Let’s Go Long – November 15, 2011

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After weeks of neutrality, the IWM robot has finally found a high probability trade on the long side.

From a reward-risk perspective, the logical reward could be a test of the 200-day moving average (77.58), at the top of the second cluster resistance. The actual selling pressure strength is quite light between the limit entry of 73.28 and the 200 dma: excluding daily levels, only weekly pivot (73.88) and weekly R1 (76.14) could act as potential speed bumps. At least, this is the theory in a news-neutral environment.

On the risk side, I feel quite comfortable with the setup. Not only do we have a fail-safe stop and reverse signal pending if the 20 DMF turns short, but we can also enter the trade very near a massive support cluster with a total strength of 27. Yearly pivot (71.84) and quarterly pivot (71.25) have acted as a successful support confluence many times in the trading range and the initial stop (68.69) will be further protected by the very symbolic 50-day moving average (69.89). If the robot can enter today below the limit price of 73.28, he will adjust his stop 6.26% below the actual entry execution price.

Tuesday is also a potential turnaround day in opex week and that scenario will be helped by a rather important POMO and Twist operation from the FED. The usual pattern would be weakness early in the day followed by a strong intraday reversal. All in all, a pretty satisfactory setup for an opportunistic trade objectively confirmed by the robot.
Billy

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If the robot can enter today below the limit price of 73.28, he will adjust his stop 6.26% below the actual entry execution price.


Billy

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I must ask, Billy: How did you determine that the robot is a male? (Until now, in my mind's eye she had been a curvaceous woman.)

Cheers,

Neil

[QUOTE=Neil Stoloff;18527]I must ask, Billy: How did you determine that the robot is a male? (Until now, in my mind's eye she had been a curvaceous woman.)

Cheers,

Neil[/QUOTE]

Neil,
The robot is actually God! Now, how do you determine if God is a male?
Billy

[QUOTE=Billy;18528]Neil,
The robot is actually God! Now, how do you determine if God is a male?
Billy[/QUOTE]

Funny -- At the poker table when a player is all in they sometimes pray to God to win the pot; I can't resist saying, "She's too busy to listen to your prayers."

I've got women on the brain, I guess....

Neil

At least according to Frank Sinatra

Don't like the song much, but it is an American song and an American market.

In any case, may She be with you.

Question: ([U]Can someone post a max pain chart?)[/U]

Also, TVIX can serve as an excellent hedge when necessary. A little goes a long way.

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Question: ([U]Can someone post a max pain chart?)[/U]

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[url]http://leavittbrothers.com/blog/?p=5033[/url]

From Andrei's link:

[I]Overall Conclusion: The bears again placed bets to profit from a sell-off, and again, barring solid selling pressure the rest of the week, they will lose. Flat trading between now and Friday’s close would cause lots of pain. However, a slight move up would cause even more pain.[/I]

[URL="http://www.youtube.com/watch?v=foyLJ3GJAAw&feature=related"]Luck be a Lady[/URL]

for what it is worth, a chart:


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Please excuse my ignorance but what does DPP stand for? thanks in advance

I take that DPP means Daily Pivot Point? Thanks in advance



[QUOTE=nickola.pazderic;18539]for what it is worth, a chart:


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