Serious manipulation

[SOL]

Weinstein is a good book. I have read literally hundreds, most crap. He is straightforward and easy to follow. One issue is too tight stops if Sol is correct regarding future price volatility. And I found other breadth indicators to be more reliable but those he uses are fine. In his day, it was probably fine to use widely published stuff but options activity and dark pools now provide additional data to consider. I also monitor bonds and commodities (principally gold and oil) plus US dollar behaviour (Forex).

Another issue is the magnitude of gains is capped by waiting for the 30ma.

My other favorites are volume, none of which he would have used back in the day. Volume by price, Volume weighted moving average, peak energy volume. And bollinger bands. Tons of stuff on the internet (YT is very good source) to learn how these work with price.

But none of it matters without the key component of psychology or sentiment.

Thank you, Mark. I will add this to my notes.
The technical indicators are above my head right now, but I am trying to learn.
Even though I set up volume, volume by price, sma(20), and bollinger bands on my platform, they don't tell me anything. I still feel like it is all a guess.
I do like the 5 minute chart. I feel like I could trade that eventually.
I have been trying to decide a percent of a profit I would be good with selling my shares, especially with Sol saying we should sell at some point.
Personally, I am beginning to think I would prefer to hold most of my shares and sell covered calls against them and just weather any future drop in the market. The market has dropped so much already, I might as well just hold and do more with options.

We will be looking at a strategy where puts can be used also. It will be mentioned briefly in the next update. I am taking small breaks and responding here and there while I work on it.

So, for example, say you are down 20% on a position. You need cash. You sell that position on an upward move or, take the worst-case scenario, sell it for a loss of 20%. Now use the proceeds to sell a put with at least 1-time premium at a much lower strike price than you sold your shares at. So for this example, say you bought your shares at 50, you should them at 40, so you are down 20%. Now you sell Jan 2024 35 calls say for 5 bucks or more. If the shares are put to you, your final entry price is 30 bucks. Now, if the shares get back to 50, you are up 66%. But if it's a good company, the odds of it trading to new highs are above average. This strategy can speed up the recovery process significantly. If the shares are not put to you, you can use the proceeds to buy calls and ride them up when the time is right.

[MarkD]

Volume by price is the number of shares traded at a given volume (exchange reported) at any particular price. So it can act like a support or resistance barrier when the longest bar is near price.

VWAP is the moving average of price.

Combine the two and a lot of support/resistance levels become visible. It is not a sure thing but very good especially at extremes, like now.

Bollinger bands are simply a pictorial of price volatility. Price normally travels within 2 standard deviations. Excursions outside the bands are less common and can mean continuation or reversal. Narrow bands mean a break up or down is imminent. That's also important at extremes.

The solid red and green lines are Peak expansion energy (continuous) on stockcharts.com and represent LT S/R levels.

This markup shows where I think price can reverse based on volume levels using red/green (alternating color) support resistance lines.

https://imgur.com/Dn6aIB3

Notice the tail on the weekly candles stopped near the s/r drawn on this chart. It doesn't always work as breadth, sentiment, macro, etc, are huge impacts. Sol is correct that some indicators which are ST are useless. I am uncertain if this type of analysis will remain valid moving forward.

[Yodean]

Stage 1: basing area. After several months decline, start sideways trend. Volume lessens (often starts expanding towards end stage 1). 30 week MA begins to flatten out.
Stage 2: advancing phase. Ideal time to go long when stock swinging out of its base into this more dynamic stage. Breakout above resistance zone and 30-week MA should occur on impressive volume. Usually after initial rally at least one pullback (the less the pullback the stronger the stock).
30 week MA usually starts moving up shortly after breakout. Expect price to move two steps forward and one sharp step back – ok as long as above 30-week MA.
When angle of ascent of MA slows down considerably and prices closer and closer to MA, stock becomes a hold.
Stage 3: top area. Upward advance loses momentum and stock starts trending sideways. Volume usually heavy and moves sharp and choppy. Price tiptoes below and above MA on declines and rallies. Keep emotions in check.
Stage 4: declining phase. Stock breaks below bottom of support zone.

