Tuesday’s Levels
Monday Recap: We had
another good day Monday with a profit of $390. In our prediction for Monday, we
said the major indices would move higher and we pegged second level resistance
near 10520. In fact, the cash Dow started higher, quickly moving to 10520
level. For the balance of the day, that 10520 level proved stiff resistance, as
the market’s measure essentially traded in between 10520 and 10500 for the
balance of the day, closing at 10515.
Like the Dow, the cash S+P reached the highs of the day early in the morning
and then traded in a somewhat predictable range. The S+P ended the day in our
value distribution region, closing at 1145.20.Â
The question is, will we break resistance?Â
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^next^
On the cash Dow, we’ll watch the 10550-60 level. If this is broken, we could
move to 10610 rather quickly. On the cash S+P we’ll watch the 1050 level. If
this is broken, we could move to 1060-63 pretty quick. On the NAS we’ll watch
resistance just below the 2100 level. However, if the markets can’t break past
respective resistance, it could prove to be a market negative and lead to
selling.
Portfolio Strategy: This morning we sold a June mini Dow
future, which brings our portfolio to slightly negative. If we break past
resistance we’ll likely quickly switch to a positive stance. Stay close to your
e-mail.
Yesterday’s results and current portfolio status:
Daily Profit: $390
9700 April Mini Dow Put Options: We are long 2 put options. Yesterday they
closed at 2, down 2 (each point is worth $5). Loss on the day with this position
was $20.
9900 May Mini Dow Put Options: We are long 2 put options. Yesterday this option
closed at 47, down 16. Loss on this position was $160.
10000 April Mini Dow Put Options: We are short four put options. Yesterday this
option closed at 4, down 3. Profit yesterday with this position was $60.
10400 April Mini Dow Call Options: We are short two call options. Yesterday this
option closed at 130, up 25. Loss yesterday with this position was $250.
10400 April Mini Dow Put Options: We are short two put options. Yesterday this
option closed at 30, down 40. Profit on the day with this position was $400.
10500 April Mini Dow Put Options: On 4/7/04 we bought one mini Dow put option
for 101. We are now short one put option. Yesterday this option closed at 60,
down 30 from the previous close. Profit yesterday with this position was $150.
Mini Dow Futures: We came into the day flat the mini Dow future. We bought
one mini Dow future at 10458. The mini Dow future closed at 10501. Profit
yesterday with this position was $210. We are now long one mini Dow future.Â
(Note: this morning before the opening of the cash market we sold this mini
Dow. As this is a report on yesterday’s profit, it is not accounted for in this
profit/loss statement).
Trading Method:Â Mark Melin strategically short sells options and then
directionally trades within this short options portfolio, always hedging one
position against another to generate consistent profits.
DISCLAIMER:
Past performance is not necessarily indicative of future results.
There is a substantial risk of loss in commodity futures and options
trading. It is not suitable for all investors. Only you can determine
whether this trading suits your particular needs and risk tolerance.
All profit and loss representations are hypothetical and based on the
Real time signals generated by The Dow Trader. The results have not been
adjusted to reflect slippage or commission charges. No representation is being
made that any account will or is likely to achieve profits or losses similar to
those shown.