Tuesday, February 21, 2006

A Few Wishes

Every time I witness a non-actionable stretch of market activity I ask myself the inevitable question of what would really gets me excited.

Well, here are a few answers:
  • Oil reversing right here. As I posted earlier, I don't like Oil on a monthly basis. If I am right, I'd like to see a confirmation of a continued downtrend. Soon.
  • NDX-100 trading through 1682. That would get me short puts on the index in a second. However, it's not just the number, it's also how it gets traded through.
  • SOX.X trading down to 510 in a single fell swoop. That level is pretty obvious to most technicians, but the exciting part is what happens once the index gets to it.
  • Dow Jones hit new high. Why? Because it will be the most ironic thing against a backdrop of a deteriorating market. Did I just say "short Nasdaq puts" above? Yep, that's the art of trading. :)
  • And the final thing that doesn't quite fit the "excitment bill": Gold going nowhere. Yep, I think selling gamma in Gold is ok here. Just be careful to leg into your short gamma at the extremes of the range (We're looking at the recent high and low - 580 and 540 respectively). Actually, breaks above and below these extremes should be faded - at least in the next few weeks.
Cheers,
/Dmitry

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