August 17, 2017

Archives for November 2007

What to Expect Going Forward

Another gap up today, which was closed late in the session. After the gap closed the indices held steady until the last ten minutes of the trading session which was most likely due to some end of the month manuevering by the institutions. Overhead resistance is very strong at the 1490 level on the S&P. My guess is given the overbought levels in the major indices plus a few of the major sectors will lead to a decline early next week, but as we all know nothing is certain. As all of you know I typically deal with the short-term (1-5 days) and given what I stated yesterday I am still expecting to see the market move lower over that timeframe with a possible retest of the 1440 area. I would not be surprised at all to see the market … [Read more...]

Reasons for a short-term reprieve?

The market held steady today to the delight of the bulls. However, there are a few bearish short-term indicators that are presently facing the markets. The indices we follow (as seen below) are nearing an overbought state which often leads to a short-term reprieve. Tomorrow (11/30), according to the Stock Trader's Almanac is historically bearish with the S&P finishing in postive territory only 33.3% of the time. The gap higher in all of the major indices could potentially weigh, at least over the short-term, heavily on the market particularly when combined with the aforementioned. The Russell 2000 (IWM) seems to be struggling with strong overhead resistance at the $77.00 area. Volume on the recent rally showed little … [Read more...]

Rally leads to short-term overbought levels

The market rallied hard today off the recent oversold levels. That might be putting it mildly, as the day closed with the 3rd largest percentage advance in roughly four years. Moreover, it was the first two day rally in over a month. Now the market is once again nearing an overbought state and typically in a bear market (if we are indeed in the early stages of one) overbought levels are quickly sold off. Many of the indices are back at strong levels of overhead resistance which means we could get a short-term reprieve over the short-term. One thing is for certain the market has moved off of the extreme levels that were in place at the close Monday. Now the real battle begins between the bulls and bears. Again, I expect to see a … [Read more...]

Bearish November Leads to Bullish December

Do you believe the Dow Theory? I have to admit all of the recent negativity has me leaning towards the bullish side, at least for the short-term. The short-term indicators I follow, again short-term, are overwhelmingly bullish; however bullish indicators don't amount to much if buyers are not willing to step in. I really don't care too much about the longer-term picture as I am not that type of trader. I try to decipher what the market has laid in front of me and from my seat it looks like a bottoming process is in the making. Of course, I could be completely wrong, believe me it has happened more than once, but I have to go with what has gotten me this far as a trader. If I am wrong I allow my risk management techniques to take over. … [Read more...]

SPX Iron Condor

Please click the following link to access the SPX Iron Condor summary.  SPX Iron Condor Trade for the December 2007 Expiration Cycle  The increase in volatility has not phased the SPX Iron Condor strategy. The strategy made 7.9% over the last four week expiration cycle and 25.1% since we initiated our new guidelines for the strategy. Essentially, the way we trade Iron Condors has changed dramatically since our last loss in August. We allow probability to work for us. Let me explain.  The win ratio for the strategy has been good. The strategy has had 9 out of 12 successful trades for a win ratio of 75%. However, two out the three losses have exceeded 50% which has led to cumulative losses in the strategy over the past twelve months.  … [Read more...]

The Week After Turkey and the Iron Condor

According to the Stock Trader’s Almanac, November 26-29 are seasonally bullish with the S&P finishing higher Monday (66.7%), Tuesday (81.0%), Wednesday (61.9%) and Thursday (71.4%). We shall see soon enough. As you all know, I never base a trade solely on seasonal tendencies. However, I am always aware of the seasonal calendar as an additional tool for potential trade set ups that I am contemplating. I will add the anticipated SPX Iron Condor position for the December cycle over the weekend. I will try and establish the position early next week. So far our new way of trading Iron Condors has worked wonderfully. Again, we will allow probability to work for us. With the VIX so high we should be able to establish another huge range for … [Read more...]

Seasonal Tendencies and Next Week

The positive seasonality that typically occurs around Thanksgiving has yet to rear its head. I reported earlier this week about the bullishness that precedes and follows Turkey day. We still have Friday, but given the shortened trading day on Friday my guess is that gains, if any, would be limited. The day before and after the holiday combined, only experienced 9 losses in 54 years. The market would have to rally sharply Friday if the market has any chance of increasing the overall winning trades that typically surround the holiday.  With the exception of the Nasdaq 100 (QQQQ), all of the major indices we follow are back in an oversold state. Moreover, several of the indices, particularly the Russell 2000 (IWM), are sitting on key … [Read more...]

Expiration Report On Insider’s Page

The November Expiration Report (only available to paid subscribers) is now accessible on the Insider's page. I will be back with a sohrt post intraday tomorrow and after the closing bell. Stay tuned! Overbought/Oversold for November 20, 2007 S&P (SPY) - 37.6 (neutral) Russell 2000 (IWM) - 29.3 (oversold) Dow (DIA) - 35.8 (neutral) Nasdaq 100 (QQQQ) - 38.5 (neutral) We work hard to bring you our latest views, opinions and research on a daily basis. If you are a loyal reader and find our thoughts useful please show us your support by joining our newsletter service. We currently follow 3 stock options strategies in our investment newsletter, the ETF Extremes, SPX Short Iron Condor and SPY Diagonal LEAP. If you want to an … [Read more...]

Turkey Day Rally?

Three out of the four major benchmarks that I follow are back in an oversold state. Moreover, the market has officially moved into a positive seasonal bias over the short-term.   Last week I stated, ...historically the market performs very well the day before and the day after the holiday. The Stock Trader’s Almanac states, “long into weakness prior, exit into strength after”. They go on to state: “for 35 years the combination of the Wednesday before Thanksgiving and the Friday after had a great track record, except for two occasions. Since 1988, Wednesday-Friday lost six of eighteen times with a total Dow point-gain of 502.41 versus a Wednesday-Monday total Dow point-gain of 704.77 with only four losses. The best strategy seems … [Read more...]

Note to Subscribers

I just wanted to let everyone know that the November Expiration report will be out this Tuesday. The SPX IRon Condor will not have a position added next week since the December Expiration Cycle is five weeks and we typically only go out a max of four weeks. Thanks, Andrew … [Read more...]