Stock Market Following and Stock Trading Tips

 The Secret of Making Money in the Stock Market

June 28th 2007, using Chart 4 Crests, the Price Standard Deviation Line entered the High Probability zone in the upside. The high for that day was 26.2460 and again this is a very critical value in our trading. It's time to get out. We know what we want. If the market was to hit this high of 26.2460 the next day, then from there we shall follow it tick by tick so that we can get out at a price above 26.2460. This day a high of 26.2656 is registered and we got out with a profit at between 26.2656 and 26.2460. Then we set neutral positions biased to the upside and stop loss orders set accordingly.

July 20th 2007. using Chart 3 troughs,  the Price Standard Deviation Line entered the High Probability zone in the downside. The low for that day was 26.7464 and this is a very critical value in our trading. The longer trend, Chart 1 Uptrend was uptrend as the price line was above the Variable Equilibrium Line. The highest high of the current ending crest was higher than the highest high of the previous crest. Armed with our low of 26.7464, we now wait for this low to be broken so that we get filled. The next day  we get a low of 26.8841 which was higher than our low. We open half of our positions close to the close of the day which was 26.9058. The next day we get a low of 26.3403 and get filled at between 26.7464 and 26.3403 for the remaining half of our positions . The stop loss orders was based on chart 1 uptrend which had come very close to price line and was set at 26.0420.

On July 26th 2007 our stop was penetrated as the market went to a low of 25.6381. All of our open positions were exited at a small. Since the Variable Equilibrium Line has been penetrated by the price line, then the market is a downtrend.

On August 7th 2007, and using Chart 4 Crests,  the Price Standard Deviation Line entered the High Probability zone in the upside. The high for that day was 2577.81 and this is a very critical value in our trading. The longer trend, Chart 2 Downtrend was downtrend as the price line was below the Variable Equilibrium Line. The lowest low of the current ending trough was lower than the lowest low of the previous trough. Armed with our high of 2577.81, we now wait for this high to be broken so that we get filled. The next day  we get a high of 2627.75 and get filled at between 2577.81 and 2627.75.  The stop loss orders was based on chart 2 downtrend which had come very close to price line and was set at 2670.99.

August 10th 2007, using Chart 3 Troughs, the Price Standard Deviation Line entered the High Probability zone in the downside. The low for that day was 2503.16 and again this is a very critical value in our trading. It's time to get out. We know what we want. If the market was to hit this low of 2503.16 the next day, then from there we shall follow it tick by tick so that we can get out at a price below 2503.16. The next day a low of 2541.35 is registered which is higher than our low. The next day, August 14th a low of 2499.12 is registered and we got out with a profit at between 2503.16 and 2499.12. Since the market is in a downtrend, we set neutral positions biased to the downside and stop loss orders set accordingly. The current market position today, Wednesday, August 22nd, 2007: - establish short positions and or vertical spreads with puts on Nasdaq (read QQQQ and $NDX) biased in favour of the downside at 2530.70 or higher. Set the stop loss at 2641 and this stop loss will be adjusted accordingly with time. At the close of market today, Wednesday, August 22nd, 2007, a high of 2554.90 and a low of 2533.74 was achieved. you should have been able to establish your positions at between 2554.90 and 2533.74. Keep stop loss at 2641.

At the close of market today, Tuesday, August 28th, 2007, we are well into profits with our downside positions - continue to hold the positions but adjust the stop order downwards to 2590 from 2641.

On August 31st 2007, our short open positions are stopped by our stop order of 2590 at a small loss. The market went up to prove it's an uptrend and not a downtrend. However, the Dow ($DJI) and SP500 ($SPX) are shy and retain downtrend properties but their next longer trend is uptrend.

Now that the the Nasdaq (read QQQQ and $NDX) is uptrend, on Friday, September 7th 2007, using Chart 3 Troughs, the Price Standard Deviation Line entered the High Probability zone in the downside. The low for that day was 2556.59 and again this is a very critical value in our trading. It's time to get in. We know what we want. If the market was to hit this low of 2556.59 the next day, then from there we shall follow it tick by tick so that we can get in at a price below 2556.59. The next day, September 10th 2007 a low of 2536.93 is registered which is lower than our low of 2556.59. We get in at between 2556.59 and 2536.93.

On September 18th 2007, and using Chart 4 Crests ,  the Price Standard Deviation Line has entered the High Probability zone in the upside. The high for this day is 2651.66 and this is a very critical value in our trading. The longer trend, Chart 1 Uptrend is uptrend as the price line is above the Variable Equilibrium Line. The highest high of the current ending crest is higher than the highest high of the previous crest. Armed with our high of 2651.66, we now wait for this high to be broken tomorrow, September 19th, 2007, so that we can get out at 2651.66 or higher. Once we exit we shall retain neutral positions in favour of upside. The stop order will be retained at 2536.93 less 0.5 percent equals 2524.24.

On September 19th 2007, a high of 2683.02 is registered and we exited at between 2683.02 and 2651.66 with a nice profit. We retain neutral positions for benefit from time decay.

