Option Trading Strategies | Dollar Bonds Gold Silver SP&500


Welcome to the StockOptionAssassin.com’s
weekly video for Swing Trading Options. Today is Friday, September 21st 2012. We are a couple of minutes before 4:00 PM
today doing this video. I’m going to make this short this week. But I want to point out some important correlations
that I’m seeing and actually make the case for a potential bull side move next week. Let’s look at that now. I’ve got the SPX cash settled index up here. Again we’re a couple of minutes before the
close but we’re about to close here. If you just look at the SPYders itself, or
the SPX, you can see we had this big move. This candle on the sixth – this was the
announcement of the unlimited bond buying by the ECB (European Central Bank). We then bull flagged into the Fed who also
announced some unlimited QE (Quantitative Easing) for an extended period of time. That sent us into this candle which was at
Friday. And then this week, we’ve basically digested
that information, had a little bit of a dip yesterday but this dip was bought and this
is what’s very leaning me on the bull side. I’ve got stopped out at some shorts here
in the past few weeks. But you’ve got to play price and right now
these are bullish patterns. Something I’d sent out earlier this week
is that the market typically doesn’t give you a whole lot of time to get out of the
market. When the market sells off, it’s usually
fast and furious. Right now the market is not selling off. The one little dip we had brought us into
that 1450 area on the SPX and it was bought up yesterday. Today we tried to get a little bit going here
but then we’re basically closing relatively flat, slightly down on the day. When you look at the weekly chart over here
on the left (this is the daily on the right and the weekly on the left), you can see we
had this nice big uptrend for two weeks in a row. We had a few weeks here, pulled back. We had this big move up and basically we’re
consolidating near the highs of the last two weeks. This is also a bullish pause week, spinning
top if you want to call it. We do have this bottoming tail telling you
that buyers did come in. That was from this day right here. But I just want to note that we’re still
on a bullish mode, some consolidation here. Regardless of what earnings and economic reports
are out, this thing is not selling off yet until we significantly break down. Right now you’re going to have serious support
– one at 1450 which was already bought. But if we do sell off, you have this little
consolidation level which is about 1440 and then ultimately you have more around the 1410
area. As of right now, I’m expecting a little
bit of a pop into next week to promote that theory. I want to look at a couple of other charts. First of all, I want to look at the dollar. For those that aren’t used to the currencies
and stuff, there’s a basic correlation that if the dollar goes lower, stocks and commodities
will go higher. This isn’t always a one to one relationship
but that’s what happened. You can see that the dollar market (and I’m
using the UUP here) has been pricing in that QE for the past month or so. For the last couple of months, this thing
finally sold off. It seems that found a little bit of a bottom
here. But you can see we did take out some serious
support levels around this 21.76. Basically what I’m seeing is the last five
or six days the dollar found a bottom here temporarily and the last few days the dollar
has actually rallied. Typically when you would see a dollar rally,
you would see things like Gold, Silver, the SPYders pull back, correlated with that. Again when you look at the SPYders, or the
SPX, we had a little bit of a pull back but nothing near the relationship to what the
dollar did. The dollar actually pulled back up in there. The SPX is basically flat here. If you look at things like Gold, Gold is trading
sideways. I actually tried to make a little pop today
but sold right back off into the range. Gold is trading sideways. Silver is trading sideways. What that’s telling me is that people are
basically not getting out of this stuff. The dollar rallied. Gold is trading sideways. A little choppy here, but this is still a
bullish pattern sitting there for potential higher prices. Actually this is Silver. What I will say about Silver is this is a
highwave Doji. There is a potential for when you have a high
wave. What I mean by high wave is if you have a
tall upper shadow and a long lower shadow and you’re relatively flat on the close,
which is basically what happened this week. This means that there’s bears and bulls. This is a serious battle right here. This is definitely looking like that on the
Silver. If we look at Gold, similar pattern here. Bears stepped in up here around 173. The bulls came back in and basically traded
flat for the week. But again, if the dollar is making a little
bit of a rally – maybe this is just an oversold bounce and that’s how I’m seeing this
– if this thing starts to continue to the downside, you’re going to see upside in
the market as well as Gold and Silver. The one last chart we’re going to look at
today is TLT which is also somewhat inversely correlated to the market. TLT also got a pre significant bounce this
week. Granted it was oversold, it got a pretty significant
bounce this week. But again, the market is trading sideways. The safe haven asset – There’s some monry
going in here but I guess the question is: Is this an oversold bounce as the market sets
up for the next move? Or is this a reversal and now the market is
setting up to go lower? I’m not seeing the market is setting up
to go lower at this point. We all know that anything could come out news-wise
and send this thing down, but you have to give the market the benefit of the doubt that
we have some potential upside in the next week. What I would really like to see next week
to confirm that bullish theory is for us to get above this previous high which on the
S&P is basically 1475. If we can get a decent close and a confirmation
above that, then we’re off to the races here, at least from the next leg up. When you look at the dollar (we’ll go back
to UUP), if this thing breaks down, there’s really no major support. We already tagged this level at the 21.50
area. But really if that’s taken out, you’re
really looking at this double bottom around 21.18. That’s a pretty big move for the dollar
and you’ll probably have a little support here. But ultimately you’re probably looking at
this gap fill from October last year around 21.15 on the UUP. For TLT if these lows are taken out, you could
go all the way back down here. I think in TLT, the downside may be slightly
limited. I don’t think a ton of new money is going
to come into the market at this point. It’s always possible but I think the TLT
downside may be muted a little bit. Maybe you’d get down to this area at 113. You’ve got a little gap fill here and find
support. But again, I think we’re at a critical point. This is obviously a bear flag setting up on
the inverses. You have a bear flag here on TLT and the dollar
– this little bear flag. And then on the indexes, you basically have
bull flags. Let’s look at the diamonds here. This is the Dow trading sideways. It looks pretty much like the Gold chart trading
sideways after a big move. Again I got a slight bullish short term bias
here and that’s what we’ll be looking out for in the next week. Hope you enjoyed the video. I’ll see you guys next week!

2 thoughts on “Option Trading Strategies | Dollar Bonds Gold Silver SP&500

  1. Great vid. I'm also in SPY options, but just started, made some starting profit but want to build up my experience and gain from short term bounces and reversals to keep profits coming instead of losses.. would love to hear from you and maybe share some ideas about the market, thanks man, cheers!

  2. I have a trading strategy that works at over 80% of the time for gold trading.I have a skype home ID: bauvil2003 where I share my strategy for free with people and help people to make money.nothing to lose since you can give it a try on demo before using real money.

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