"you have been "banking" on buying calls on the QQQQ while this index has been sideways for 2 months. Better yet prices have been in this range since early November. So essentially, one could "bank" on buying puts on strength as well. Funny how that works isnt it? "
it's about volatility. Nr7 days and relative strength (NQ v. YM)
when the Q calls get oversold - buy them. every time you have some silly selloff, and the market hits a low point for the day, there have been some great deals in the Q calls. and then I pare them off for profit (i almost never add to a winning trade, but i am generally a contrarian).
"And please dont insult our intelligence with your spread trading the NQ to YM rubbish. The YM was far outperforming on the upside to the NQ until the past week or so. Of course, I'm also certain that you have a selective memory (i.e. you happened to have a good 3 days and suddenly "you been banking" for this entire "bull market"). As you were son."
i have been pimping this trade in ACtive Trader on Financial Chat so feel free to check the archives
prices regress to a mean
YM/ES/ER2 been WAY outperforming the NQ (e.g. Q's)
it has been very profitable to do spread trades on these trying to catch a regression to mean, which has happened. note the NQ (and Nasd Comp) been outperforming the YM recently. this HAD to happen
fwiw, i don't really use conventional indicators. i am big on TA for indexes, but i use primarily Market Profile. Clearly, when one index is trading near top of high volume node and another index (the NQ - which is same as the q's) is trading near the low of the hi volume node, a regression to mean was the hi probability play.
and it has worked.
NQ has actually been setting up a wonderfully bullish consolidation pattern. that's been my analysis for some time. i am long NQ futures, Q's calls, and also have been spread trading to take advantage of the mean regression (which i have mostly scaled out).
the other day, the put/call ratio at 41 strike Q's was FIVE TO ONE. if that is not bullish, NOTHING is
if you doubt this, then spend some time in ActiveTrader on financial chat. i have been pimping this trade strategy for about 2 weeks.
i also (fwiw) have been pimping gold for about a year (been holding MIDSX since 1998 fwiw also), and was EXTREMELY bullish on VPHM after that hyooge selloff, loading up on the 10's and buying a ton of calls, 1/2 of which i have already sold
generally, my strategy is to buy weakness and sell strength, and i use a combination of Market Profile, fundamentals, and "field DD"
my primary income is YM scalps though, which is pure price action - TICK, AD, pit noise, etc.
the NQ's (q's) are in a remarkably bullish pattern
