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Da Bing
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Background in Real Estate, Finance and IT Security. Long term prefer dividend champions and on the trend plays prefer the T Theory Methodology.
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  • T Theory Study

    One of my favorite books that got me excited about becomming an investor was "Pit Bull" the story of Marty Schwartz. I first read about Marty through "Market Wizards" which really sparked my imagination of how to make money through stocks, options, futures etc. Marty made reference of Terrance Laundry and his T Theory. Sadly Terry passed away and although his legend survives through those of us that study his methods and attempt to immulate what he taught us, we lack a solid group of T Theory students.

    It is my goal to demonstrate the Magic T Theory and how it can still be used in today's market. Perhaps the most important indicator that was used in Terry's weekly was the volume oscillator below

    Couple this with this daily chart and you have a powerful tool to help navigate overbought and oversold market conditions. What is important to take from the above chart is when the volume oscillator moves to extreme highs we are in an overbought condition and inversly when we get low we become oversold.

    It is my observation that currently we have extended beyond the upper band and with the MFI extending to overbought conditions we may be ready for a correction. As you can see in the middle of September we were in a similar situation and the market sold off to the mid-channel.

    My future articles will be dedicated to observations that I make based on years of studying T Theory and attempting to apply this knowledge to the above charts.

    Disclosure: I am short SPY.

    Additional disclosure: Today I purchased Nov SPY $170 puts as insurance in case of a market decline.

    Tags: SPY
    Oct 30 4:21 PM | Link | Comment!
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  • bought #SPY Nov $170 calls for .33, will post my trade ideas and update how they are doing #transparency
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