Can Anyone Predict Markets, Part 2

In this post the question was answered about anyone’s ability to predict markets – and what is the actual reality of it. So again, it can seem like someone with a lot of experience and competency can predict, but it is actually just about working hard,  doing great preparation, and PLANNING out your trades – AHEAD OF TIME. So today with an SPY call trade, look at all of the work, preparation, and planning I did for the trade in the SPY. All discussed IN DETAIL for you written up intraday on the charts.

First, in the premarket today I included the following SPY chart #1 CLEARLY marking off the res area – 267.04. That was a pivot area of some sort to me, some kind of a trade would set up for me based around that. Now, there was a solid daytrade selloff from that res. Anyone who is working hard at this, who trades options, who listens to me, could have had themselves a nice potential short-side trade based off of my included chart.

Premarket chart:

 

For myself, I did not get the setup that I wanted on the upthrust, so chose to use it in  a different manner. My analysis of the overall situation was not that great, BUT my analysis of the thing which matters the most, by far, the analysis of the trade setup – how, when, where – was outstanding. Initially discussed on chart 2.  LOOKING FOR A DIP SETUP. Preparing – AHEAD OF TIME – for a potential setup. I did not know if it would set up, but I was looking for a dip-type setup.

So I waited, watched, observed, look at chart 4, QQQ. APPEARS TO BE REACCUM, LOOKS LIKE A CUP/HANDLE, and I stressed, short-term. That analysis was excellent. It helped me to believe that the gap low supp would hold, and chart 5 put on the SPY calls, got lucky and bought the LOD. The parameters were worked out ahead of time, per usual, 20% stop, and so with the 20% rally sold 1/2 per usual, moved up stop to scratch per usual, discussed chart 6.

Chart 7-9, kind of hard to read, discussed SPECIFICALLY the nuances of working with option premium in real-time during intraday movements – the premium erosion – how to deal with it, knowing that the HOD in the SPY will equate to a lower call price. Also discussed – looks like a good close coming up, so should I hold or sell or sell part – discussed in detail specifically how I would approach it – PLANNING AHEAD –  what I would do, wanted to see AAPL get thru and close thru 175, it did not, so sold 1/4 in ah, and held 1/4 position overnight.

 

 

 

 

 

 

 

 

mm
About traderscott 1110 Articles
Trader Scott has been involved with markets for over twenty years. Initially he was an individual floor trader and member of the Midwest Stock Exchange, which then led to a much better opportunity at the Chicago Board Options Exchange. By his early 30’s, he had become very successful in markets, but a health situation caused him to back away from the grind of being a full time floor trader. During this time away from markets, Scott was completely focused on educating himself about true overall health and natural healing which remains a passion to this day. Scott returned to markets over fifteen years ago where he continues as an independent trader.

2 Comments

  1. I was eyeing that SPY short at the 267 level but missed it as well, wanting that push above it before entry.
    That’s a creative cup and handle but do see the reaccumulation sign.
    Helpful to see how you are watching the action on all the indexes for clues and not just the SPY that you intend to trade.
    Thanks.