NAB Forecast

NAB Forecast
studentofgann.com.au

The 2017 Swing ran down 60 days into point B which is a very similar time period to the current projection . There are two different scenarios that could present as outlined earlier . We could continue to move higher making counter trend Top into the 7th June and if this occurs we could be down till the 16th June where Main Low is indicated which measures 55 days peak to trough which is fairly close to the 60 day time period in 2017 . The second scenario that could present is a Low into the 7th June then up till the 16th June so as we approach the first signal date 7th June we should be able to determine if we are setting up for Top into this date in which case I will look to buy a 3 month put option and hold it down till the 16th May and then reverse position if the 16th comes in as Low .

NAB Forecast posted on the 31st May calling Low for the 16th June . Actual Low came in on the 17th June one day late.
Please see chart below .
studentofgann.com.au

Student of Gann said:

NAB Forecast posted on the 31st May calling Low for the 16th June . Actual Low came in on the 17th June one day late.
Please see chart below .
studentofgann.com.au

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Is that a major low and not another leg down? Could it be a dead cat?

We are running against a 7 year Cycle . Yes it appears to be a short term swing up then main trend down .
Will calculate the dates tomorrow .

NAB Forecast posted on the 31st May calling Low for the 16th June so we were one day off with the market up over 18% in just over a month.

Looks like we could be setting up for Top into the 22nd July so I am going to have a look at a three month Put option atm . The Sept puts seem to have a good amount of open interest but I had a look at the Oct atm puts and the open interest is quite a bit less so will have a more detailed look this evening when I get home . any suggestions on a good three or six month put option , I didnt want to have anything with too short an expiry due to price and time decay so a three month option might suit my parameters as we should be down till mid August . thanks Grant

Student of Gann said:

NAB Forecast posted on the 31st May calling Low for the 16th June so we were one day off with the market up over 18% in just over a month.

Looks like we could be setting up for Top into the 22nd July so I am going to have a look at a three month Put option atm . The Sept puts seem to have a good amount of open interest but I had a look at the Oct atm puts and the open interest is quite a bit less so will have a more detailed look this evening when I get home . any suggestions on a good three or six month put option , I didnt want to have anything with too short an expiry due to price and time decay so a three month option might suit my parameters as we should be down till mid August . thanks Grant

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IMHO open interest doesn't matter that much, at least on the ASX, because the orders shown when the market is open are predominantly MMs. the more important metrics are how good of a fill you can get, which you won't know until you start working the spread when the market is open, and whether the IVs on offer represent fair value, which of course is extremely subjective and depends on the individual trader's view at the time.

even the width of the spread doesn't really matter, they can show me a 0.80/1.20 spread for all i care, if they fill me at 1.00 and the IV at 1.00 is acceptable to me. don't get put off by stupidly wide spreads, you'll find often they'll fill you at or near the mid anyway (at least for front month near the money, for the 3 month OTM you might have to cross a few ticks their side).

i haven't noticed much, if any, correlation between the open interest and the fills i get. i have traded contracts before where i was the only open interest (ie. the open interest was zero at the time i placed my order) and gotten filled at the mid. and on the contrary, just yesterday i tried to sell BHP aug monthly 35.67 puts, as there seems to be a bit of support there in my view. that has 5000+ open interest, and i didn't get filled even when i dropped to 1.10 into a 1.06/1.20 spread, so i took the order off.

Thanks that's very helpful. I have experienced the wide spreads as well and have tried to place bids just above the mid point and have had to go over the midpoint quite a few times to get filled. My issue is I start work at 10.30am so I only have a very narrow window to examine the spread and if I am lucky place an order before that time as it usually takes around 20 mins for the bidders and sellers to setup and by that time once the spread is in place I won't have time to watch it until between 2.30 to market close which is my second time window so hopefully during that time period the spread is established and there is a reasonable opportunity to get filled even if I move a little over the midpoint. Just wondering if there is a broker in Aus who could manage my position while I am work . I just need someone to assist me with placing an order as I should have an estimate of the low price for the underlying and they could buy on my instructions either an ATM call or put on a specific date for three or six months without a huge turn around fee . If I had time during the day I could do this process myself but due to time constraints watching the market for that perfect spread opportunity to present itself is difficult as I will only have the 2.30 time window to place a trade. Also will need to set a time based stop under a certain date and a predefined level for the underlying management Ng this position will also be difficult in the early stages of trade entry as if it drops or gaps down below my stop during work hours I won't be able to close the trade till 2.30 so I need somebody or automated process ? To manage my stop , not sure if Westpac securities have this function like a pre programmed auto stop out level which is why I am leaning towards a broker to carry out these instructions which will give me peace of mind even if it costs a little extra as long as they don't eat into my profits too much any ideas appreciated

Student of Gann said:

