
Trade active: a .618 Fibo retracement = 25237; .786 = 25394, look for reversal pattern confirmation
What put options strike and expiration are you thinking of for this short? Also, good luck!
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@tipere445, DIA Aug 250s were ~$3.25 -3.45 today. 31 days left in it and just a sneeze out of the money. Safer bet to get Sep 255s in the money but you pay more than twice as much.
I buy in the money strikes when I'm less confident but this wave is cresting now and I feel good odds on the trade. Target DIA 238 would put these contracts at $12 by expiration.
The downdraft will take about 2 weeks to cycle (by the Full Moon, lol).
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@tipere445, Has run up 1100 pts since low at 24040 and green on 8/9 past sessions. Last time we saw this was the breakout in May. It went up 11/13 sessions on that run (look back); If this is not at the top, we are really close to it. SPX Fibo suggests top right here at 2809 and Dow has gone beyond the 0.5 now 40 pts above it; all indexes are ripe for a pullback. Could it get to 0.618? Sure but we saw that on 11 June. Still convinced we forming a right shoulder here. Look for a SS Doji on Wednesday. This wave crest looking a lot like mini-version of the May rally that carried to 25404. If i bought the puts a day too early, just wait a week you will more volatility soon. Always looks so rosy just before the break, lol.
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@tipere445, When we get reversal pattern confirmation (candlestick - shooting star, bearish engulfing, dark cloud or bearish Harami, &tc), I'll go back in and buy 30-day or longer contracts about $2-3 in the money. These perform the best and have less risk of total loss than out of the moneys, which have no intrinsic (real) value whatsoever. As the index approaches the strike you get slight increasing time value but after crossing into the money over the strike price, for quite a while you are only trading time value premium for intrinsic real value, so the price changes very little (low beta). Buy contract already in the money so all the change in price marks pace with the index. Avoid trading the 'weeklies' as their liquidity is low and you rely on the market makers to give you a trade - you get stuck with the market bid/ask and spreads are wide, can be 10% of the option price.

Feel badly your puts went worthless, I sold my August contracts for .80 cents on $1 spent and recovered most of the premium but it sounds like you had Julys expiring - this week? Ouch! Buy yourself more time brother!

Options are so volatile the price we pay and the entry point are everything. If you come in to the market a week early you get killed. Better to watch for the clear pattern signal and come a little late to the party!

BTW I typically trade between 50-150 contracts so the leverage is huge and it really hurts when you guess wrong. Good luck!
Reply
tipere445 DaddySawbucks
@DaddySawbucks, thanks for the tips!
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