Friday, October 17, 2008

Weekly Pivot Update

As expected, we got a range contraction this week centered on the PP. Rather amazingly, all 4 of the ETF basket closed at the PP and all four are showing momentum to the upside as the likely path of least resistance. While the upcoming week's range and % range remain almost identical to last week's, absolute delta has dropped significantly, especially in the XLF.
Also, for the first time in many weeks the upcoming pivots are very similar to last weeks, clearly a change in the otherwise virulent downtrend momentum. This leveling off may be an indicator of a bottoming process in progress, although if you viewed the Roubini video posted on Monday, you know his argument for the bottoming process to continue for some time.

Side note: I made a quick scalp in GE today, deciding to take my own advice from yesterday.
In at 19.34, out at 19.97 for a quick 30 minute trade. I should have stuck around longer, but had projects outside the office to take care of, so I walked off early.
But the thing really interesting about GE was in the Nov options, which I mentioned yesterday. Those same Nov 20 calls that closed at 1.83 yesterday closed at 1.30 today, down some .53 while GE was only down .19. Talk about premium decay. . .and the VIX was actually up 2.72 to 70 today (coming off an intraday high of 74.5). Go figure.

3 comments:

bill said...

Hi Bzb,

just wanted to share woodsheeder @ ibankcoin.com had some interesting strategy with double ETF. His entry is secret but he is posting regulary , exit is RSI2 based.

wanted to know if you use system development to develop anything other than qqqq/IWM. DO you trade rsi2 or any other system on individual stock market.

thanks

bzbtrader said...

Bill,
Since woodshedder chooses to keep his entries a secret I have no way to comment on his trades. I trade the Qs and IWM 80% of the time. Occasionally I do venture into otther ETFs, which is why I post a 4 ETF basket and I do trade single stocks sometimes, as per my GE posts for the past 2 days. I prefer the muted volatility of the ETFs as a rule, but when I see special situations, I'll often take a small position.

bzbtrader said...

Bill,
Since woodshedder chooses to keep his entries a secret I have no way to comment on his trades. I trade the Qs and IWM 80% of the time. Occasionally I do venture into otther ETFs, which is why I post a 4 ETF basket and I do trade single stocks sometimes, as per my GE posts for the past 2 days. I prefer the muted volatility of the ETFs as a rule, but when I see special situations, I'll often take a small position.