QSII ==> The Merry Christmas Winner

[Dave]

The chartsters hoped they were wrong, and it now looks to me like MM is positive on this one...

So my question is, would chart/technical trading work at all if only a few people used it? My feeling is that daytraders feed off each other using charts, trying to recognize patterns or trends before they are created by people using the same or similar methods. Kind of a chicken or the egg thing...

-Dave

[spikefader]

Dave, buy a stinkin put will ya

[spikefader]

The chartsters hoped they were wrong, and it now looks to me like MM is positive on this one...

So my question is, would chart/technical trading work at all if only a few people used it? My feeling is that daytraders feed off each other using charts, trying to recognize patterns or trends before they are created by people using the same or similar methods. Kind of a chicken or the egg thing...

-Dave

I probably should explain that comment since you may not know my humor. I'm being light-hearted, but serious at the same time.

Your question is an interesting one, and prompts some thoughts.

As an advanced TAer who understands the deeper limitations and benefits of charting (hope that doesn't sound arrogant), I think you're asking the wrong question. It's not so much if it's valid or which came first the chicken or the egg, but a chart just IS. It's real. It exists. Whether a lot of people follow them or not isn't the point. It is not how many people follow each TA indicator, but it's what is reflected in the chart that is the important thing. Reaction to support and resistances. Charting merely attempts to define where those support resistances are. Charts don't lie. Charts are never wrong, they just communicate was IS until it ISN'T. Anyone looking for a chart that will tell you definately what WILL happen for sure just isn't ever going to find it. It's a futile attempt. Support is support until it isn't and resistance is resistance until it isn't. I have bearish bias on QSII until I don't. It's nothing personal, it's just factual. Charts are very often going to be 'proven' wrong when the lines in the sand they define are crossed by market forces that go beyond the interpretative reflection of the chart.

Honestly and seriously though Dave, insurance with a put for QSII is a very smart thing to do right now. The water is murkey for it and there's shark lurkin in the area. Get to cover and wait for clear water so you can venture forth and play when you know it's safe!

Best to ya.

[skiracer]

What I was curious about is what Dave meant. Was he implying that the TA advocates were hoping that they were right and that the stock would fall like they predicted and prove MM wrong on this one just for the sake of being right. I can see us disagreeing with MM's or anyones pick at any given time but not to WISH that the stock falls just to say they were right and someone else was wrong. Why would any of us here wish for the worst for our compadres. It's just an analysis of what the chart is presenting and their take on it Dave. The position is still not out of the woods but hopefully it will prove anyone in disagreement wrong for the sake and good of everyone here who bought it.

[Dave]

What I was curious about is what Dave meant. Was he implying that the TA advocates were hoping that they were right and that the stock would fall like they predicted and prove MM wrong on this one just for the sake of being right. I can see us disagreeing with MM's or anyones pick at any given time but not to WISH that the stock falls just to say they were right and someone else was wrong. Why would any of us here wish for the worst for our compadres. It's just an analysis of what the chart is presenting and their take on it Dave. The position is still not out of the woods but hopefully it will prove anyone in disagreement wrong for the sake and good of everyone here who bought it.

Ski,
I just just, in my own twisted way, pointing out that every chart and TA sign can point to a certain move, but somehow the opposite can happen. When I see the volitility of today's markets, I sit back and reflect on the system that has been created by discount online brokers. It has opened the market up to a whole new world of daytraders. All of them rely on the same information, so what is the result? If a chart shows one thing, will the expected result follow? What percentage of the time? Will a result only occur if most of the TA's recognize the existing pattern(s) on the chart? It is really very interesting, and a situation that certainly did not exist 20 years ago. I will watch a stock make 20% moves week in and week out, with NO news at all from the company. Heavy volume, light volume, all over, and fun to watch. It is a great example of a system that only exists because of itself. Deep stuff!

Oh, I wasn't implying that anyone wanted the stock to go down, I was just messing around with the guys. I'm sure they knew that though!

