WHAT DO I SEE?

• My little knowledge of Elliott wave suggests that we are in 4th wave triangle (2nd was down wave => this must be a flat/triangle and it looks like one).
• Likely high around 83.2 by third week of March 2010 (Possible bottom time for Equities). At this time Stochastic will be topped out.
• Then fall back to 78.5. More on this later.

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!

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 !!

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.

Lets do some math:

Let create a Profit/(Loss chart) for a stock “βθ”, when you purchased its options.

[table id=1 /]

In effect at time of exercise we will pocket a total profit of cool: 1500+600-300-200 = $1600.

NOTE:

• This calculation doesn’t include brokerage fee.
• Options are mostly traded for premium and not exercised.

LEAPS (Long Term Equity Anticipation Securities)

Basically long term options, which expire upto three years from issue date.

Option Strategies:

1. Protective Puts

This strategy is same as buying insurance. If owner of a share is concerned that price of an asset may fall, he/she can buy the same number of puts as asset held by paying the premium. Now if  price does go down, puts can gain in value providing the value conservation.

2. Selling a cover Call:

When you own a stock and want to sell the Option for that stock, you simply sell covered call. This means that you are obligated to sell the stock, when buyer of the call options decides to exercise it.

You profit from this when:

• You think that stock price is not going to go beyond the strike price.

• You sell the “Calls” and pocket the premium and when share price stays below the strike price the call becomes worthless.

NOTE:

“Covered” mean you own the underlying asset. Your risk is limited to the delivery of underlying assets.

Similarly, Selling an uncovered call means that you d0′nt own the underlying asset.  The risk is you may need to buy the underlying asset and deliver it.

After enjoying Big Ben, Houses of Parliament and taking a ride on river Thames, he decided to conclude his small trip by taking a ride on the Europe’s biggest Ferris wheel “The London’s eye”.

He managed to get to this huge wheel right on time.  He was lucky as it was the last ride of the day and this was his only day in London. He was surprised to see that there were not many people today at this South Bank attraction. Once his turn came, he hoped on to one of the Capsules of this wheel.

As soon as he enters inside, he sees only one more person in the ride. She was standing on one corner of the capsule and Sakay places himself in the other corner. He couldn’t help but tell himself that how gorgeous this girl is. He consistently tells himself “Go talk to her”, but his fear grips him over, as usual, and he does nothing. He persistently hopes that she starts some sort of conversation and then he might then be able to sweep her of her feet.

While he is at his mental fight, the wheel starts to rotate. N0w he gets back to sightseeing. Even though he is watching and looking outside, he keep thinking about the girl and keeps hoping that she would talk to him. Every time he get hopelessly hopeful, his contradictory side speaks to him “Not going to happen, it never has. You will be by yourself as you have been. So stop thinking about her”.

Twenty three minutes of Thirty minute ride passes by. “Well, I guess, I will walk alone again!”, he says to himself. Just on that moment, the wheel seem to stop.This makes him concerned. He looks over to the lady and she looks back with a worried face. After only few seconds, she walks to him and says in a hesitant manner “Why has the wheel stopped”.  Sakay couldn’t help smile in his head, after all she was talking to him.  As soon as he tried to reply they hear an announcement..”There was a technical fault with one of the tires so we stop the wheel to get it repaired. We can expect upto one hour of delay”. “There you go, now you know the reason”, he replies to the lady.

With his words ended, she retreats back to her spot without saying anything else. This made Sakay feel down, but  he tells himself “I have to go to her and talk” and again the ‘war’ begins in his head.

While he was lost in his thoughts, he hears “Hey…how are you?”. He looks and realizes that girl has walked back. “I’m mm good! how…how are you?” he mumbles. She says with a zest “I am great! I was bit concerned about the wheel stopping.  Now I know, I am excited to be stuck here for a while”. This made Sakay bit confused..”why would she be excited for this?”.

She introduces herself “I am Malena, whats your name?”.  “Hello Malena, I am Sakay! It is nice meeting you!” this time he replies with bit more confidence.  Then he asks her “Where are you from? You seem to have some sort of Italian or Spanish accent!”. This was something he noticed ever since he heard her. “That is pretty close, I am from Naples, Italy. Where are you from?” she replies with a big smile and asks. Even before he replies, she said “Let me guess…Japan! Right?”. “Nice!…your guess is right! usually people really mix up all the Asians!!”. She giggles a bit  “Well I would have done that too, but your backpack says I love Japan, so I guessed”. They both have a good laugh. Then Sakay thinks in his head  “Man! She has an accent, she is looks good, she is funny and I connect with her well. I wish I could be ask her out. She is so cute!”.

Again he keeps his thought to himself and asks her “So what brings you to London?”.  This time he was feeling comfortable talking to her.

“Well this is beautiful city and I came here in a hope to meet someone”. Sakay surprised in his head “Wow!!”.  “I came here a month ago on vacation before I go to New York in 2-3 days to be with my family”,  she continues “So far I have enjoyed the city.. I have met few good people, but really didn’t find a right one!”. Now this triggered a chanting in Sakay, again, in his mind, “Be mine, be mine, be mine!” which was contrasted by his contradicting mind ..”she is too hot and cute for you..not going to happen”.

“Really New York!! I am moving there to work as a Financial analyst.”  He replies with a voice of hopefulness.  “Wow…what a coincidence!! As if god wanted us to meet!!” She says with a hint of hesitation. Sakay asks “you really think so?” He was bit suprised with her straightforwardness. She says with some force “why not? why else would only two of us present in this capsule, when there can be more people and then the wheel stops!”.

