Blog Flux LinkLog: Outgoing Link Logging and Tracking for DAYTRADING FDAX FUTURE DAYTRADING FDAX FUTURE DOW JONES BLOG

Thursday, May 11, 2006

TRADES AND MARKET MOVEMENTS

After a couple of days I was finally able today to place some orders on the FDAX and on the DOW future.


What was the reason for not trading? Well, the market did not came up with my favourable setups but just trended upwards very strongly, every position would be unsecure. We have to see if the market wil revearse from here for a more longer time or just a blow off after FED's decision and suggestions about further interest rates.


Joao and fernando of Hello Dax, a blog on which I am invited to write something about futures, propose a setup for a winning option strategy on the DAX. I have some doubts about this.


Movements on markets are not linear as they suppose to assume but rather random walks, certainly in the short and middle long time span. Markets move in a jagged fashion which may be demonstrated by comparing distributions of returns over various time periods. Just look at the graphs below.


The fact that the range of the 5-day distribution is nowhere near five times the width of the 1-day distribution (in terms of max to min) tells you the market
almost never moves directly from point A to point B. Off course this is a valuta index but you may expect this being the case for stock indices too. Options are very susceptiable for such movements.








Wednesday, May 10, 2006

BEARS: ALLWAYS UP ?

Fridays outbreak at the markets must be something of a killer for the bears as Stephan Vita notes on his blog. They may think they are right and the markets wrong..The Dow Jones tries to hit all time high, attracted by it like a magnet.
See chart of the Dow since 1935. Allways good to see and now you know why our queen became so rich.




The European indices still some 25 to 30 % away from the highs of 2000, so they have a long way to go. See chart of the Dax since 1990.






Monday, May 08, 2006

MARKETS UPDATE

Both the S&P 500 and the Dow Jones closing to year highs eploring new territories as you can see in the charts. The broader Russel 2000 (symbol: $RUT) at all time high. We cannot go up forever, what are the underlying reasons for these uptrends? I don't know and it doesnot bother me either. I do know we will correct someday, but not now.