For Thursday, I think all bets are off. I am looking at a tighter range around the market. I will probably take a directional position based upon which line ( support / resistance ) is broken.

There are some reports , Initial Jobless Claims , and Gross Domestic Product , that are coming out at 8:30, so I cannot expect that information will have been factored in as analyst will have time to read, studied and analyze the reports.

I am thinking more about 1Option’s position that the small trader should take directional bets. I cannot predict the market with 80% accuracy yet, so I have a while to go. But I do think I will have to go more directional to increase my returns. I would have made a lot more if I had bracketed my orders yesterday. When the market was making a triangle, one order above and below with a trailing stop would have made me some money.

I will have to practice those in my paper trade account today.

~squid

Thursday QQQQ Support 43.35 Resistance 43.90 / 44.25

Another trading diary is An NYSE Scalper’s Tale - A Trader’s Diary pretty cool. About a CBC ( Canadian Born Chinese ) scalping at a prop shop.

I usually check in on the weekends since he does have a Weekend Reading List.

Well, I put on a long Long strangle QQQQ @ 43.82 @ 10:00 A.M. right at my support level. They both had narrow spreads. The IV was not too expensive. I wanted some downside protection so that if things did not go the way I wanted, IV would not plummet. I also went for APR as the MAR options expire this week.

bought APR 45 calls - 15.68% IV - narrow spread
bought APR 43 puts - 18.37% IV - narrow spread

The 10:30 AM Crude Inventories report came out and the market did move. I was hoping that Bernake would come out with bad news and we would have a good day. However he didn’t, the news was middle of the road. I was looking at 43.55 as an exit point on the downside.

After his testimony started the market seemed to take a breather to decide on what to do, and the answer was to rally. SO I was back up a little, on the other side of the strangle. I was looking to see if I could bail around 44.35, but the market did not continue the rally and failed and fell back.

I wasn’t happy about this trade, so I bailed around 2pm. I broke even on this trade.

What I did see was that a bracket order would be better when the market starts to make a triangle pattern before news. Also, when the market is nervous, I think these can work out better.