To increase probability of success when trading options
1. Buy a call option only on a stock that is in Stage 2 or is moving into Stage 2. Buy a put option only on a stock that is in Stage 4 or is first entering that phase
2. Buy only an option that has big potential – you are going to be wrong more often with options than with stocks. Selectivity is absolutely crucial!
3. Give a reasonable amount of time before expiration – 40/50 days to 3 months
4. Buy an option that is close to the striking price and, if possible, in the money. Or if it’s out-of-the money, make sure it’s very close to the striking price.
5. Use a very tight protective stop (mental) on option positions – any sign of weakness is a reason to say goodbye to a position

Although I have not read Weinstein's book, I am familiar with his "Stages" stuff. The big challenge with his theories is as usual, they work perfectly in hindsight - like Elliott Waves, etc..

In live, real-time trading/investing, it's not so easy to determine which "stage" a particular stock or sector is in. Also, a stock or sector can be stuck in a "stage" for years ...

E.g. cannabis has been in stage 1 or 4 for years now, arguably.

What stage is Google in currently? Etc.

But hey, good to read a lot, think a bit, and take the parts that work for you.

That's what I like about the markets - talk's cheap, all that matters is the P/L over decades.

[LoriPrecisely]

Look at what they are doing now!
https://www.youtube.com/watch?v=b3nw0Tt8F4Q

[harryg]

That was a very accurate report.

[bpcw]

That was a very accurate report.

When you emigrating!

[Yodean]

Look at what they are doing now!

It didn't get as much press as the BOE stuff but BOJ (yield curve control, currency devaluation) is in big trouble too ... as well as PBOC (China). ECB as well, next, really. Don't forget about countries like Sri Lanka (defaulted already). More emerging countries getting smashed by higher USD.

One conceptual framework I use for all this is the USD Milkshake/Black Hole. One end result of all this is capital flight to USD and U.S. markets, in the intermediate or long-term. May take a while to play out to completion.

Another useful lens to use to view the situation is to view the BOE, BOJ, ECB, PBOC, etc. as extensions of the all-powerful Fed; so the BOJ's and BOE's recent actions could be construed as a form of a dovish "pivot."

With increasing capital flow to U.S. markets, the Fed theoretically could continue to hike interest rates while U.S. markets go up. The foreign capital flight to the U.S. may act as an unofficial form of QE, as the TIT has mentioned previously.

[Yodean]

*****

This is a visual depiction of a small part of the USD Milkshake/Black Hole.

[MarkD]

https://imgur.com/anKAlI9

[Cinnamon]

https://imgur.com/anKAlI9

Excuse my ignorance, but why is this meeting held under expedited procedures. Do it mean another surprise rate hike, to push prices lower. The Fed has been usually loud, its like they suddenly got a pair of balls when before Powell looked like a teddy bear wearing stockings and high heels

[MarkD]

I dunno. The timing is certainly interesting.

[chrisbang]

The expedited language is no different than other Fed meeting memorandum, you can reference those as well. I wouldn't read too much into this on its own.

[Yodean]

The expedited language is no different than other Fed meeting memorandum, you can reference those as well. I wouldn't read too much into this on its own.

Yep. A form of political-financial theatre.

Stocks to the moon!

[MarkD]

Likely cause Credit Suisse (CS)

[Budge]

As the war unfolds in Europe, the capital will flee as usual to the States. But the money supply will have to increase because the dollar will become the only viable currency still standing. That is why you are witnessing the pound and the euro collapse. Things will unfold differently this time. The Fed has been raising rates to fight inflation that will fail because this has to do with shortages – not speculation......

The October 3, 2022 Emergency Meeting was closed to public observation by Order of the Board of Governors because the matters fell under exemption(s) 9(A)(i) of the Government in the Sunshine Act (5 U.S.C. Section 552b(c)), and it was determined that the public interest did not require opening the meeting. That said, the Fed is faced with a triple crisis – liquidity, banking stability, and an inevitable Sovereign Debt Crisis. As interest rates have risen based on domestic inflation rates, simultaneously, the higher rates have undermined both European banks as well as Emerging Markets. The Federal Reserve has become the DEFACTO central bank of the world.

(Martin Armstrong)
https://www.armstrongeconomics.com/mark ... l-bank-qe/