27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
Some quick observations:
1. Intermediate term support will be found near the 13 week lower volatility band at 1227 this week.
2. Intermediate term support will be found near the old high, which in this case is the April 2010 high at 1216.
3. I am using a Lindsay “Three Peak and a Domed House Count. This has 23 points from low to high. If the SP500 tags the lower volatility band, I think it will suffice to label a point 20 low.
4. Point 20 lows are typified by sharp and sudden breaks, much like their counterpart point 10 lows. If you look back to 2006-2007, you will see that both the point 10 and point 201 lows touched the lower 13 week volatility bands.
5. If you look back to the 74 reading on the RSI on Dec-Feb 07, you will note that is from where the point 20 low began. Fast forward 4 yrs and you will see another 74 reading on the RSI. The moral of the story is that final price high tends to follow the peak weekly RSI by several months.
6. The black volatility bands are 130 wk (2.5 yr) volatility bands. In secular bear markets like we are in, almost all price outcomes are remain inside the upper and lower bands. The upper band is gently sloping upwards into 1353. The final dome, or point 23 high, will not materially breach the upper volatility band in a statistically significant manner.
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
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