Following the Plan

Well Traders, I am back from a nice Thanksgiving vacation in Los Angeles with my family. Besides enjoying some time with my loved ones, the highlight of my trip was watching my Alma Mater, USC, beat the snot out of Notre Dame...again. If the Trojans get past pesky UCLA this Saturday, they will be playing their 5th consecutive BCS game, their third in a row in the BCS Championship game, and the fourth consecutive game which could decide the National Championship. Should that happen, I'll be an extremely happy camper.

Back to business.

Yesterday, the $NDX (and the other indexes) took a huge, and expected hit. As I mentioned last week, the $NDX was very overbought, and trading at the upper resistance part of its Ascending Channel. So, I anticipated a pullback, which occured. This was obviously extremely beneficial to my Iron Condor as it put my trade over $75 points away from my strike with about 3 weeks left in my trade. Today, we had a modest hike of $5+ points, which is fine. The $NDX has established a new resistance level at $1824, but right now, it looks to be bouncing off support at the lower Ascending Channel support, as well as the $1760 area known as "Helm's Deep." I anticipate maybe one more down day, and then another rise within the channel thereafter. The only question is how far a drop, and how high and how fast the rise? Hopefully, I'd like another drop to around $1750, and a very slow rise the next 3 weeks to make the play a success. We'll have to wait and see.

Happy Trading!