Wednesday, November 18, 2009

No Idea

There are too many possible scenarios at this point. As mentioned this morning did we have a failed W5 (yellow) or is this a more complex W3-W4 (blue). Both are valid technically though the more complex W3-4 has a bit higher probability due to the sideways action after we had reached the top.

As you can see there are many different variations with neither one of them having more of an edge - with the exception of the major trend winning - up. So if you take a look at it from the trend perspective up is the only way to go.

One could still say we have a descending triangle from the top on monday which means another possible run up towards 1009 that should fail there. Overall ranges have been extremely narrow since the Monday GAP and we have yet to try to fill that GAP. Markets down while EURUSD is up - another big divergence to notice - of course yesterday an all up day which is quite rare and was a sign of more correction to come.

Position update
Don't you hate when some cries about having entered the at the wrong time and price. You are not coming here to hear my complain and bitch but to find information about markets - but then again I need a place to talk out loud - this is one of those times so ignore this section =)

Well my EURUSD trade yesterday - kicking myself quite a bit. I did not expect a big rally there but boy was I wrong. That would have been a nice move and a great hedge for my positions. My out of the money 106 puts are burning a whole into my account every minute that goes by. I expected to have to carry them out of the money for a bit but they have been out of the money since I entered the position so thats not good either. So at this point I have few options really.

1) close the puts and take the loss - seems the most sensible if I am unsure and as you can see I am.
2) roll those into in the money puts - probably the smarter move here.
3) wait until Tuesday next week as this is opex week and one should not make large adjustments to positions during this MM crazyness
4) hedge by entering a spread - may do this on a break of 1110. Thats one of the main reason I closed some today to free up some capital as I am limited to 15K on options, with a big percentage already as a loss.

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