So I got an email last night from Morningstar (since we get their research from time to time) saying that they thought the best strategy for options traders is selling options. Honestly this blew my mind to hear such a huge company say this. Here is what the email said: What strategies make the most ...…
Thanks to the heads up of one of our readers, we noticed that conglomerates are now up over 80% for the last year. Amazing how they have recovered since the bottom. I’d be hard pressed to see this trend continue however, so if you own any of these – get out with great profits now.…
Taking a look at the FXI last night I noticed that our broken trendline from mid-January is about to come back into play. What typically happens in these situations is that the security with break the trendline and then move back up underneath it in what’s called a retracement. There is still more room to ...…
Could a double top be forming on the XLK SPDR Amex Technology ETF. Unless we break higher here soon, yes we could see a classic double top chart pattern in the works.…
The biggest drawback to put/call ratios is the fact that you cannot tell if the options involved were bought or sold to open. Since call buyers and call sellers (writers) have entirely different expectations for the underlying shares, this distinction can be very important in accurately assessing investor sentiment. As a way to combat this ...…
Futures are as we expected fairly flat this morning ahead of the release of ADP’s estimate of private-sector employment. Most economists polled by MarketWatch expect the ADP report to show that 40,000 jobs were created in March. Whether that happens or not, the big thing will be if the market likes the number or not. ...…
Everyone who likes trading gold loves the GLD gold ETF. We have not looked at this recently but its caught our eye. Notice the tight range it’s forming (almost like a pennant pattern). Typically these patterns are followed by a breakout higher.…
Yesterday and everyday we post support and resistance targets for the SPX on the intra-day chart. Here is what we posted yesterday. And here is where the market’s landed after a mid-day rally….right at our target. Don’t you think you should start using these to trade – or at least know about them. Again, we ...…
Index levels are going to be relatively flat this week folks – don’t fight it. The market is in the process of waiting to digest one big economic release at the end of the week, the Employment Situation Report. But the release falls on a market holiday, Good Friday, and that could make Thursday’s trading more ...…
The recent chart of the VIX looks very familiar – oh yeah this consolidation pattern happened twice in recent history, and right before a huge jump in the VIX. Remember that any reading below 20 is a clear signal that traders and investors are overly optimistic and do not factor in much risk.…
Greece has a new plan. Add debt to old debt in hopes they can pay both off. Earlier this morning government officials appointed five banks to handle a new seven-year bond issue. As most of you SHOULD know this comes on the plans from other euro-zone countries to help them out should they not be ...…
Most of the major world markets rose on EURO strength in the wake of the announcement of a eurozone aid plan for Greece. The 16-country common currency has been the main beneficiary of the deal announced at an EU summit last week, with stocks gains more modest and Greek borrowing rates slow to show a rapid improvement. For ...…
It’s always important to look at option open interest configuration. For April options on the SPY you can see that there are a lot more Puts being bought than calls. In addition, the overlay of both Puts and Calls suggests that the market will likely close right around $115 as of now. You have to ...…
We saw two very different markets yesterday traders. The trading was very good for the first half of the session, but things really fell apart in the afternoon. The markets started with a gap up open, but basically went sideways for about an hour and a half. They broke out around 11:00, rose quickly, and then moved ...…
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