Today's action

Discussion in 'Trading' started by jerryz, Aug 8, 2006.

  1. Most everyone I talked to over the past week or so predicted this in advance, including myself. There was good money to be made today and I'm gald I didn't sit this one out.

    I think a previous poster said this too but there really wasn't much of a move today and it was fairly easy to read. I'm expecting a bigger move tomorrow actually.
    #11     Aug 8, 2006
  2. dac8555


    absolutely....not that i am amy genius, but i was holding several dozen index puts into the announcement.

    it was a really logical response.

    1. buy on the rumor, sell on the news-the markets had been going up for the last couple of weeks...and rallied late last week with the conclusion that the fed would probably pause.

    2. When the price is factored in like that, if they had paused or raised...the response would have been similar. market down

    3. couple that with most of the major indices right at major resistence levels and coming off overbought levels...

    4. After the announcement..i held my position short and simply doubled up after the confirmation when indicies went red, with cash reserves to hedge in case wrong.

    I now own 40+ septemebr put contracts on the indices.
    #12     Aug 8, 2006
  3. It is interesting. I wasn't suspecting this kind of action. My suspicion is that it might have been priced in already. Big hands possibly took their positions during that sharp spike up on... I forgot which Fed date it was... but it was noticeable intraday.

    I suppose I'd get more bullish for longer term entries if the S&Ps retrace down a bit below 1260 and stalls, starting to form a higher low.
    #13     Aug 8, 2006
  4. dac8555


    disagree..not trying to be mean...but the major indices did not move all that much.+/- 40 on the dow... they approached the day highs...but not much else.

    Even though iwas right...i lost money with LOUSY execution on my options.
    #14     Aug 8, 2006
  5. Well there is no need to predict the FED action. You can trade this in a number of ways.

    I posted several on a thread titled "Trading the FOMC" (If i remember correctly).

    Today was a simple bracket trade. The "art" of the bracket is the placement of the long and short (OCO) limit orders such that you don't get hit before the actual announcement.

    Today I placed mine at 83.25 and I was hit just before the announcement by the program entries. I was fortunate enough to decide to take profits early. Once you are filled it is important to find a way to confirm a decision to exit. I monitor market internals lined up on the right side of my screen including TICKI, $ADV, TICK, Volume, and the cash. If you watch these at each announcement, you will eventually get into a rhythm and learn to spot the hesitation that occurs just before a reversal move. I find that volume is very helpful if you can monitor it on a 1 min and 5 min chart simultaneously.

    Good luck


    For this announcement, the odds were high in favor of no move.

    For those who want to check it out you, if you have historical options data you can look at open interest last week. Also check out the previous weeks intraday charts looking for wide range bars. Note the price points where those bars occur.

    Thats it. I leave the rest to you guys

    #15     Aug 8, 2006
  6. Pekelo


    Yes, I did. I shorted before the news, then I went flat but posted that I will reshort when there is a spike. I shorted the spike and got out with nice gains. All posted in realtime in the journal section...

    Well, I am not the Augur for nothing... :)
    #16     Aug 8, 2006
  7. romik


    yes, but a naked prediction is worth s..t, i did not plan to trade the breakdown, but it so happened that the range fell within the systems criteria and the result was better than average.
    #17     Aug 8, 2006
  8. I actually shorted just BEFORE the announcement, and had Ninja set to reverse if my tight stop (1 pt on ER2) got hit (which it did on the long spike just at announcement). I figured it could go either way but the bias for the day was weak. I took a couple ER2 points to cover the loss plus a point of profit, then went short when it nosedived. Fed days are always nuts.
    #18     Aug 8, 2006
  9. It was nearly certain that they would pause.


    Nail in the coffin was the oil pipeline news yest.

    I didn't post that before the fact because you can't afford my consulting fee.
    #19     Aug 8, 2006
  10. Here's how you make money on Fed day.

    You fade the fade of the fade and then you fade that fade, and wait until you can fade the fade of the previous fade.


    #20     Aug 8, 2006