Trap Door And Volatility Band Trades Give Traders Big Bonus

yesterday and anticipated premium opening (“The Game”), daytraders
were ready

for Trap Door and volatility band short entries (see 08/10/05 commentary) as
the

first action of the day. That is precisely what you got, and if you trade
the

SPX
(
SPX |
Quote |
Chart |
News |
PowerRating), it was good for +14 to +15 points on half or all of the
trade,

depending on how you managed it. If you traded the
(
SPY |
Quote |
Chart |
News |
PowerRating) it was good for
1.4

– 1.5 points. There were two Trap Door entries for the SPY/futures. The
first

was below SPY 124.22 (10:05 a.m. bar) which went to 122.08, then reversed up
to

the intraday high of 124.50 on the 10:50 a.m. bar. This was a small loss or

scratched trade. The second entry was on the very next bar below 124.38
which

declined to the 122.83 intraday low before closing at 123.37. There was more
sequence

as 124.42 was the +1.5 volatility band and 124.48 was the 2.24 Fib extension
of

the last leg down on Tuesday from 123.59 to 122.87. There were similar short

entries for the Dow (DIA/futures) and probably easier, as the Dow reversed
from

a 10,719 intraday high, right at the high (10,718) of the previous 16-day
range

from 10,718 – 10.573 which it had broken out of on the downside last Friday

(08/05) which was the Fib time date. Net net, it was simply an excellent day
for

that just before the SPX reversed from its intraday high of 1242.69 (10:50
a.m.

bar) that the
(
TLT |
Quote |
Chart |
News |
PowerRating) reversed down from a 92.10 high at the same time and
the

(
OIH |
Quote |
Chart |
News |
PowerRating) reversed up from the 10:35 a.m. intraday low of 115.73, advancing
to

an intraday high of 118.45. This was accompanied by a big move in crude oil
to

4:00 p.m. which was +4.7% to 66.06. Also, the $HUI, +2.1%, and XAU, +1.4%,

opened strong and remained that way into the close. Actual gold closed at

434.60, -0.7%. The US Dollar ($US) made a new low in this current trend to

87.65, -0.2%. However, even if you did not observe this related inter-market

action, you still took the Trap Doors just based on the actual strategy

because of the early advance, despite the major indices closing red, the
volume

ratio was 54 and breadth +533. It doesn’t take much volume on an air pocket
down

when the Generals disappear on the buy side. The Dow finished at 10,594,
-0.2%,

the
(
QQQQ |
Quote |
Chart |
News |
PowerRating) -0.9% to 39.11 and Nasdaq
(
COMPQ |
Quote |
Chart |
News |
PowerRating) -0.8% to 2158. The
OIH,

+1.8%, led the green sectors, and technology the downside with the XLK -1.1%
and