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.

The market held inside my support and resistance points all day. Did not see any good trades, so I remained on the sidelines.

We have lots of news that can move the market, so I will be looking for some event trading, other than that , i probably will stay out.

Wednesday Support 43.83 / 43.55 Resistance 44.35

~squid

Monday was a great example of how support / resistance levels are set and used. Yesterday, I set support @ 44.0. This level is where there is ‘congestion’ in the market. This is both on the down and upside. So when the market goes thru a support level , that level then becomes a resistance level.

So Monday, after the housing market report, the market blew thru support. Once it blew thru the support, the 44.0 level then became resistance on the upside. From the chart below, you can see the market did hesitate at the 44.0 level until the afternoon.

From 12:30 to 2 p.m. , the market re-tested the 44.0 level. Finally at 2 p.m. the market pushed thru closing higher.

Tuesday QQQQ : Support 43.85 | Resistance 44.45 / 44.7

~squid

Another day, another week. Options are expiring this week. I am going to hold off on my analysis until later in the week, when I get a better idea of the levels I plan to trade.

The QQQQ’s ended up with a narrow range on Friday. A failed move on Friday, puts resistance at around the 44.25 level. It is going to be really tight, and unless we have a bear day, the QQQQ’s will break thru that level. The next resistance level will be around 44.5.

The first time thru a level, the QQQQ’s will fade, so I am going to make sure it is a good move before going long.

Monday QQQQ : Support 44.0 | Resistance 44.5 to 44.3

UPDATE : 9:55 AM NYC Time [ We have the new home sales report due at 10:AM that could move the market]

I have been using TWS for a while and the biggest problem I have is not TWS, but Windows. I secretly believe that Microsoft is trying to screw anything written in Java on Windows. So I am running Linux ( XUbuntu ) and it is very stable, so I decided to try to run TWS on this machine.

The first couple of attempts did not turn out with much success. The browser always had a problem, or the java clone wouldn’t work. Whatever. This weekend, I installed Interactive Brokers TWS on my Linux box.

So download Java from Sun Sun. I say Java and not the other Java clones because in my exp. , Java from sun works better with Java WebStart.

IB Trader Workstation uses a Java technology called WebStart. When you download TWS ( browser version ) you are actually downloading a file that tells Java from where to download the actual file. Java then download the application into a temporary area and runs the program from there. Now this temporary area is called the Cache, and it keeps programs you have run saved there. Why does is store them in a cache ? Because every time you start Trader Workstation, Java checks to see if a newer version exists, and if so downloads it and updates the program in the cache. This is the beauty of Java Web Start. You always have the latest version of TWS on your machine.

So from the IB website, download the browser version of TWS. You will then have a file called tws.jnlp. This is the Java WebStart file that we will be using to run TWS.

First thing we have to do is associate the jnlp file with the java web start program javaws.

Right click on the tws.jnlp file, Select “Open With Another Application”.

Now you have to select “Custom Command” and select javaws. This will be in the location where you installed java in a folder also called javaws.

Now that you have donw that, any time you click on the tws.jnlp file, TWS will check to see if a newer version exists on IB, download if necessary, install and run.

If you have any problems, first make sure you have java installed correctly.

Finally, if you want to check to make sure you have done everything correctly, right click on the jnlp file and select properties…. The application to run this should be ‘javaws’.

Enjoy!

~squid