Thanks that's very helpful. I have experienced the wide spreads as well and have tried to place bids just above the mid point and have had to go over the midpoint quite a few times to get filled. My issue is I start work at 10.30am so I only have a very narrow window to examine the spread and if I am lucky place an order before that time as it usually takes around 20 mins for the bidders and sellers to setup and by that time once the spread is in place I won't have time to watch it until between 2.30 to market close which is my second time window so hopefully during that time period the spread is established and there is a reasonable opportunity to get filled even if I move a little over the midpoint. Just wondering if there is a broker in Aus who could manage my position while I am work . I just need someone to assist me with placing an order as I should have an estimate of the low price for the underlying and they could buy on my instructions either an ATM call or put on a specific date for three or six months without a huge turn around fee . If I had time during the day I could do this process myself but due to time constraints watching the market for that perfect spread opportunity to present itself is difficult as I will only have the 2.30 time window to place a trade. Also will need to set a time based stop under a certain date and a predefined level for the underlying management Ng this position will also be difficult in the early stages of trade entry as if it drops or gaps down below my stop during work hours I won't be able to close the trade till 2.30 so I need somebody or automated process ? To manage my stop , not sure if Westpac securities have this function like a pre programmed auto stop out level which is why I am leaning towards a broker to carry out these instructions which will give me peace of mind even if it costs a little extra as long as they don't eat into my profits too much any ideas appreciated

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holy smokes that's a wall of text, was that posted from your phone? anyway no worries, all good. i have not come across such a service as i run all my trades directly, but given how much of a ripoff even execution only already is at CHESS brokers for options trades, anything including a discretionary component is surely going to cost a bucketload.

i have noticed that i tend to get better fills nearer to the close, this is not a hard and fast rule, but if you have to choose one or the other i would probably take a quick glance at the market in the morning just for a bit of an indicative guide, then look to actually place the trades in the final hour of the session.

yes management of open positions can be a bit tricky when combined with a full time job, that's why i prefer mainly sticking to selling covered calls and cash covered puts, even though i'm fully WFH and can check the market whenever i like. those strategies generally don't need too much management once they're active, though they are not set-and-forget by any means, most of the time i can just let them run to expiry and pocket the premium.

My main concern is finding someone who can monitor or implement a stop loss strategy for an options trade whilst I am at work . As an example . If a low is indicated for a particular date there could be a two day window when I am expecting that point to hit and will usually have a rough idea as to a price point to expect. So if I am looking at NAB as an example I may expect the 30.10 level to remain intact but it could move marginally higher so we will have to allow a bit of leeway so bas d upon this I may look to buy a three month ATM put but due to time limitations as outlined in the above post it may be problematic to enter a trade before 10.30 as the spread may not be established by then which was my first small time window to enter the position so from that point I am blind till 2.30 - 4.00 so I have that 1.5 hour period during the afternoon to work something out and by that time the price may have moved down considerably forcing me to pay a premium on the position so if I had a broker I could issue him a set of instructions including a rough projection as to where I expect the low point on the underlying to occur which would probably occur whilst I am at work so even if we don't get a fill around the top or bottom it is acceptable . And as the spreads can change throughout the course of the day a broker may be able to set an alert on a particular put option when a buyer or seller comes in and around or above the midpoint which will trigger an alarm and he can then go ahead and execute the position as it could take hours of sitting around waiting for that buyer to step up to an acceptable level and I don't have time to work the spread during the day and then there is the issue of only getting a partial fill so the position will be incomplete and then I will have to wait for the following day to complete the position and by that time we could have moved lower increasing the price so I am effectively locked out of the trade with only half the position filled so I would prefer to have a broker working the spread for me but not sure how much this service would cost on an options account around 10k . And if I issue him with specific instructions re a stop can he automatically set those parameters into his computer and if the underlying trades above say the 22nd June 30.50 level I will need to be stopped out so will need someone at that point to work the spread and sell my position but that is obviously determinant upon the spread at that time and whether he can achieve the fill at the midpoint or higher so it is a relatively subjective call on the brokers behalf but he would be closest to the screen at that point to facilitate a stop out .

Thanks for your help I have a few dates coming up for NAB so your assistance would be appreciated . Can I please email you.

Student of Gann said:

Thanks for your help I have a few dates coming up for NAB so your assistance would be appreciated . Can I please email you.

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sorry, not really in a position to get involved to that sort of detail. always happy to bounce around general ideas on these forums and offer a point of view based on my experiences trading options, but what you've mentioned sounds on the borderline of professional financial services, if not crossing over it entirely, and i don't have a licence for that.

also just because i can watch the market all the time, doesn't mean i do. as i've mentioned elsewhere (eg. in discussions with Gunnerguy over in the derivatives section) i'm trying to watch the market less and less these days. the vast majority of my capital is in index ETFs and long term buy & hold which i simply leave sitting there to grow on their own. i just flip open the market every now and then to have a bit of a dabble in options, hence my heavy use of lower maintenance strategies like covered calls and cash covered puts.