Another red day! Well it was hedge fund redemption day and a Friday. Two things in favor of selling off. As option traders, we would always want to be out of the market on the last weekend before expiration. Not sure, if that would affect the underlying security’s price or not.
Sweet rally! Wow nice on an unexpected day. I was expecting that either tomorrow (Friday) or Monday next week but mostly Tuesday. In my real trading account, the funds are frozen in a bad call with being all in. So can’t do anything until that frees up. There was a standing sell order set to sell my calls at .05. The day’s range shows to be 0.01 – 0.05. However, those calls didn’t sell. Don’t know what to say about that.
In a practice account, I’m up $2,000 dollars. From an initial capital of $5,000. Bought some AAPL Nov 95 calls, Some MSFT Nov 20 calls, and 1 GOOG Nov 300 call. Those all made good money today.
Market analysis is a weird thing. Most online traders are predicting an green tomorrow. It would seem to be likely.
This market is just getting more and more volatile. In reality, I keep hoping for an upturn soon. Mainly because of the MSFT calls I’m holding, but it hasn’t happened yet. On the other hand, it was over two weeks ago that I was hoping that MSFT would be way up by now. I was confident that these calls would not only be profitable but might even be doubling the investment. But I hadn’t ever seen the time value corrode in realtime before. So here we are and the time value is dropping fast. My sell to close order hasn’t executed in days despite constantly being lowered. An idea occurs to me. Given time, I could send more money to the brokerage and buy crap load of calls at .01 and then my .44 average would really be down to .1. Then I could get out at .05 and it would still save me half my original investment. However, while buying 200 contracts is not a problem at .01 (it’s only 200 dollars), the per-contract commission per trade will be is $100 (at .50 per contract). So there’s a big loss on that front. It would seem to be better to just leave it alone.
DOW closed lower on higher volume. Scary. I could have played some DXD calls or something like that and it would actually had made money. However, with each pullback in the downturn, it seems as if the bears have beat down enough and a rally is starting. Then the fear of losing money kicks in. Then it falls again. Only showing how much money could have been made. Since the market has been down for so long, it seems as if a good rally will take place soon enough. Simply because it has been down long enough and lot of investors and traders would be eager to get back to work. However, that’s what I thought two weeks ago and a rally took place but the markets fell right back.
The one comforting thought in this is that the DOW still made a higher low than the previous low. RSI headed down, Buying pressure turned into big selling pressure. Still less selling pressure than before. This candle was almost a black marubozu. Which is strong down candle. So it would seem a little pullback tomorrow should be in order. But again, some numbers are to be released tomorrow. Those might have already been priced in today’s fall or might still affect securities when released.
Well, the market went up in the morning but couldn’t just take all the bad news. Circuit City is doing under financially. It is not known yet, if the company will make it out of bankruptcy. Most companies do not make it out. Then there is GM. They are asking for money. They are almost as good as bankrupt. Not quite, but almost. They’re saying that they do not have operating funds for the next year. Some one said, this is the best time to buy GM. Nope! Why would you spend your money when:
Then some investors fear the China deal for their financial package is not good enough and will let the Chinese economy crash as well as the rest of the ones that are crashing. Lot of red numbers!
Tomorrow, seems to be set to go up a little. However, someone said the job reports and other numbers come out tomorrow. If those aren’t nice, it might be Wednesday before we see a green day.
OK, the market is still not liking any given direction. Just trying to make up it’s mind.
One day, red the next green. This looks promissing however, on a Friday green doesn’t happen often. Don’t know what to think at this point.
MSFT is still not looking all that great.
P.S. This post is backdated to 7th. The notes are from the 7th, the post is made on the 10th.
Well, lot of money was made by someone! Big moves always mean someone is making money. When there is someone selling, there’s always someone buying. Not necessarily an individual investor. It might be a fund that buy at a lower since they’ll hold for longer term and might be buying dividend paying stocks. Might also be that the market makers or specialists on exchange floor are buying. But when the market makers and the specialists buy, they will make sure they get a good price. They provide liquidity. Also probably volatility.
Anyway, the MSFT calls are at this point 100% guaranteed to not be profitable. However, what is the minimal loss that I can get out with. I have almost wiped my original investment. That was one of the rules to not lose the original capital. Now, I will have to attempt to guage and estimate a correct price that is possible and attempt exit around that. I will most probably also have to fund the account again.
Never, go all in!
And then there’s the MSFT.
Aside, from the overall market direction, the selling pressure on MSFT seems to be cooling off. So hopefully, it will make a move up in the near future. I also have some MSFT share in a different account. Those are just for holding.
P.S. This post is made on Nov. 7th morning but backdated for continuity.
So the post election market was a down day. It’s probably not due to the election result or anything. Might be that the pre-election gains were on an optimistic note and this was the market giving those back. Still holding above the 9K mark. Only tomorrow will tell which way the focus is.
Also MSFT continued with it’s dismal performance. So those options are worth even less.
First, of all there’s a lot of stuff that I’ve been tracking. The market charts (Indices), MSFT chart and now a watchlist. It will get a little confusing discussing previous day’s watchlists and posting new ones and discussing charts and all. So hopefully, I can have a clear format and keep it simple.
The markets did well today. There was something of a pre-election downturn but in the end, I guess most people decided it was still time to buy.
On the other hand, let’s see how MSFT did. It seems to have done well for the day. RSI is already making higher lows. MACD seems to be making level lows and CMF is lessening selloff pressure. Hopefully, it will allow the stock to rise higher and cause the option premiums to gain value. Not holding much hope of getting higher. But it is still nice to know that technicals point to a climb higher. However, on the fundamental side, the election could swing the market either way tomorrow. Most people says it should go higher on election rally. Tomorrow will solve that mystery.
Market Analysis – Oct. 30th.
The market closed green today. Quite a fall in the first 3 hours. But then a steady rise until the very end. Last few days, the market does rally in the second half of the day but then does a sharp decline in the last 1 hour. Yesterday’s sharp decline didn’t turn around. Today’s decline turned around just fine, without any issues. This is the second close above the 9K mark in the last few days. Doesn’t mean much in and of itself. It will have to close above 9K mark consistently for it to be a good support point. For now it seems to be fine.
Most securities that I’ve been watching closed green today. Except, MSFT. Which is the one I hold some calls on. If the market continues, the uptrend, MSFT should rise as well. Without issue. However, hypothetically, if the markets were to decline, then those calls wouldn’t be worth much. Not betting on those to fall. So will continue to hold for now.
Let’s see the MSFT chart. It is still showing the CMF is indicating some sell off pressure.
Although, it is pixel-splitting, the MACD line seems to be above the trigger line. There seems to be a little red dot visible below the blue line. But that’s not as much as technical thing as wishful.
Lastly, the DOW did well.
MACD shows some divergence.
Looking further into the MSFT chart, here’s some analysis.
There’s two resistance (trend) lines. The blue one is the first. The brown is the second. The brown one would seem to be the more prominent one for the moment. The CMF shows that the buying pressure is letting up. This doesn’t mean a buy signal by itself. However, it would show that heavy selloff is behind us.
The RSI is still sort of high but bent downwards at the close. The MACD is touching the trigger line but hasn’t crossed it yet. If tomorrow in general is a green day, it should help.
We will see.