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If it is going to fall, why sell calls with limited profit and unlimited
risk and not buy puts with limited risk and unlimited profit? The geniuses
always seem to put we poor traders in harms way. Good trading, Ira.
Bill Bancroft wrote:
> RTs,
>
> For those of you familar with Hayward and Connors' patterns, this week
> set up an "Undeniable" sell signal (their name, not mine). This set up
> is when a market makes a six week high and then closes the week (week
> one) below where it opened. For the set-up to be complete, the market
> must then trade below the low of week one. Undeniables were set up on
> the S&P 500 March Contract, SPY (Spyders), and on the Nasdaq Comp. They
> recommend taking advantage of this pattern by selling calls with a
> strike price above the six week high.
>
> As everyone knows by now, the markets failed at the previous high. This
> may or may not have serious implications, but a correction starts with
> lower highs. On the flip side, no support level has been broken.
>
> The ADX on the S&P continues to fall, indicating a trading range (no
> duh), but more importantly, low ADX levels often signify that the next
> move may be a large one.
>
> Finally, the Nasdaq Comp. has had "3 pushes" up on the daily chart. I
> believe this pattern was called "Three Little Indians" by Raschke and
> Connors. This market has since pulled back to the 20 pd ema, which
> should act as at least short-term support.
>
> FYI-
>
> Bill Bancroft
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