Wed August 15, 2012
In our weekend update August 4 we showed you this anticipated projection for TLT.
At the time TLT was at 127. We explained that we entered a high risk trade buying Seot 22 puts on TLT at 125 and 122 strike prices. We also plainly stated this was a high risk trade so if you were not interested in assuming risk, don't read further. Today here is how TLT is playing out.
Bingo, spot on correct. Now if we were soliciting paid subscriptions to The Market Perspective we would mass e mail with the typical hype of market letters, about like this
Discover the secret of 186% returns in two weeks
Options aren't for everyone just the knowledgeable investors with an edge, like yourself, want the edge?, well then send us $X for a subscription to .....
But we aren't like that. We publish this blog to help investors world wide, and frankly to burnish our reputation as a Professor who can actually apply academic knowledge in a way to make real people like yourselves real money. Hopefully this will lead to more continuing professional education lectures in the Central Texas area and more readers of The Market Perspective. But I digress, back to business.
I have consistently advocated placing a succession of orders lower and lower to buy into extreme lows. Here is the result of my orders for TLT 122puts
7/19/2012 5 1.06
7/30/2012/ 2 .87
7/31/2012 2 .80
8?2/2012 2 .73
8/2/2012 2 .66
The result was acquiring 13 at an average cost of $.81. Today they closed at $2.41, a 174% increase, my 125s are doing a bit better at 186%.
My original prediction is close to a third wave low. Given the sharp move up from 127 to 130, I am guessing the 4th wave will be a sideways affair following the rule of alternation. (Note TMP consistently claims very little acumen in counting Elliott Waves). At this point one should cash out enough options to regain tht initial investment. That makes sense, you have your original stake back and are then as they saying goes playing with the house money. Note that RSI has reached an oversold extreme. But....
no more than I have at stake here, and with five weeks to run, I am going to keep all 40 of my puts. I ma looking for TLT to trade below 117 before Sept 22.
Like any great Saturday Morning Serial from my youth, you will need to tune in tomorrow morning for an update.
I mean is this fun or what..... GDXJ marked time, another example that different markets move in different time frames.
Testing the 50 day MA.....note the bounce between the 50 and the 87, only TMP is showing these intermediate MAs, ineresting eh?
Tune in tomorrow morning!
Great article, but I do solicit for more market information that will further strenghten the power of forecast over time. I do hope to read further and extend it to others. Keep it up.
Posted by: options trading | September 09, 2012 at 08:51 AM