October 12th 2007: It's been a good time for our neutral positions since September 19th 2007. During that time the market has steadily moved upside and we have rolled over neutral options positions at least once with neat profits - we rollover when the net delta between short and long positions is zero. And the stop loss for neutral positions has now been adjusted to 2652. October 16th 2007 and using Chart 3 troughs,  the Price Standard Deviation Line has entered the High Probability zone in the downside. The lowest low for this trough so far is 2757.76 and this is a very critical value in our trading. The longer trend, Chart 1 Uptrend is uptrend in Nasdaq (read QQQQ and $NDX), SP500, Dow, Russell 3000, etc, as the price line is above the Variable Equilibrium Line. The highest high of the current ended crest is higher than the highest high of the previous crest. Armed with our low of 2757.76, we now wait for this low to be broken tomorrow so that we get filled. So tomorrow, October 17th 2007, we shall gamble and establish positions to the upside at any price below 2757.76. If we can, we can follow the market tick by tick and get the lowest low for the day. If we do not get a price lower than 2757.76, then we shall open half of our positions close to the closing price of the day. The remaining half of our positions will wait for the next day, October 18th 2007, to see if we can get a price lower than 2757.76. The stop loss orders will be set at 2630.68 based on chart 1 uptrend.

October 17, 2007: A low of 2725.16 is registered and we comfortably get filled at between 2757.76 and 2725.16. The stop loss order is set at 2630.68

October 26, 2007: The move to the upside has not been a straight forward thing - Except for the NASDAQ, the others, SP500, Dow, Russell 3000, NYSE, etc., have shown patches of deep weakness for the last two weeks. Today, Friday the 26th of October 2007, and using Chart 4 Crests,  the Price Standard Deviation Line has entered the High Probability zone in the upside for Nasdaq. The high for today is 2810.31 and this is a very critical value in our trading. The longer trend, Chart 1 Uptrend is uptrend as the price line is above the Variable Equilibrium Line. Armed with our high of 2810.31, we now shall wait for this high to be broken on Monday, October 29th 2007 or thereafter, so that we can get out at 2810.31 or higher. Once the price touches 2810.31 or higher, we shall, if we can, follow it tick by tick on Monday. Once we exit we shall retain neutral positions in favour of upside. Should the short legs of the neutral positions get into money, then, roll-over appropriately (how?). For now, the stop order will be retained at 2630.68 until the high of 2834.00 is broken and then the stop loss will be adjusted upward to 2698.14.

Monday, October 29th 2007: A high of 2825.37 on Nasdaq is registered and we quietly exited at a neat profit from our long positions at between 2810.31 and 2825.37. We however retained neutral positions to the upside and stop loss order retained at 2698.14. To illustrate using a worked example we shall look at one of the positions that we have: On October 17 2007, we sold to open 40 contracts of QQQQ Dec'07 56 call option at 0.83. We also bought to open 40 contracts of QQQQ Mar'08 55 call option at 2.59 and also bought to open 20 contracts of QQQQ Mar'08 56 call option at 2.08. Now today we sold to close 20 contracts of QQQQ Mar'08 56 call option at 2.80, thus collecting a profit of 1440. The remaining open contracts will run as the neutral positions to the upside - whatever the size of your trading account, these are the ratios to use - say 2:2:1.

Friday, November 02, 2007: Whilst Nasdaq look very healthy and bullish, the others (read SP500, Dow, Russell 3000 and NYSE) continue to show relative weakness with divergence that can be associated with bullishness and sideway trending ranges. Somewhere from here, the Nasdaq and the others are to synchronize each other so that all can flow in one rhythm. In the meantime, November 02nd 2007, using Chart 3 Troughs, the Price Standard Deviation Line has entered the High Probability zone in the downside for Nasdaq (read QQQQ and $NDX).  The low for this day is 2773.82 and again this is a very critical value in our trading. It's time to get in. We know what we want. If the market will hit this low of 2773.82 on Monday, November 5th 2005, then from there we shall follow it tick by tick so that we can get filled at a price below 2773.82, Otherwise retain neutral positions biased in favour of upside for Nasdaq (read QQQQ and NDX).  And now that the current ended crest in Nasdaq is higher than the previous crest, the stop order should be adjusted to 2698.14 less 0.5 percent equals 2684.65.  It is however worthy to bear in mind the weakness in the other indices and prepare or expect to be stopped any time with a small loss.

November 09 2007: The Variable Equilibrium Line has been violated by the price line and the longer trend is now downtrend. The red flag spotted in SP500, Dow, Russell 3000 and NYSE earlier on has finally proved to have been landmines. The Nasdaq and the other indices have synchronized each other and are now flowing in one rhythm - downside. Earlier, November 08th, 2007, the market dropped below our stop loss/breakout of 2698.14 less 0.1% equals 2695.44 and all positions to the upside were stopped and new Neutral positions/Calendar spreads in favour of the downside were initiated at 2695.44. This was confirmed by the intermediate uptrend chart and all we had to do was to watch that the price remained below the intermediate downtrend chart until the long trend chart confirm it, otherwise we reverse to the uptrend.

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And should you have a question you need to ask, feel free to ask for you will be answered. It is through asking that we have been able to have what we have. We provide this information free to help beginners and average traders who might be inexperienced in the complexity of stock market movements make money in the stock market.  We provide analysis of Nasdaq Composite Index, SP500, Dow, Russell 3000 and NYSE as we trade them. In addition, we can also upon request provide analysis on Exchange Traded Funds of Nasdaq, SP500, Dow, Russell 3000 and NYSE. We prefer trading Exchange Traded Funds because they spread risks across other stocks, pay dividends, are less noisy, not very prone to rumors and or manipulations, their Options are spread at workable intervals for spread strategies, and above all, ETFs trades are easily predictable by using the broad market indices of Nasdaq, SP500, Dow, Russell 3000 and NYSE.