I was reading over on IndexUniverse that “NYSE Arca Tech 100 ETF Offers Challenge To QQQQ”.

I really don’t know what the author was thinking. The NYSE Arca Tech 100 (NXT) is the old Pacific Exchange 100 Index. That is not the only thing old about the NYSE Arca Tech 100.

Continue reading…

Friday was a difficult day for me. The market seemed to irrationational in a logical way.

Last week when Cramer came and talked on video about how hedge funds manipulate the market, people seemed shocked. im Cramer described in a Wall Street Confidential segment on The Street.com, how hedge fund managers basically juice the market to close out their quarters in good positions. Well, IMHO, that is what happed on Friday.

You can read more a the WSJ, Painting the Tape, My Money Blog, and Trader Mike.

In the morning when good news hit the street, the market did not go up. We had some bad news and the market fell. Funny thing, in the afternoon the market started to rise on light volume. Just like Thursday. Hmmm. Could it be that the funds were trying to “window dress” before the end of the quarter. I suspect so.

In the after noon on Thursday and Friday, the market went steadily up. Strangley so considering the news that was on the street.

Of course we do not have any evidence of market manipulation, since that would be illegal. Cramer’s words do ring a lot truer these days.

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.

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]