This page last updated: February 20, 1997 @ 7:30PM est
The question is -why don't you trade more often........
Welcome back traders to a pre-expiration chat session. In last evenning's commentary the Prudent Trader changed his opinion on the market. Despite being in a BUY condition and trending down to a possible support level where calls might be purchased for the next leg up, I called off such a venture. Even in my morning alert post, I said that for those who felt compelled to go long at 785.50 , I recommended a very tight protective stop of 2 points below 785.50. The 1 minute OEX chart illustrates the significance of the price point of 785.5 that I spoke about in my commentary and the protective stop of 783.50.
You
will notice that once 785.50 was penetrated on the down side, it was not
risen above again. Also, the 2 point protective stop of 783.50 , if utilized,
did not whipsaw you. Although the Prudent Trader did not feel comfortable
going short (because it would be in anticipation of a FULL SELL signal)
I did recommend that traders who went short at OEX 785.5 use the same 783.50
price point to close out their position if the index retraced above it
once we had decisively broken below that level in late afternoon.
Perhaps one of my better calls was my PAIN FREE exit price point. At around 2:00PM est. I mentioned in the AVID TRADER chat room that the price point to exit a put position for a pain free experience was at OEX 779. I used that price as the "approach price point" to 778. As we all should know, the Prudent Trader has learned that we don't always get everything we desire in life. Options are no different so I use "approach" price points to exit trades. As it turned out, the intraday low of 779.04 proved the Prudent Trader's "approach" strategy a sound technique, at least for today.
Enough of the historical commentary. You readers deserve insight into the future. As of the close Thursday, the Trailing Indicator is officially in a FULL SELL condition. If you view the OEX daily chart you will see that the index closed below my dark cyan trendline that has been so accurrate. But before anyone gets too excited I want to caution everyone that haste will make waste. This index has several support points hovering just below the current close of 781.97. Between OEX 776 and 779 I see multiple price points that could temporarily serve as "bounce poiints". The price that I as a position trader would chose to go short is at OEX 783 AFTER THE OEX FAILS TO RISE ABOVE 785.50. If I get the chance to go short I will use a protective stop of 787 to close out my short position with a loss. Also, tomorrow is options expiration and I would prefer NOT to get involved with that guessing game if at all possible. My near term price point to exit the trade profitably (and without pain) would be at OEX 775.50 which would be the "approach" price point for OEX 774.50.
That's all I have for now. It's off to see STAR WARS with the rug rat. Remember, I will be around in the morning to monitor the situation and provide updates which will most certainly be needed. I hope your day was profitable. I hope the Trailing Indicator kept you out of harms way. As far as the title for tonights commentary I would like to suggest something. I may not trade often, but I always have a plan with a strong opinion on what to do even if my coins aren't in play. Sometimes I think that is better for you the reader because my objectivity is there just the same to keep YOUR emotions in check. Think about it. and have a pleasant evening.
