Tutorial & Samples
Background
In the 1/25/00 Press Release, broadcast by e-mail on that day to over 6,000 media representatives (for a copy, see Press Release), 1/27 was forecasted as "a major turning point, probably a relative high." By one definition it was major, in that the market declined sharply the next day. By my definition, it was major because it was a very high number count day in my computer model. On an intra day basis it was a relative high in the market. Since the market was in a sharp downturn from prior to 1/24, and there was a high number count in the model for 1/27 that created only a minor upward blip in the market, it was fairly predictable that the next down move after 1/27 would be a big one. Which it was.
You now understand that the forecasted date of 1/28, a Friday, would be assumed as a relative low in the market for trading purposes, since the actual next forecasted date was 1/29, a non-market day. This means the market would be expected to close on its low on Friday, which it did. As the forecasted date of 1/28 was a relative low, that made the next forecasted date of Tuesday 2/1 a presumed relative high, which it turned out to be on a closing basis.
Since 2/8 was forecasted to be a probable relative high, and it also had a very high number count in the model, and the market was trending up sharply into 2/1 — a week before 2/8, this meant that the forecasted turning date of 2/4 might not be enough of a relative low to make it worthwhile to trade on the short side. In addition, under such conditions, 2/4 might even be an acceleration day. Consequently no new trade was planned to be initiated on 2/1. Market conditions on 2/4 would determine whether or not a long trade would be taken on 2/4 (this is being written on 2/3), but it probably would. There would also be a definite trade taken on 2/8 opposite the trend of 2/7 and 2/8.
First Two Trades
First Trade
The release was published on 1/25, one day after the prior forecasted 1/24 relative low turning point (on a closing basis), the first documentable trade date using tradetiming.com forecasts was on 1/27. As the S&P500 near the close that day was around 1400, the S&P500 Feb 1400 Put would have been purchased at the close on 1/27. The closing price for the put was 26. As the next market day, 1/28 was forecasted as the next turning point, the put would have been sold at that close. The closing price was 52, a 100% gain for the trade.
Second Trade
1/28 was forecasted as a turning point and assumed to be a relative low, the next trade would be on the long side. As the S&P500 closed around 1360 on 1/28, the S&P500 Feb 1400 Call would have been purchased at the close. The closing price of that call was 15. As the next forecasted turning point was Tuesday 2/1 and assumed to be a relative high, the call would have been sold the close that day. The price of that call at the close was 32 1/2, a profit of 116%.
Account Calculation
A $10,000 account as of 1/27 would have grown as follows. Three of the 1400 Puts would have been purchased and 11 of the 1400 calls would have been purchased. At the close on 2/1 that would result in a total balance in that account (ex minor commission costs) of $37,050, after only 3 market days. This amounts to a gain of $27,050 on the original $10,000 account. That equals a net gain of 270% in less than a week, and who knows how much on an annualized basis. This is only one example of trading results that can be accomplished using documented TradeTiming.com forecasts.
The Basics Tutorial Through Sample Trades March 22 - APRIL 2001
OK, so HOW to profit from the TP's? You can trade them as they are posted, but several of our traders, double check the market technicals, trying to identify some 'supporting cast members':
- Candlesticks
- Rising and Falling Wedges
- Support & Resistance Levels
- Symmetical, Ascending & Descending Triangles
- Spike Highs and Lows
- Gaps (Filled – Unfilled, Higher – Lower)
The above are not necessary, but similar to a baby with his/her blanckey, it helps to make the decision of entering a Long (Call) or Short (Put) trade that much more comforting. Most of the forecast Turning Points make tremendous technical sense as the days action unfolds.
The Live TP Update for the Members will be accessible for the member to observe the actions taken, and the reasons behind these actions.
Trading Samples
| Date | SPX | Price | Market Notes |
|---|---|---|---|
| 3/22 | 1115 | Buy @ $18 | SPX, OEX, DOW and Nasdaq bounce off of VIP Support. |
| 3/27 | 1180 | High @ $51* | Market conditions following NMLs guidance upward. |
| 3/28 | 1170 | Sold @ $40 | Market gapped open lower. Calls were stopped out. +122% return. |
| 4/2 | 1158 | Buy @ $29 | -3 on the SPX was the GUIDELINE entry point for the Short/Put on the SPX. |
| 4/3 | 1110 | Sold @ $58 | Placed a 100% profit sell order. +100% return Option High $60 1/2. |
| 4/4 | n/a | High @ $62* | 4/4 taken out of the picture. HOWEVER, this WAS the low. 4/5 HUGE rally. TECHNICALLY speaking, 4/4 was a double bottom, and everyone incl. Their Uncles & Aunts jumped in for a +396 point Dow ride the following day. High $62* |
March 22nd - 29th, 2001
Large drop from 10,800 - 9200 on the DOW. NDX touching 1800 support. OEX 550 support. SPX 1095 support. The stick in candle turned out to be a BULLISH Hammer! Most importantly, TradeTiming.com forecast a Reversal (Nov of 2000), a Turning Point. Following the TradeTiming.com guidelines, traders would enter anywhere from:
- The TradeTiming.com forecast an entry at 1230 EST, close to the First Major low of the day.
- Guidelines on a safer entry would have the subscriber long at circa 1110 & 1132 1/2 on the SPX.
April 2nd - 4th, 2001
| 4/02/01 | 4/03/01 | 4/04/01 |
|---|
- Notice how the forecasted exit was close to the low on April 4th.
- The reason TradeTiming.com exited the trade a day early on 4/3 was that our 100% target had simply been filled. (The very next morning, the SPX took off. Technical double bottom and positive earnings news fuelled the rapid ascent. Perfect Timing Again!).
April 14 (Saturday was TP) - 19, 2001 (& Friday 13th Holiday)
Conservative Approach
- The Turning Point (TP) was in between the 4/12 - 17 close. We bought the MAY 1150 SPX CALL for about $58. Our entry point was near to the close on 4/12. Sat 4/14 was the start of the uptrend we forecasted.
- The option hit a high of $105. Exited in the $95 - $100 vicinity.
- We decided to go with May In The Money options due to the high Beta, the length of the trade of 5 day, and as we were within 2 weeks from expiration, the deterioration of the extrinsic value of the April option (time value) was too high.
Less Conservative Approach
- ONCE in a BLUE MOON, to have a FANTASTIC trade combined with Close option expiration at hand. The NML on the 17th and 18th demonstrated the largest differential in our volatility numbers, it was prime for the picking! We bought April OEX 615 Calls at $3.50 and $4.00 on 4/17 at the dip before the close.
- Before the fed announced the 50 basis point cut, the options had tripled. We were happy. When the fed announced the 50 basis point cut, we were elated with our options trading at 27.00!! A 671% return in less than 6 hours! Thank you TradeTiming.com and Mr. Chairman!