Why The Angel Bear?
Going into Gare Du Nord (Paris) the other day to pick up a hire car I noticed the big red bear with wings. Why was it there? And why am I mentioning it? I’ll discuss below; but first let’s look at the market.
SPY Chart
SPY seems to be stuck in a Darvas box (again). As I anticipated, after breaking out of the bear market quite decisively it then ran out of puff and came back to test the bear threshold as support. It wasn’t as exact as I would have liked (I love it when things work out exactly) but you get the general idea.
One of the things to notice is the last 2 days have been doji candlesticks – where the market opens and closes at the same (approximately) level although it varies during the day. If you look at what actually happened intraday you can see how they are formed.
The intraday chart is not as clear as I would like, but I am working on a slow internet connection (rural France!) and my usual sources are finding it hard to cope.
So the question is – where to from here? From my perspective , everything looks normal. We’re probably in for some range-bound trading for a while – when it breaks out of the box then we’ll know where it is going.
SPYG Chart
The SPYG chart is following the SPY chart very closely, even to the 2 dojis, so all the comments about SPY are relevant to SPY.
QQQ Chart
QQQ (the Nasdaq ETF) isn’t part of the ITM strategy, but as the stocks in it form a large part of the SPY ETF it is worth keeping an eye on.
QQQ is forming a very similar pattern to both SPY and SPYG. It is in a holding pattern too.
VIX - The Volatility Index
There are no real concerns there – it is the lowest it has been since the Covid bear.
ITMeter
Daytrading Experiment
No news here. I have been too busy enjoying myself to actually settle down and do some work. I haven’t even been following what he is doing or what his results are. When I get back in August I will start it again – promise!
Why The Angel Bear?
When I saw the sculpture, I thought that it had something to do with the stock market (talk about a one-track mind) but on checking I discovered that it was created in 2015 and is to draw attention to the forthcoming extinction of polar bears due to global warming.
Naturally, I don’t want polar bears to die out, so I did a little research and came up with the following figures:
Population of polar bears:
2015: 26,000
2020: 30,000
I can’t get any more recent figures, but in 2020 the status was:
Results of three new polar bear population surveys were published in 2020 and all populations were found to be either stable or increasing.
What has this to do with the stock market? It is a reminder to look at the actual figures: see what is actually happening rather than what people think is happening.
Back In France
Back in France, near the beautiful Mont St Michel. It is one of the most beautiful places ever, and I have been coming here for decades. When I first came there were hardly any people around, it was off the beaten track. But I am shocked at how many tourists there are! – now it has 2.5 MILLION visitors a year! Crazy! It has only been a few years since I was last here and it has changed so much – not the island, but the surroundings. Standing room only!
But – as in trading – don’t do the same as the crowd. Instead of staying on the east side of the canal where there are crowds, shuttle buses, and massive parking places, I drove over a small local bridge and headed towards the island on the other side. No-one on the road. No-one parked anywhere. When the road stopped, I walked for a couple of km along a track with incredible views – like this one – and didn’t see another person. No tourists at all. So – being philosphical – doing things differently to (from?) the crowd definitely pays off.
But – the weather isn’t so great. I am craving sun and swimming, so heading south. If you want to see any more photos you can follow here : https://www.facebook.com/heather.cullen.756 .
Heather
This is just a first draft – I will fix this up later and put in the Q&A comments and send the email. Please check back later!
8 thoughts on “Angel Bear”
Hi
if I use the price of the spy and I buy the 6 month option at 50%,ie spy at 400$Ibuy at 200 call ,would that reduce the volatility,and provide almost twice returns up or down
your opinion matters to me
PS.I am an avid cyclist I have done the Loire River trail on a bike also done La Bretagne and Mont San Michel
c’est beau la France
respectfully,
Raymond
Hi Raymond,
if you buy at half the current price (e.g. today it SPY is at $450 so a strike of $225) the you will have 50% leverage – in other words if SPY goes up $10 you will go up $20. So yes, you will get twice the returns.
Volatility of the option is related to the leverage – so you will be twice as volatile as just buying SPY shares.
Hope this makes sense – if not pls get back to me.
Re cycling in Bretagne – yes, totally beautiful if you get the righr weather! It was a bit dreary, so I have headed south for better weather, just arrived tonight south of Cognac, in a beautiful 1700s property in the country – and the weather looks as though it is cheering up – Hooray!
h
Hi Heather: I apologize for belaboring the point. Yes, I look at many time frames also; however, my question connects to the application of the rules for, specifically, the Signals you have very nicely set out in a Summary Section on page 72 of your IMTB book; ie, the ITMB In, ITMB Out, and the ITMB Back-In signals.
You may not have the book on your trip, so I can certainly wait til you return.
Thank you again. Buck
HI Buck,
just been able to get back onto this website after 4 days – Fastcomet was jacking up about the location and refusing to talk to me. Support suggested I install a VPN – yeah, right, on an insecure connection, great idea!
Anyway, new place, finally got in.
All of the signals are based on the daily chart – and whatever is used in the ITMB book is the same as is used in the ITM book. I am afraid that I don’t have any of my books with me so I can’t check right now. I will be back in Australia second week in August, please ask again then!
h
I asked this question earlier today, but here goes again in a different place:
When using the SMA indicators (10,20,200) for both bear and bull situations, what time period do you use? It appears, from your books, that it is 6 months, but I am not certain of this. Also, if 6 mo. is correct, why? And, under what circumstances, if any, would you adjust the time frame?
Thank you, and hope you continue to enjoy every moment of your trip!
Buck
Hey Buck!
I use the day charts and the day data (OHLC). The 10 SMA is the 10 day Simple Moving Average, the 200 SMA is the 200 day SMA. The number of days I look at on the chart varies – as in I will look at the 10 year chart, the 5 year, the 1 year, the 6 months the 1 month the 1 week etc.
I thinnk the confustion may be what charts I am using to illustrate a point in the blg or in the books?
I seelct the time frame ofthe chart to be what I think is needed to show the pattern – but that is just a snapshot, it doesn’t affect the SMAs that I use.
Im not sure if this answers your question – please get back to me if it doesn’t.
(and thank you – having a wonderful time, just love travelling and am so grateful that I can do it. It was always my dream from a very early age!)
h
Hi Heather,
Thank you for continuing to update us on the market. I love reading your blog and your comments back to questions.
I recently came into some extra funds and was wandering if I should sit tight with it until the market comes down a little or if now is still a good time to start a new SPY option?
Thank you!
Hey Charity! How wonderful about your extra funds – that is great news!
I can’t tell you when to get into the amrket – I wish I could! I can just tell you what I would do which is look at the recent pullback as a good time to get in. It may come down lower, but it may go up higher. We don’t know.
I just now that, for me, every time I have decided to get into a trade, and then waited for a good time I always miss out and regret it, so I have the rule that if I have decided to get into a trade I just get in.
But that is me, not saying anyone else should do it, but on the whle it works for me.
Hope this helps, and congratulations on your good luck!
(and thank you for your kind words)
h
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