Sunday, October 9, 2011

10-10-2011 outlook

We got a minor pullback Friday.  This was not totally unexpected after some strong up days. 

Monday we have the 2.8TD and 5.6TD cycles down.  We have the 11.2TD and 22TD cycles up.  So I am expecting these cycles to offset giving us mostly as flattish/sideways market.  This may offer some short term trading opportunities between 1145-1165.   I am looking for a chance to establish positions in QID around $48 and RWM under $33.  We will see....

Here is the SPX swing cycles:

GL traders.  Do your own analysis.


  1. Inlet,

    Although your cycles are offset Monday, on Tuesday & Wednesday all 4 could be be rising.

    So, do you feel those two days, the markets could be up, and thus establish short positions then?? I assume that is what you are implying.

  2. Doctrader -

    It is Tuesday afternoon before the short cycles bottom (offset ends). By Wednesday mid day the 11.2TD cycle turns down. So we may get some upside Tuesday afternoon and Wednesday morning.

    Wednesday afternoon the market should moderate and by Thursday morning we have the 2.8TD cycle turning down - so it looks like some weakness by end of the week.

    Best guess is - week is positive. I am looking for a top in the 1180-1200 range during the week as a shorting op. I am setting limit GTC orders for both QID and RWM at/near points previously mentioned.

  3. Right now I am positioned basically neutral. I have some longs, but have sold out of the money coverd calls on those positions.

    1) for each point those equities go up I expect to lose around 60 cents on the calls I have sold (so I get some upside unil strike hit).

    2) as time vaue decays I expect the call values to go down giving me a gain in a flat market.

    3) If equity price goes down I expect the call value to go down offsetting part of the equity loss (costs me less to buy back the calls).

    5) Unless I get called I will collect the dividends by around the first of November.

  4. Inlet I see every blog looking for a 1180-1200 top which to me seems like it will never come. Just an FYI we have AA earnings which will likely be bad as well as GOOG which has been showing much weakeness lately. Could we go up sure we could but when everyone is looking up it always seem we head down. I saw that Glenn Neely called a top on Friday so we will know soon if that was it.

  5. Inlet,

    Thanks. That is what I was overall expecting for the week although not sure we can get all the way to 1200. A lot depends on news out of Europe.

    I do understand the "covered calls" concept but have not sold mine yet.

  6. Inlet another link that is interesting:

  7. Mouth -

    Having not visited "every" blog I was unaware of that. Of the 2-3 bogs I visited I do not recall an upside projection. My projection is based on the DPOs (cycle amplitudes) I see on the charts of around 105-125 points off the lows.

  8. Aaaaand now Maund is calling for another big drop in silver haha. Taking SSRI profit here, cash is again my largest position.

  9. I am still holding my SVM calls. SVM is trying to break thru resistance at the 9'ish level. If successful, 10 could come quickly. The chart looks good so I am reluctant to close them. But, don't want to be a pig & get butchered either.

  10. Morla - cash is good.

    Doctrader - glad SVM calls working for you.

    I mentioned last week that the longer cycles (22TDs and 11.2TDs) may be again assuming dominance. I think we can say that is true after today's (with those two cycles up while 2 shorter cycles were down)strong move up.

    Established positions in RWM and QID today as I discussed.