Weekend Video edition for the July 4th weekend. My first video that did a quick recap over the dollar markets was too long and I am limited on time to do it over. So I will post it in my video that I will have up before market open that will show some strategies how to play some of the key market moving stocks( GS, AAPL, XOM). I have those charts with information on them in the part 3 video. Enjoy the videos and lets get ready for a great trading week coming up!! Email me if you have any questions. There are 2 videos here.

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When Thursday’s rise in FAZ, after a close at 5.14, looked to have topped out after hours at 5.22, I sold out:

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Hey guys,
I have compiled a 3 part long video that not only talks about the SPY to its full extent but also about 8 different charts and how we’re suppose to read into this type of market. This includes XLF, GS, VXX, SKF, AAPL, AMZN and the USO. 

(more videos below)

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Tony Sun: Founder of KhronoStock.com

One simple way to translate the VIX index into an easy to understand monthly implied volatility is employing the following equation:

Next Month Expected Volatility = VIX/100/sqrt(12)

The result simply says that over the 30-day period, the SP500 is expected to have a volatility of plus/minus a given percentage.

The following graph shows the historical next 30-day expected volatility from 1990 to 2009. This does reflect the change in VIX calculation method that was instituted in 2003.

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There will be no intraday commentary today as the markets are closed, but you are welcome to post any thoughts that may be interesting or related to today’s or monday’s trading days.

The market has been nearly ticking off with the precision of a clock. The head and shoulders pattern on the daily, which it seems almost everyone has been expecting has all but completed itself. The overbought conditions on cum. tick, breadth, volume, etc, and the negative divergences on MACD and RSI have materialized in what was a very big down day (considering the light volume conditions and the positive bias going into a holiday weekend). I expect this momentum to carry over to the early part of next week, during which we’ll finally test the crucial level of 880 on the S&P – however, for a short-term technical prognosis I will probably be looking more at the Dow, as it has been giving clearer signals.

Below is a chart and strategy summary of a gap-down strategy I use, which has been rather accurate (+90%) when the conditions were met. Though it considers shorting and covering 100 shares of SPY, I actually do the trading with puts of SPY, TNA, etc., which brought in gains well over 50% in each of the two sessions. If you had decided to take the overnight risk, and got in a day earlier (on the case of a bear flag, a topping shoulder, negative divergences, etc.), your profits were over 100%. In that case the signal can be used as confirmation/foreshadowing of the further move down.

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$DJUSRE, the Dow-jones US Real Estate index, which URE and SRS lever, has just made a bear cross of the 20-day MA down thru the rising 50-day MA. If things close this way a few days, well, look what happened the last time this and all the other beargasms occurred:

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3:59pm
3rd Strongest day for my portfolio for the year… i took off some more PUTS on the SPY… and AAPL… leaving me with small short positions into monday… and Gold. I also own some SRS and VXX and some SKF Puts which i plan to hold… Today’s market action was very indicative of the H&S that we have forming on the daily, and even though the volume was not there. It was the day before the july 4th holiday (3 day weekend) AND it was stronger than yesterday’s volume nonetheless!!! HAPPY JULY 4th TO EVERYONE, I’m going to go golfing for the rest of the day, and hopefully you guys will get to relax as well. I should have a video out either today or tomorrow. 

3:45pm
Inverse H&S on the 1 minute SPY, AAPL, GS into the close… taking more profits around here..  

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4:19pm

Well guys today was a great day everything worked out according to plan based on last nights video. I’m going to post a video later tonight or sometime for sure tomorrow. I will do a market update video and then another video just looking at some stock plays. Hope all of you guys got a chance to participate in the nice market action to the downside and book some profits. Today was a real boring day after the open and I would have been better off watching paint dry!!! In any case have a great weekend guys and lookout for the videos.

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Hey guys,
First of all it’s my honor to give you the 1000th post… stocktock has been such a great community for me and for everyone I know, and it’s great to be here about a year later with 1000 posts.  I want to thank both Craig and Scott for letting me blog here and to thank you guys for helping me become a better trader with the questions and feedback you provide.

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