Luna $ Ticks

August 21, 2008

Cash and Popcorn

Filed under: Trading SPX SPY — moontrader @ 3:14 pm

Yesterday I posted a chart showing that the confirmation of a downtrend would be a close below DMA 25×5. This is the updated chart:

However, I also believe there’s no much room to the upside that worth going long. So, my strategy for now is to sit on my cash and patiently watch the market with a bowl of popcorn on my lap until I see a good entry point. Meaning either one of these:

  • A close below DMA 25×5 along with MACD sell signal confirming the downtrend
  • SPY 132.55 (stoploss right above it, around 133.5)

Since I’m trading options, this is all about timing, so it’s better to wait and catch a big chunk of a movement as it happens rather than grabbing the tip of a top and witness the options lose Theta before prices gain momentum to the downside.

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6 Comments »

  1. Another nice call, it’s amazing how it just touched the 25dma and corrected. Think we all have jumped the gun and got in too early, with the anticipated move, as you said, it’s worth the wait

    Comment by Jigsaw — August 21, 2008 @ 8:41 pm | Reply

  2. However, it’s the third day in a row that SPY is touching it, which shows some weakness. It’s flirting with the other side, which could happen soon. Usually, it touches the line and jumps back to the trend, which it didn’t do. If tomorrow prices revisit that line again, that might be the time to short.

    Comment by moontrader — August 21, 2008 @ 9:04 pm | Reply

  3. hi moontrader,

    what are you thoughts on the qqqq and skf in the next few sessions? thanks

    Comment by aymon — August 21, 2008 @ 10:47 pm | Reply

  4. The Spy getting up to 132.55 range seems to be the best senerio. That would have the VIX near the lows of the year again, pointing to another huge drop. Think Tim brought up the fact that September is a bearish month in the markets, another good sign.

    Comment by Jigsaw — August 22, 2008 @ 3:41 am | Reply

  5. Yes, Jigsaw, Tim pointed out about September being the bearish month in markets. And the good thing is that I have a Spiral Calendar proportion in agreement with that. Let’s see how the market plays out the next sessions. We’re almost in September.

    Comment by moontrader — August 22, 2008 @ 7:53 am | Reply

  6. Aymon, to give you a short answer, unless I see a clear indication of a downtrend move, I’m relatively bullish overall (not so much, though). My strategy is pointed in today’s post, and I think the best thing to do is to wait and catch a good opportunity. In a market like this, you can find some spots where you can have little risk, tight stops, and make great profits in just a couple of days. Patience is the key. But remember, you need to have your own set of criteria.

    Comment by moontrader — August 22, 2008 @ 8:00 am | Reply


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