Market Stucks in a Trading Range, “Cubes Speculator Bulletin” +30%

[Capital Essence NewsDesk] As we've noted in the previous Market Outlook, "despite Wednesday bullish reversal, the range-bound trading pattern remains intact", equity market closed mixed Thursday with both of the Dow and S&P 500 finished slightly lower as market digested Wednesday's huge gains.

As discussed yesterday and today morning on the "Cubes Speculator Bulletin", we've peeled off 50% of the QQQQ call options, which were grabbed @ early morning, into mid-day strength for a whooping gain of +30%. Once again, it's all about timing!

 

Editor's Note: below are just some trading ideas flow from our latest Headlines.

"Mid-day pull back" August 30, 2007 @ 11:43 AM

As expected, the "cubes" move higher and tested the area of the second upside target.

Breadth ain't very good looking, 1:1.5 positive on the NAZ. The market seems to be ready for a pullback.

We'll loose a leg [read: sell 50%] for now.

 

Once again, successful trading is all about the quack count. If the ducks align, hit 'em hard. When they don't, like this morning, we'll give you a ping so that you can take your profit and go play golf. Easy, even a 10 years old kid can do it.

 

The "Swing Trader Bulletin" also doing well as a majority of its holding continues to buck the trend and add on to the amazing unrealized gains. The Portfolio gain about +25% YTD.

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技術前瞻：股市仍未逃離險境

Editor's Note: this is the free edition of Capital Essence's Market Outlook. To receive the daily edition everyday before market open, please subscribe. It's now available at a monthly rate.

這是Capital Essence對2007年8月30日 (週四) 的市場技術分析。

債券評級機構穆迪(MCO)週三表示，美國主要投資銀行仍具有可支持其債務負擔的充足流動性，因此不會對他們的評級產生影響。受此激勵，股市在經歷了前一交易日的暴跌之後，於週三強力反彈。

我們在之前的"Cubes Speculator Bulletin"中曾指出："多頭表現勇猛，已將大盤推向了高點。波動幅度仍將很大…股市將一直保持上揚直至收盤。"週三，在股市從高點回落的時候，我們了結了納斯達克100指數EFT (QQQQ)看跌期權的全部倉位，共計獲利70%以上。我們為什麼選擇中止這筆交易呢？一般來講，如果支持最初判斷的種種理由出現動搖，就應該趕緊離場。

來看主要股指：

上面是標普500指數的短期日線圖。週二崩盤之後股市沒有跟著再跌。這可能是因為空頭在週二的大幅拋售之後已經筋疲力盡。儘管如此，在該指數突破8月8日高點的關鍵阻力位——約為1504點——之前，我們仍然沒有脫離危險。目前支撐位約為1410-1370點。

上面是道指的中期周線圖。和標普500指數類似，該指數昨天同樣在日線圖中形成了看漲的反轉實體。儘管如此，正像前面所說，在該指數突破8月8日高點的關鍵阻力位——約為13700點——之前，空頭仍將佔據上風。

總結：雖然週三股市出現了牛勢反轉，但仍保持區間波動的交易形態。事實上，我們預計該形態至少將持續到9月的第一個星期。

Range-Bound

Editor's Note: this is the free edition of Capital Essence's Market Outlook. To receive the daily edition everyday before market open, please subscribe. It's now available at a monthly rate.

Good Morning. This is Capital Essence's "Market Outlook" (the technical analysis of financial markets) for Thursday August 30, 2007.

Upon the heels of Tuesday massive sell-off, stocks bounced back in noticeable fashion Wednesday as a sense that the world is still flooded with liquidity kicked in – Moody (MCO) said that leveraged loan commitments of major US investment banks do not have negative rating implications as liquidity remains sufficient.

As discussed on the previous "Cubes Speculator Bulletin" – "the bulls had put on the brave face and pushed the tape higher. Breadth remains strong …The tape will stay this way [read: positive] into the close" – we've peeled off the entire NASDAQ-100 ETF (QQQQ) downside puts into Wednesday mid-day weakness for a total gain of +70%. Why? Why did we choose to dance our way out of the trade? General speaking, successful trading is all about the quack count. If the ducks align, hit 'em hard. When they don't, take your money off the table.

Let's take a look at the major index charts:

(Click on image to enlarge)

The Standard & Poors 500 Index (daily) chart above addresses a short-term frame. No downside follow-through to Tuesday's breakdown. This could due to the fact that the bears could have exhausted themselves after yesterday massive sell-off. Although, we ain't out of the wood until or unless, the index trade above key resistant at August 08's high, about 1504. Support is about 1410-1370.

(Click on image to enlarge)

The Dow Jones Industrials Average (weekly) chart above addresses an intermediate-term frame. Similar to the S&P 500 Index, the blue-chips index had also printed a bullish reversal bar on the daily chart. Although, as noted above, the bears continue to have the upper hand until or unless the index manages to trade above key resistant at August 08's high, about 13700.

Bottom line: despite Wednesday bullish reversal, the range-bound trading pattern remains intact. As a matter of fact, we expect it to last until, at least, the first week of September.

Until next time, good luck.