Floyd is traveling in South America all of this week.
With my traveling it's a perfect time to outline where we see Dow projections, why we were profitable each day last week, and the week prior, in all but one signal we have provided, and what the market holds:
1. We will provide a range of option signals for your review this week.
2. In each case our rule of trading is:
a. Follow futures. If up or down 50+_ points look, if applicable, for "best buy" prices, typically 15 to 22% below prior day close.
b. Enter orders pre-market at best buy. Take no second buys unless highly risk oriented, and if buying at best buy look for 22 to 35% profits.
c. Hold each position no longer than 4 days.
3. Depending upon the whipsaw and charts Floyd sees we'll hold with one or two signals for the week, OR we will change strike signals.
We believe the market is acting in what Economist Krugman calls an L formation. We are all familiar with W, V, and the ABC head and shoulders topping. Krugman believes we may be entering the "lost decade" or an L formation in which we see the downside or upside, the I of the L and the _ becomes the flat lining he sees through 2010.
This holds with my thinking that we will see spikes of euphoria and hope, and reversals of real magnitude, as we've seen this past two weeks.
If Krugman or I are right we are seeing the typical behavior of an L formation within the last three weeks, with deep whipsaws, but always back to flat and steady line, with no real increase.
This has also occurred after the Fibonacci Retracement at 10,746. We think the market may next hit tops at 10,604, yet downside risk remains just as strong, no matter how it "looks".
The SPX can hit 1200, and the OEX 510-512, but it will be on how news in interpreted each day.
The Chilean Earthquake could easily effect the market.
For option traders some fast money is very possible to be made watching the SPX support and resistance lines and playing any strike point with a close ATM range on the SPX
Our Dow projections are critical in how we have been trading this past few weeks:
These are all support lines around a 10% Fibonacci retracement from 10,746
9667
9750
Both support lines above are deep bottoms that would show more root negative, and longer downturn.
9841
We held here at the last downturn, and quickly moved back above 10,000
9950
These are the resistance lines if the market holds at a 10% retracement
10,050-10,127
10,267
10,350-10,437
The market has been struggling in this range, with whipsaw to the 10,127 area occurring repeatedly.
10,604-next resistance top
10,746- Market Resistance Strong Top
