QQQQ Power Shares' Tradable Crests and Troughs

Stock Market Following and Stock Trading Tips


Where The Stock Market is Today, issued November 25th, 2008

NASDAQ Composite Tradable Crests and Troughs

November 25th, 2008: the market has been confirmed to be downtrend as can be seen in Previous Charts. This trend has not changed yet and until the price say otherwise, we remain bearish. We currently have open downside positions of puts, short QQQQ stock position and Calendar Spreads to the downside which is rolled over every time both legs get "on money". The current stop loss is 1785.84 to the NASDAQ Composite.

November 25th, 2008: If you look at the Crest chart below, a strong enough crest has formed and the ideal situation is to open positions to the downside above the crest critical price of 1486.22

Refer to the page Stock Market Trading Tips as a reference to understanding these trades

Action for November 26th, 2008 or within the next few days, open positions to the downside at any price above the crest critical price of 1486.22.

Example of trades you can open (or adjust your neutral positions to the following):

1. (a) Sell to open (short) 1 unit of QQQQ stock (b) buy to open 1 unit long QQQQ put option (c) sell to open 1 unit short QQQQ put option. When you want to be neutral, you just sell to close one unit of the 1 unit long QQQQ put option.

2. (a) Sell to open (short) 1 unit of QQQQ call option (b) buy to open 3 unit long QQQQ put option (c) sell to open 1 unit short QQQQ put option. When you want to be neutral, you just sell to close one unit of the 3 unit long QQQQ put option.

A unit represent the quantity of positions you are comfortable with based on ones financial strength and margin requirement. Make sure your Stop Loss order or breakout to upside of NASDAQ Composite trading above 1785.84 is with your broker.

If the market changes direction, reverse the above trades.

Stop Loss/breakout to upside: NASDAQ Composite trading above 1785.84

Previous Charts

Updates

Update November 26th, 2008: the price of 1486.22 is reached as NASDAQ Composite has reached a high of 15.3210. Trades to the downside are comfortably established at between 1486.22 and 15.3210. If this price will work in our favored downtrend is only time that will tell. Take note that prices are getting closer to the Stop Loss/breakout to upside which is a possible sign of a coming change in direction.

Update December 2nd, 2008: If you look at the Crest chart below, a strong enough trough has formed and the ideal situation is to close positions to the downside below the trough critical price of 1399.88. This is to ensure you lock-in some profits.

Action for December 3rd, 2008 or within the next few days, close positions to the downside at any price below the trough critical price of 1399.88.

Example of trades you can close (or adjust your neutral positions to the following):

1. From existing trades {(a) Sell to open (short) 1 unit of QQQQ stock (b) buy to open 1 unit long QQQQ put option (c) sell to open 1 unit short QQQQ put option}, if you want to be neutral, you just sell to close one unit of the 1 unit long QQQQ put option.

2. From existing trades {(a) Sell to open (short) 1 unit of QQQQ call option (b) buy to open 3 unit long QQQQ put option (c) sell to open 1 unit short QQQQ put option}, if you want to be neutral, you just sell to close one unit of the 3 unit long QQQQ put option.

A unit represent the quantity of positions you are comfortable with based on ones financial strength and margin requirement.

The Stop Loss/Breakout to the Upside is still at 1785.84. Make sure your Stop Loss order or breakout to upside of NASDAQ Composite trading above 1785.84 is with your broker.

Update December 5th, 2008: The above expectation has not been achieved yet. The Stop Loss order breakout to upside has adjusted to NASDAQ Composite trading above 1535.57. Notice how prices are getting closer to the Stop Loss/breakout to upside which is a possible sign of a coming change in direction.

A Change of Direction, December 8th, 2008

Update December 8th, 2008: NASDAQ Composite has today traded above the Stop Loss order breakout price of 1535.57. Count losses on this trade as you check your new trades your stock broker has established for you.

Examples of trades to the upside that you can can open (or adjust your neutral positions to the following):

1. (a) Buy to open (long) 1 unit of QQQQ stock (b) buy to open 1 unit long QQQQ call option (c) sell to open 1 unit short QQQQ call option. When you want to be neutral, you just sell to close one unit of the 1 unit long QQQQ call option.

2. (a) Sell to open (short) 1 unit of QQQQ call option (b) buy to open 3 unit long QQQQ call option (c) sell to open 1 unit short QQQQ put option. When you want to be neutral, you just sell to close one unit of the 3 unit long QQQQ call option.

A unit represent the quantity of positions you are comfortable with based on ones financial strength and margin requirement. Make sure your Stop Loss order or breakout to downside of NASDAQ Composite trading below 1295.48 is with your broker.

If the market changes direction, reverse the above trades accordingly. Take note of how far the prices are from the new Stop Loss order or breakout to downside of NASDAQ Composite trading below 1295.48.

Stop Loss/breakout to downside: NASDAQ Composite trading below 1295.48.