-Dave

[spikefader]

Just looked and the +QCRMN Jan 70 puts are 0.30x0.40 while stock price is $77.51.

If price drops 10% back to SUPPORT on the chart (completely possible) you will likely get a 10 bagger (rough guess and opinions welcome) on each put you buy. So for every 5k invested in QSII, say you bought 1 of those puts for $40, then you could reasonably expect to make $360 on the put. If bearish bias is wrong and she flys, you've only lost 40 bucks of the $750 profit that MM's pick is targeting. But if it does tank 10% you'll take a $250 hit for every 5k invested in it. By hedging, the puts will put the entire position green again, i.e. on a 5k position your stock is worth 4750 plus the 400 on the put and you're position is 5150.

You'll actually make $150 on the entire position despite the stock moving 10% against you.

Then at that stage you may want to take the $400 profit on the put and add it to your stock position at support, when it's clear waters. Your average price drops down, and if you like, you can hedge again with an out of the money cheapo put to protect your larger position again. Makes perfect sense to me.

So what does a person with 25,000 bucks invested in QSII do from here? If it were me I'd likely hedge with 5 of those puts for $200 bucks total. What's that? 0.8% of the capital to protect it from the risk of a 10% drop in value. So say she does drops 10% to 70.00, the stock value drops from 25K to $23750, and the puts grow to $400 each or $2000 profit on the 5. You've made $750 bucks, can reinvest that into the stock, and rehedge it with cheaper puts.

Just for fun, I'll track the puts and stock position, and I'll use a sample port to do it.

It should be noted that if price meanders around and doens't move (ha, unlikely for a MM pick; they're either rockets or crashers) then the put premium shrivels and dies like a ripe banana left in the sun. But at least it's good for insurance till expiry in January and you can sleep like a baby at night, knowing that if your hard earned cash that's in MM's latest pick dies then you'll profit from the death.

Best to ya.

[New-born baby]

Put? PUT?!???

Spike,
After reading your last post that included mathmathics, logic, and sound reasoning, all I can say is:


"Puts? PUTS?!!??? We don't need no stinkin' puts!

Seriously, great reasoning. Thanks!

[Adam]

Thank you MM for the simple explanation of something that was difficult for me to grasp through readings from proir investigations. MM IS HUGE!

[ricofrans]

QSII Dropped

QSII dropped very hard today... support line at 70?

[New-born baby]

Bang!

QSII dropped very hard today... support line at 70?

Rico,
It gave a headfake to $79.00, and now is grovelling in the dust of $73.10 for the low. It has found some (I think, temporary) support at $74, but I am looking for a price target closer to $60 in the short run. The point n figure chart says $69.00. We shall see . . . .

[sisterwin2]

To be truthful, I was not ready to for this pick so I did not climb aboard. Then I looks at the chart and was proud that I agree that I see down side before it will make its 15%.. I thank all here for teaching me what I know ( still too little). I thank MM for making me look closer also.

Good luck on the pick all....

[skiracer]

Big down day in light of a big up day. Not good. I think you'll see $70/69 before you see any bounce up. No channel long signal either on the weekly.
Just took a look at the options an I didn't see any bargains there either.

[mrmarket]

Big down day in light of a big up day. Not good. I think you'll see $70/69 before you see any bounce up. No channel long signal either on the weekly.
Just took a look at the options an I didn't see any bargains there either.

What will happen if QSII beats earnings by 50%?

[skiracer]

Well that will be a horse of another color. You know our disciplines are different. I was just looking at the daily and weekly charts and giving an opinion of where I thought it was going over the short term. I know there are alot of people in it because of your lead an I do want to see it do good regardless of what I see in the chart because of that. I could be way off base on my interpretation which is just my opinion and not meant in any non positive way. BTW when does it report earnings? If it does beat consensus by 50% then all of us who looked at it negatively will have our fingers up our asses when it takes off.

[spikefader]

Just took a look at the options an I didn't see any bargains there either.

Those +QCRMN Jan 70 puts that were asking 0.40 traded +88% today