SPX-Heads or Tails

What a DAY!

What Do I see:

• Bullish if price goes over 1120.
• Bearish if goes below 1050.
• Likely support at 950-960 (If I have to guess exact number, it would be 958).
• Green lines are my Chart art (projections). Technical Analysis is an ART!
• ADX black line indicates trend strength but not the direction. When price was going down (from 1150 to 1050)  DI- was greater than DI+ indicating the downtrend and ADX started to rise => trend was strengthening.  Then ADX line reversed from about 35. While price started to rise,  for a short time DI+ became greater than DI- but ADX value kept on falling suggesting that lack of uptrend strength. Now DI- is back being greater than DI+. Now if the ADX starts to rise (as shown in the image) this would make for a bearish case.
• MACD under zero, hence crossover suggest [up]correction. It has a slight hint of topping out.
• Interesting observation: Line at 1044 acted as resistance on Oct 2008 and support on 05Feb 2010. Any relation between these times or just coincidence??

What a day today!!! Every time you get excited, market makes you humble!! In the morning Bull were jumping off the window and later in the day it was bears turn.

I do have a bearish bias, but being bull is no fun either!

Cheers!

GOOGle a good short??

Google (GOOG) – A good short soon??

What do I see??

• Bearish crossover (21EMA crossed 34EMA) on Jan 22. => Bearish??
• The price backtested the 21EMA/upper limit of Bollinger band and now falling => Bearish??
• Bollinger band has not be soo tight for very long time=> Very sharp move coming??
• MACD seems to be turn back. (Not sure how to interpret the crossover). Bearish??
• VERY LITTLE participation by GOOG in market rally => Bearish??
• If GOOG goes through SP $525, can it go till SP $400??

Let see what happens !!

Log for Options Study

Options

Securities that gives owner right to buy underlying asset at a specific Strike Price by specified Expiration Date. Price you pay to own the option is called Option Premium. Sounds familiar!! Yeah…it does sound like insurance premium (but it is not the same).

There are only two type of option:

• Call Options: Gives holder right to buy (go long) an underlying asset at specific price by specified time.
• Put Options: Gives holder right to sell (go short) an underlying asset at specific price by specified time.

Traders buy combination of Call and put options to form option strategies to profit from.

Note:

Options for stocks are mostly traded in multiples of 100.

Options holders have right to exercise the option, but not obligated to do so. The cost of not doing so is the option premium.

Option writers are the  obligated to deliver the underlying asset (sell or buy), when option holder decides to exercise valid option.