Wow. Lots of you interested in the Christmas trade. Talked to several of you, about Seasonal Patterns, VS Technical Patterns.
Christmas trade is usually Dec 1 through Jan 15th. The Dow Jones big 30 often goes up during this period of time. On average 9% since 1950. So we often play the DIA (1/100 of dow). The Call options for march. 90 days plus.
But we don’t do that blind. We need to see “confirmation” of direction, which means, I need to see some up days, before I invest.
Right now the market is on a drop. Don’t fight the trend, the tend is your friend. SO I am still considering a Christmas trade, but waiting till the market stops going down, goes sideways for has a significant reversal.
I will post tomorrow. as a follow up too. But we are in a downtrend. Thinking about a protective put. I did one a few weeks ago. And it still looks like a down trend.
DIA. Update. Like the RUT. double pipe bottom. If the DIA breaks 351, should go up tomorrow. So looking to do the Christmas Trade tomorrow, if it break resistance of 347. She should go up.
2:05 RUT Update: Sorry. did an update on the RUT. The market (and RUT) is rebounding. In fact at this moment. A double pipe bottom. Therefore, if the pattern continues to 4pm, tomorrow (based on the candle stick patterns). Should be an up day. if the market opens above the right NECK line. Which is 2203. Therefore, if it opens above 2204/5 tomorrow. should be a reversal.
Therefore, I am not going to guess (even though probability) is in my favor. Going to set an order that is like this.
IF The RUT opens above 2205, buy a 2205 Call at market for March 2022. A single call. This has nothing to do with Credit Spreads. A pure directional play. Then let it ride to Jan 15. Obviously, I want some protection if she reverses to. So maybe a STOP at 2180 or 2195 (a mini rut support level). In case it hangs or drops a little