06-29-2009, 01:16 PM
The following question was asked by email and I thought the research by our Senior Analyst was worth repeating:
What do I look for if I think the market is going down and I want to buy cheap puts using DT volatility comparison and range?
If you think the market is going down and you want to buy cheap puts using the DT Volatility Comparison and Range use scanning routines that help you identify those stocks still not correcting during an overall, sector or group pullback. and check out those stock symbols by linking the charts as a daily with the Matrix. Double click on the stock symbol generated by a Matrix result and it will change a linked daily chart you have set up for a quick review. Try using something like and Advanced Options Scan: CIV Put Range <20 , Bollinger BreakUp, Broke Below 50 MA, Large Volume Stocks (if topping high volume can often show up), try bearish candlestick scans, Three Bars Down, Gappers Down, Largest Range could be suggesting topping if looking for tops, etc.
.... maybe set your Sector/Group to a specific area that is vastly overbought or where you think the topping acting is the greatest and the scanner will only show those results.
... if you want to buy a put or call you would be best advised to look for a stock that is at its 80 to 90% LOW range using DT Volatility Range.
Another technique you can do is, whenever you find a scanner result you are interested in, compare it with the Group Rotation feature to see if the stocks Group is showing any kind of rotation down and changing from Blue to Neutral or even to Red. that basically confirms institutional money is rotating out of the overall group which improves your odds if trying to buy Puts when picking the tops.
What do I look for if I think the market is going down and I want to buy cheap puts using DT volatility comparison and range?
If you think the market is going down and you want to buy cheap puts using the DT Volatility Comparison and Range use scanning routines that help you identify those stocks still not correcting during an overall, sector or group pullback. and check out those stock symbols by linking the charts as a daily with the Matrix. Double click on the stock symbol generated by a Matrix result and it will change a linked daily chart you have set up for a quick review. Try using something like and Advanced Options Scan: CIV Put Range <20 , Bollinger BreakUp, Broke Below 50 MA, Large Volume Stocks (if topping high volume can often show up), try bearish candlestick scans, Three Bars Down, Gappers Down, Largest Range could be suggesting topping if looking for tops, etc.
.... maybe set your Sector/Group to a specific area that is vastly overbought or where you think the topping acting is the greatest and the scanner will only show those results.
... if you want to buy a put or call you would be best advised to look for a stock that is at its 80 to 90% LOW range using DT Volatility Range.
Another technique you can do is, whenever you find a scanner result you are interested in, compare it with the Group Rotation feature to see if the stocks Group is showing any kind of rotation down and changing from Blue to Neutral or even to Red. that basically confirms institutional money is rotating out of the overall group which improves your odds if trying to buy Puts when picking the tops.