US Open Flu?

Jun 22nd, 2009 | By | Category: General Comments, Mike Bellafiore's (Bella's) Blogs
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I have missed the past two trading days because of the flu. I know what some of your are thinking. Hmmm. Bella loves watching golf. And he is always blogging about how much he loves that Phil Mickelson. And Phil made a run at the Open today. The US Open was just in Bethpage. Was this the US Open Flu?

Unfortunately it wasn’t. But I am now officially better. And a little disappointed that I missed the action in RIMM and APPL the past few days. GMan wrote a great blog about hanging in there and grinding it out in RIMM.

As an intraday trader I have learned information gained from watching my stocks print and trade was superior to the charts. I ripped through some charts after the close in preparing for tomorrow’s trading. It is hard not to notice that everything traded down today. And most of everything finished near its lows. GS, WFC, RIMM, AAPL, IBM. All the bigger stocks were sold.

And now from a technical standpoint I know that SPY 88.50 is important. Technically, we should bounce off of SPY 88.50.  SPY traded between 88.50-93 for awhile before finally breaking out. We should especially bounce off of this level the first time.

But I must do more than just get ready to play a bounce off of 88.50. 1) Will the bounce start above 88.50? If so what will I look for to enter this trade? 2) Is there some selling in the market that should cause me pause to play the 88.50 SPY bounce? I need to talk with the guys on our desk who have seen the selling to make a better determination. 3) What stocks will I play for a bounce? IMB, GS, RIMM, APPL, FCX, WFC seem the most obvious, but I must look through my charts to find the best stocks for me. 4) We are still a distance from 88.50. How can I make money on the short side down to 88.50? 5) What happens if we break 88.50 SPY? What is my trade then?

Remember if you are playing for a bounce of 88.50 SPY, have a list of stocks ready to go with great prices. Near 88.50 buy just a taste of the stocks you wish to trade. Wait for SPY to hold higher. See which of the stocks that you bought a taste of are trading the strongest. Buy more of these stocks. Below 88.50 SPY you must exit your stocks. Set plans to exit your stocks if they trade in your favor.

Tonight is a night to start preparing for the possibility of a bounce off of SPY 88.50. Best of luck!

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SPY 3-month 6-22-09 88.50 level

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  • http://www.investingwithoptions.com/ Steve Place

    Are you sure you didn’t mean 8750? Chart here: http://chart.ly/29yz45

  • http://www.investingwithoptions.com/ Steve Place

    Are you sure you didn’t mean 8750? Chart here: http://chart.ly/29yz45

  • Bella

    Steve,

    I like your 87.50 SPY level as well. Thxs for sharing. But we have not closed below 88.50 SPY since April. For us, this is our first support level. Let me be clear. I will not load up for the bounce until we hold 88.50ish (around this level) AND THEN hold higher. This is our level and I will be ready to trade around these levels whether it holds or is violated. That’s why it’s called trading.

    Thxs for your charts. Very interested to learn what you are thinking.

    Bella

  • http://www.wallstcheatsheet.com Damien Hoffman

    Mike,

    Sorry to hear you weren’t feeling well. I hope you are doing better now. The flu is like baby-death :(

    Great post about planning a trade at a key level. You definitely got me planning ahead. Thanks!

    Feel better,

    Damien

  • http://www.wallstcheatsheet.com Damien Hoffman

    Mike,

    Sorry to hear you weren’t feeling well. I hope you are doing better now. The flu is like baby-death :(

    Great post about planning a trade at a key level. You definitely got me planning ahead. Thanks!

    Feel better,

    Damien

  • http://www.investingwithoptions.com/ Steve Place

    Bella,

    Good point. Right now I’m looking for stocks/etfs that are close to support levels that I can pick off some longs via put vertical sales or just stock; also looking for a pullback to establish further short positions.

    I see your point about the 8850 level– the price range is the most important to me, that’s when I’ll be bumping down to smaller timeframes to see if bid holds.

    Just one example, HES at 49.50 has not successfully broken since it got above it in Jan. Def on my watchlist.

  • http://www.investingwithoptions.com/ Steve Place

    Bella,

    Good point. Right now I’m looking for stocks/etfs that are close to support levels that I can pick off some longs via put vertical sales or just stock; also looking for a pullback to establish further short positions.

    I see your point about the 8850 level– the price range is the most important to me, that’s when I’ll be bumping down to smaller timeframes to see if bid holds.

    Just one example, HES at 49.50 has not successfully broken since it got above it in Jan. Def on my watchlist.

  • http://www.truthaboutflu.com/ Flu Mask

    At least it wasn’t swine flu.. Maybe you should have worn a flu mask anyway.. :P

    In all seriousness, though, glad to hear you are feeling better.

  • http://www.truthaboutflu.com/ Flu Mask

    At least it wasn’t swine flu.. Maybe you should have worn a flu mask anyway.. :P

    In all seriousness, though, glad to hear you are feeling better.

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