[BIGINJAPAN]

(02-24-2013 10:12 AM)chyamor Wrote:  

To add to that question, anyone know of a good website that does filtering? I'm looking to filter based on Simple Moving Avg / Exponential Moving Avg and RSI many of the free ones dont let you filter Exp or RSI

I use think as my platform if that matters.

Quants develop algorithms that will exploit those and use them against you. Also indicators are used more to confirm price action. They do not predict moves. MACD, stochastics, RSI are based on PAST movements not future.

If you want to learn how to get in ahead of big moves you have to learn how to analyze the option market. A lot of the time options predict big moves or trends in the market or the individual stocks.

For example this past week it looks like Talisman Energy which has been a huge dog the past couple of years is posed for a takeover. Now those rumors have been around for awhile but nothing has happened. Well now you are starting to see action in the October calls that suggest otherwise. The flow to me is very similar to what happened with Nexxen before it was bought out by China.

Using the option market you can see a large trader bought 4000 shares of the october 13 calls and sold 4000 october 11 puts. Basically he financed his Call buying by selling puts. That is over $500,000 on call buying premium. But the real tell is selling the october 11 puts. You have to have big money in order to be allowed to sell that many puts. You run the risk of being put 400,000 shares if the stock sinks below the $11 mark. Which it has a few times in the last year. Someone might have to cough up $4,000,000 or so in october if this trade goes bad.

But anytime you see more volume than the previous days open interest total you better take notice because institutional traders are positioning themselves. We all know who has insider knowledge and it isn't you or I.

Anyways pay attention over the coming weeks and see if there is a big announcement. I have no position in the trade but this would be a classic tell that the option market is signaling a buyout weeks or months in advance.