Weekly Market Review K200

Daily : Downtrend.

• Lower high lower low.  K200 stop the down move and starts to retrace.  However, the retracement has not hit any higher high.  So, it is still in downtrend.
• K200 stop just below the downtrend line, which happen to be around Fibo 61.80% level, also happen to be below the resistance line of 254.68.
• MACD cross up in this week and heading up wide.  It is still below MA200.
• We will need to see if K200 break above the downtrend line next week, that will be bullish.  Or if it move down and it establish a higher low (means it might retrace up further), that will also be bullish.  Or it establish a lower low (means it continue its downtrend move), that will be bearish.

Weekly : Sideway/Uptrend/Downtrend.

• Weekly chart is not so conclusive.  On the very short term, it is downtrend, if you consider the last green bar (which is an inside bar) a few weeks ago as lower high, we do have lower high lower low.  
• However, if you look at a longer term, from the double bottom, K200 has establish a higher high (green arrow).  The recent pin bar is a higher low.  So, we have a higher high higher low, uptrend.  
• But, if you look at the whole chart, K200 has been moving between 230 to 272/275 since end 2012.  It is sideway.
• K200 ended this week with a bullish bar.  With the long pin bar last week, this development is bullish.
• It also move back up and stay above MA200.  It might test MA50, which is just slightly above it.
• MACD though is heading down, but has stopped opening wide.

Monthly : Sideway.

• K200 continue to move up above and close above the uptrend line.  The bearish bar last week has started to develop into a pin bar.  With 2 more trading days to move, this month bar might not be so bearish.

Exit Guidelines updated

Taking profit should be the easiest thing in Option Selling, especially in Credit Spread.  You either take the 100% credit through the expiration or you take part of the credit before expiration.  As described in this post "Exit Strategy", I no longer wait till expiration.  I only take part of the credit, mostly at 70% of the credit.

Stopping loss is more difficult, in most trading.  However, it is the most important decision to make, especially in Credit Spread Option Selling when the Risk/Reward ratio of the position is almost 10:1.

The below are some updates/refinement made to my Exit Guidelines, to make it more defined.  Hopefully, taking profit and stopping loss is easier with these guidelines.

Exit Guidelines
1. Take profit
- Delta <= 5 (usually about 70% of credit)
- target profit >= 70% of credit
- target profit >= 50% of credit when Days In Trade is <=5

2. Days To Expiration (DTE)
- 7 < DTE < 14
- exit the position before DTE is less than 1 week (start staring at it when DTE is less than 2 weeks)
- exit with whatever profit or break even if possible, else exit with a small loss

3. Stop Loss
- 25 < Delta < 30 and DTE < 30
- Loss >= 200% of credit and DTE < 30

This is also updated in the Trading Plan.

Weekly Market Review K200

Daily : Downtrend.

• Lower high lower low.  Ever since it fell below 250, it failed in the last few attempts to close above 250.  Weak.  However it stay above the longer term uptrend line.
• MACD is still heading down but narrowing.  Will it cross?  Or will it touch and widen again?  
• My view remain bearish.  However, the MERS case is under control now.  We could see some support or even some up move from here.

Weekly : Downtrend.

• Lower high lower low.  Price fell below MA200 and stay below.  Weak.  However, we have a long pin bar.  So, we might have some support here.  We need the next bar to confirm or reject it.
• MACD is heading down and open wide.  Weekly view is still bearish.

Monthly : Sideway.

• Price move down below the uptrend line and up back resting on it.  Still look bearish.  We have about 1.5 weeks to conclude this bar to see if it is a bearish bar or a pin bar.

Weekly Market Review K200

Daily : Downtrend.

• Lower high lower low.  Price failed to stay within the Jun 3rd bar and closed below the Fibo 61.80%.  The resistance turn support at 254.68 didn't hold.  It is heading towards the previous low near 250.
• MACD is still heading down but start to narrow.  My view is still bearish.  Any up move is probably just retracement.

Weekly : Downtrend.

• Lower high lower low.  Price just stay slightly above the bottom of the previous Inside bar range (260.68-251.43).  MA200 is around that level too.  That should provide some temporary support.
• MACD is heading down and open wide.  Weekly view is still bearish.

Monthly : Sideway.

• Price move down back to the middle of the range.  Both the current and previous bar look bearish.  We could see price move down to the lower of the range.

Weekly Market Review K200

Daily : Downtrend.  

• Lower high lower low.  MA200 failed to hold.  MACD heading down and widen.  
• June 4th & 5th bar are both inside bars of 3rd bar.  No direction.  Most of time, it will break in the direction of the trend, that is down.  
• It is near fibo 61.80% level.  And it just hold above the resistance turn support at 254.68.  This may provide some support, or even retrace for a while.  
• But my view is still bearish, unless the future chart shows a different view.

Weekly : Downtrend.

• Lower high lower low.  Uptrend line failed to hold.  Price slightly below MA50.  
• Back to the previous Inside bar range (260.68-251.43).  The 260.68 level has been a support for 4 weeks.  The bottom 251.43 should provide some support?  MA200 is around that level too.
• MACD is making a cross down.  Weekly view is bearish.

Monthly : Sideway.

• It is a obvious sideway market since October/November 2012.  That is sideway for 30 months.