July 21, 2017

Archives for October 2008

Patience Pays

We were greeted to our first snowfall this morning which has made the day quite beautiful. Autumn colors mixed with a dusting of winter goodness cures all ills, well, maybe most. Anyway, volatility once again picked up today with the VIX touching a high of 81.45 today before backing off to close at 69.65. I am watching QQQQ closely right now for a move back to $29.25. This could potentially be a decent area for a potential trade and one that I will be monitoring closely over the next few sessions. If the ETF tests the recent low while pushing back into an extreme short-term oversold state I would imagine a signal will occur in the ETF Extremes strategy. Jason Goepfert of sentimentrader.com stated the following today: So I'm … [Read more...]

Expiration Report and the New Strategy

Okay, I am back. Things have been quite hectic here lately. I am making a few changes to the site (mostly the Insiders Page). I started today with a post on the new strategy, Ultra Extremes. Paid subscribers please check the Insiders Page for full details. Anyway, the market moved sharply lower again today as worries over third-quarter earnings continue to linger.  Some on Wall Street are a bit spooked. No one knows just how long or deep this economic downturn will last. However, the one item that seemed to bring the market down to its current levels, the credit market, has eased over the past few sessions. The recent move lower is certainly a positive for the market going forward and is step one in bringing some buying confidence and … [Read more...]

Important Announcement

Subscribers check your emails for the Expiration Report and paid subscribers check the Insiders Page of the website for the first of several posts on my new strategy. I will be back this afternoon with the overbought/oversold readings. Stay tuned! Andy … [Read more...]

Working on the website

I will be making a few changes to the site over the next few days, so apologize for any inconvenience this may cause. … [Read more...]

Possible Entry?

The Nasdaq 100 (QQQQ) touched the lower fibonacci level today and pushed into a short-term oversold state. I posted the fib levels for the tech-heavy index (QQQQ Fib Chart) yesterday. I am still waiting patiently for a signal to trigger. I typically get a bit frustrated at this point because of the lack of signals, but then I have to remember the risk-reward scenario of a trade in this environment and more importantly, how the strategies have substantially outperformed the overall market by just sitting on the sidelines. “Without patience traders get pulled into an endless cycle of over trading, sub par entry points and losing trades. Most traders get drawn into trades that do not fit their trading style because they are just plain … [Read more...]

Another Lesson on Position-Sizing Plus a Few Extra Strategy Tidbits

The Dow experienced its second-largest point decline ever. The plunge today occurred just two days after one of the sharpest advances in history. Understandably so, the VIX closed at its second-highest level ever at 69.25. The fact that the market is factoring in moves this large means that risk management is more important than ever. Position-sizing an important aspect that is often overlooked when seeking proper risk management particularly when trading options. Here is the chart that I am watching right now. I am looking for the low fib level (the recent low) as an area to fade, particularly if the underlying is in a 'very oversold' state which it most certainly will be. Of course there are no certainties in trading so I will be … [Read more...]

A few quick charts

The gap from 10/3 closed today (read Monday's post) and as I stated yesterday, $36.10 should prove to be an area of strong overhead resistance. Look at the chart of QQQQ below. The underlying ETF (QQQQ) moved to just above $36.15 before falling apart. MY guess is that we will see a choppy market for the next few weeks with a possible retest of the recent lows. The SPY chart below is the fibonacci retracement levels that I am focused on. During the day we saw a test and fail of the 38.2% area. I will be watching this area closely tomorrow to see how the major market benchmark reacts. Overbought-Oversold levels for October 13, 2008 ETF Extremes Options Trading Strategy * S&P 500 (SPY) - 46.7 (neutral) * Dow Jones … [Read more...]

The Gap Should Close

The gap from 10/3 could easily close tomorrow especially if the futures are able to hold the current levels. As I write this the Dow futures are up over 160 and the Nasdaq up over 25. The move to $36.10 tomorrow (as seen in chart) in QQQQ would mark the close the gap and should act as a decent area of overhead resistance. My shortest-term overbought/oversold indicators have cycled back up to an overbought state and certainly a move to test the lows from 10/3 would push the underlying benchmarks in an short-term extreme overbought state. Subscribers do not forget about the two new strategies that I will be introducing in the Expiration report this weekend. My intention is to talk briefly about them this week in the Insiders page … [Read more...]

Post

The weekly newsletter has been sent out so check your inbox. As for today's post I will have one either later tonight or early tomorrow morning (before the opening bell). I am interested to see the overbought/oversold readings. Also, we could be nearing a short-term pullback in the next day or so. Stay tuned! -A … [Read more...]

Just a Quickie

It was another wild day for Mr. Market. The VIX (investor's gear gauge) spiked to over 76. The trading range for the Dow was over 1000 (the largest in history). Par for the course this week. It was a week of firsts. How could it not be? Ten trading days ago the Dow was above 11,000. Three days ago - 10,000. Yesterday - 8,579. Today it dipped below 8,000 before rallying back to close at 8451. We are in historically oversold markets. All of the ratios I follow (put/call, etc.) are at historical extremes. Something has to give and when we see the market coiled up like it is currently you can bet the rally, when it does occur, will be sharp and violent. Short covering will begin to kick in which will exacerbate the move. Hopefully I can … [Read more...]