How to view the entire chart:
1. Try clicking on the name of the most recent article in the column on the right. This will remove the "Archives" list.
2. Try right click on the chart itself and open it on a separate window.
I am sorry that I cannot always make the chart small enough to fit neatly on the left column. I want you to be able to see the details I want to point out.
I Hope this helps,
Juan
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I have entered a PCCRC on ERTS.
I am bullish on ERTS. According to my current Elliott wave analysis, the stock should do well in the months to come. Buying calls would be a good idea, but as we have seen in this markets, the only certainty is volatility. So a PCCRC is always a good idea.
To make money with this system, it is essential to expect an increase in volatility, or in Delta, or an increase in volatility with a strong decrease in Delta. However, if they remain constant, Theta could give us some gains.
Right after earnings, volatility tends to decrease while Delta increases. When a stock has good earnings and the company gives good guidance, it should not matter that the stock originally jumps excessively. This strong reaction at first may be followed by a sideways motion and decline in volatility. Waiting a few days may make the stock attractive for a PCCRC once again. This is my rational for entering an ERTS trade here.
Note the strong decline in IV over the last few days (following earnings) to a level that is acceptable for a PCCRC.
Here is my suggested trade:
And finally, here is the confirmation by Interactive brokers:
For those of you with a Platinum subscription, I have entered the trade in my shared folder. If you'd like to view that trade and others in your account, please follow the instructions here:
http://stockoftheday.blogspot.com/2006/07/current-and-archived-trades.html
Or simply click on the "Shared Trades" hypertext listed here, in the right column ==>>
6 comments:
Juan,
I will follow your trade in the shared folder. However I cant see it in the SOTD folder so far.
I have a few questions:
1) Your analysis says buying you are bullish on the stock. So why are you doing PCCRC?
2) Re IV, now that we can change individual leg IV in platinum, do you use that feature to evaluate the IV rush impact? For example, in your risk graph, Sep IV (30-60 day IV on IV chart) is 29.84% and average Sep IV is around 35. The Dec IV is 32.96% and average >90day IV is 35-36%. How do you use these numbers?
Thanks for sharing.
Rahul
Rahul,
Try updating your share transfer. You should be able to view the trade then.
Juan,
Can you explain how to read the Refined Elliott Wave analysis on the charts you displayed? This will be very helpful to us, especially for those who do not have or use the software before. This will enable us to follow your thoughts and projections in your blog.
BK that is a big subject all its own.
There are a lot of books about the subject, perhaps I could introduce the subject in a series of articles, but you can certainly check books authored by Robert Prechter.
In the mean time, you can interpret the charts I post by looking at the trapezoid on the right side of the chart as the forecasted target in time and price. At the bottom of the chart you see the rating (<80 rating is unreliable, >100 is highly reliable). The highest and lowest price targets adn the nearest and farthest expected time frame to hit the traget.
Juan,
Thanks for the reply.
I have no problem with the wave counts. But, I would like to understand the meanings of the trapezoids shown, e.g. the smaller, thicker trapezoid vs the bigger, but thinner trapezoid. How do you interpret them and use them in the trading?
Thanks!
The trapezoid match the legend below.
In the example, the inner trapezoid shows you the LIKELY scenario while the outer trapezoid shows you the POSSIBLE scenario.
I suggest you make judgements based on the INNER trapezoid. In the case the nearst likely is Nov. 2006
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