Dow Analysis And Strategy
From the March 13, 2020 pre-opening report:
“Considering the above, and considering the facts that one can infer from the 6-month Dow chart below, those who are short via the put combination for the 2nd time this year, should close it out and take profits if the Dow were to cross above 22,500 on an hourly close basis.
“The insanity of the day suggests being wary of anything, and such trading as what is contemplated in the paragraph above would actually create a stochastic buy signal. For those who are operating a properly engineered put combination income and protection hedge program, there is too much profit to lose by being sanguine or greedy.”
Including the observation about the VIX level (it came within ~12 of reaching the 2008 peak at 90), a 2nd sizeable profit of the year should have been realized at the close on Friday, based on the 2-paragraph excerpt above.
Again referring to the excerpt, the Dow stochastic DID in fact create a buy signal by the close, which will be confirmed with a crossing above the 20-level (this is basis the SLOW stochastic, which appears beneath the Dow’s 6-month price chart, below).
As an aside, for those glued to headline news, make no mistake about it: the ~1550-point rally in the Dow’s last ~30 minutes of trade was related to expiring options.
Source
Copying/Pasting full or partial texts without adding anything original is frowned upon by the community. Repeated copy/paste posts could be considered spam. Spam is discouraged by the community and may result in the account being Blacklisted.
If you believe this comment is in error, please contact us in #disputes on Discord