A look at today's daily charts shows that some indexes have a bullish air about them. Perhaps all this talk of bottoms will stop being a fetish for a while. Also, I said before that the oversold indicator was likely to put a brake on the fall. Not because the market cannot fall further but just that technical analysts would expect some kind of rebound. The most telling moment was when the Dow hit 11150 bang on the nail and spiked up in what had all the hallmarks of automated computer trades.
So, the FTSE has hit the SAR and MACD is positive. One can never tell how far markets will move but the first test is the 30DMA at 5643, then the 5700 level. The whole thing could sink like a lead balloon if oil starts to rise again. There is one small crumb of comfort here in that the Chinese authorities have ordered all industry around Beijing to close during the Olympics, for fear of showing the world what a polluted capital they live in. So putting aside woeful corporate earnings, on just an energy point of view it is possible to have a month upwards.
TRADE
FTSE AUG 5750 CALL
BUY @ 60.3
The DAX has the same shape as the FTSE, the MACD is slightly positive but the SAR has not yet been taken out and stands at 6418.
The Dow also has the MACD positive but has hit the SAR on both the up and the downside in the last couple of days and I really would like to see it at 11400 before committing to more than excessive froth.
All three indices have come off their oversold indicators. The signs of an upswing are there in all three cases. However, I have only taken one call option out of the three. We should know this week if this is more than noise. Looking for FTSE above 5500, DAX above 6400 and Dow over 11400.
9 Jul 2008
Trading Day
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5520 call @ 14.0
took this on 3-min upswing with FTSE about 6495.
As FTSE fell took a put but sadly sold it quickly at a loss
5460 put BUY @ 12.5
SELL @ 11.4
LOSS = -1.1 pts
Oil rising a little to $138 hasn't as yet dampened European stocks.
Well, another day that sucks.
ReplyDeleteShould have sold the option much earlier. In the end got a lousy 9.6 pts for it.
Loss = -4.4 pts
The only bright side was a late trade.
FTSE Daily
BUY @ 5511.3
SELL @ 5529.6
Profit = +18.3 pts
However, as I let it run to the settlement, the trade was reopened.
BUY @ 5530.6
SELL @ 5522.8
Loss = -7.8 pts
That's the potential danger of leaving the trade open and having a roll-over enabled.
The Dow is hanging on to its 11331 under intense pressure as the dollar is once again everyone's favourite hot potato. This, however, has not sent crude oil floating off into space - not yet anyway. The Dow has tried twice to climb up to 11400 but someone's been dousing that level with some of that expensive oil as it just keeps sliding off it. The DAX hasn't even bothered to take a look at 6400. If I'm not careful I'll start talking about bottoms.