Given her reply Sakay finds some courage to say “I guess you might be right!! Ever since I saw you I was hoping to be able to talk to you!”.  “So you should have come to me and said hi” She suggested.  “So you think…but I always have this wall of worry whenever I find myself in such a situation! I wish I had the courage….mm…then I might not have been single! I hate that part!!!” He started opening to her.

“Hmm I guess its not easy..I find myself more open and if I want something I don’t hesitate to go for it!! I know at worse I will be denied if I ask someone out. But you what is worse than that keep hoping for things to happen for you and when nothing happens and you walk alone!” Sakay replies to this by saying ” So would it be ahmm…ahmm alright if..if..if..I aask you out or somthing”. He scratches his head while asking her out. The wheel starts rotating again. “Damn it! This wheel had to start only now! She better reply soon…” he thinks again.

She say “OK!… there is no harm in see how things go between us”. Sakay gets a biggest smile inside out. “So how are we going to do this? I mean I have flight to catch soon after this” he asks. “Hmmm…why don’t you give me your New York phone number.. I will call you once I am settled..” she replies. He gives her his phone number and talks more for a minute or two when there ride is over.

They come out of the capsule and both look at each other with hope. “OK Sakay… I guess its time to say goodbye! I really felt good for the time we spend together” she says and comes closer for a hug. Sakay was hesitant to hug her. Well what can he do…he had very less experience being closer to a woman. Malena sees his hesitation and say “Its ok! Its just a hug!” and rolls her arms around him.

Sakay forgets everything else and blends into her. He starts smelling her hair and feeling her close to him gives a sense of completeness.  She totally feels right to him eventhough he met her for such a brief period of time. He now wishes if he could kiss her. He looks back into her eyes and at that moment all his worries and hesitation evaporates. He holds her face in his hands and seeing no resistance he kisses her.

After few moment he says “Wow.. I have never felt like this before! I was not scared! I had no hesitation! With you I was feeling the completeness! You are making me fly..you you have changed me..”. She was blushing “I never expected something like this to happen! So unexpected..so sudden..but feels to right!!”.

They stay with each other for a while, holding each other in cold London weather. With time to apart from each other comes closer, Sakay say “Malena…this is the time!! I have to go now.. I wish I could stay but I have to report on my first day at office!” She replies while holding his face “I guess…time flies! You cannot stop it! I will give you a call once I am in New York! I will go now”. After saying this she stands up and starts walking away. “I will wait for your call!” Sakay shouts a bit with hopefullness. She does’nt look back and disappears into the darkness of night.

When I was in school, I wanted to get to best college in the country. Once I got into the a university, I wanted to get a good job and now I have a job. Now I dream of finding a woman who will be my best friend, a life partner, with whom I will start a new family and share ups & downs of life. This is now a very important ‘goal’ for me, like any other goal in life. Along with all these goals, there are needs and wants which you can think of as micro-goals.

Every goal that I have achieved is as important to me now as it was when it was set. My education, my job, good life and financial independence that I am enjoying everything is important. Yet these milestone that are leading towards something. Where?

Life is a cycle, you are born, you grow up, get a family, bring new human life on earth and grow old and well die. Then this new life follows the same cycle with its own sets of goals/micro-goals…..but WHY? I will die eventually, when I am in my 80-90s and healthy. Call it a intuition or a hunch, but to me death is not the final destination or the final goal. Maybe, just the last milestone for the journey of life. Yes there is a “Maybe”, because I am not sure.

I cannot see what lies beyond. I cannot see it like I can see a moon in the sky, but then I can see moon only after dawn. Maybe I can see “the beyond” on my last milestone. Still I am not sure. Barring the smaller goals, I want to know the ultimate goal of this life. The last milestone for this journey. I want to know this so that I can see where my life is leading towards.

I see myself and so many people worried about smaller things in life. My job, my money, my promotion, what others think about you, my performance in career and personal life relative to others, stock market, bigger TV, better car, better mind, better looks and what not. Everyday is a new day with same cycle, with similar processes, similar worries, similar hopes and expectations. I keep on chasing one micro-goal from other, yet I know that no matter what I do life will steer towards the final point. Its like you choose the path of your life, but everyone has the same final milestone. Does it mean that all the milestones we have crossed are not significant. I don’t believe that. They are important to make your journey called life a smooth sail and good thing you can choose the path. I just wish to know the reason my my existence.

There can a lot of reasons for the our existence. Here is my list:

1. No Reason: There is no reason. Life is just like that. You are born, you live and then you die. This is the way it is.
2. Religious: God has some reason to bring you to this world.
3. Cyclic: Its a part of bigger journey. Once you done with this journey, you begin another one.
4. Not Sure: There is no way to prove that there is a reason or there is no reason at all
5. Spiritual: You are here to help and improve your “Karma”
6. Coincidence: Some billion years ago, with a co-incedence, molecules formed a cell and started to reproduce.

These reason can/will be and discussed on their own. I will not debate for or against each reason, but I find myself more in “Not sure” and “Spiritual” categories. No Matter what the reason is for the existence or what lies beyond, I am intuitively convinced with one thing. It is important that we ensure to make the present journey a happy and fulfilling one.

Keeping yourself and other around you happy, having great wealth, helping others in need, a life partner who is your best friend, obedient children will give great satisfaction. After living a happy and satisfied life I can cross the final milestone no matter what lies beyond it. If there is nothing, I can end here with peace and if there something beyond I can proudly lead the next journey.