June 23, 2017

Archives for June 2010

Will Holiday and Short-term Oversold Tendencies Prevail?

I purchased a few QQQQ and IWM calls today. Here are the trades: The gap lower this morning pushed the Nasdaq 100 (QQQQ) into a short-term oversold extreme. As I write this the RSI (2) for QQQQ has pushed to 0.12 which probability screams that a bounce is near. Combine the aforementioned with an unclosed gap and positive seasonal tendencies and you can see how Mr. Probability could side with the bulls over the short-term (1-5 days). The trading days surrounding July 4th are historically bullish. The two trading days before and the trading days after are all bullish with three of the five days having a % of time positive in the 70% range. Of course, I typically never trade based on which way the seasonal winds are blowing. However, … [Read more...]

Another Wonderful Week for My Options Portfolio

I kind of despise using a title that sounds a bit braggart, but I am very proud of my accomplishments since My Options Portfolio was initiated back on May 8th. I always have to keep in mind that this is a marathon and not a sprint and so I need to trade accordingly. While it is nice to see the short-term gains my goal is to keep this going for a lifetime. I think my transparency speaks volumes as to my intentions. Words are one thing, but  the performance of real-life trading is another.I am not a marketing machine, I am a trader. I trade for a living and I have no problem revealing my trades to others. I love my job and hope that others will join me on my life-long journey in trading various options strategies … [Read more...]

Major indices back in short-term oversold territory.

Oversold IWM - 1.4 QQQQ - 2.2 DIA - 3.5 SPY 1.5 The aforementioned are the current oversold levels of the major indices I follow. As you can see we have hit extreme levels, so I expect to see a short-term bounce over the next 1-2 days. I am currently playing IWM ( as seen in the prior post from earlier today) to take advantage of the high-probability set-up so we will soon see if Mr. Probability works in my favor. Each time IWM has hit levels this low (9/2/09, 5/7/10) we have witnessed a decent bounce in the Russell. My Options Portfolio is currently up 30% since it was initiated back on 5/8/10 and I hope to continue the gains going forward. With a steady and disciplined approach I feel I can continue the gains, maybe not … [Read more...]

New IWM Position – Old Trades Posted

First I want to post the trades from Tuesday from my Thinkorswim account. Even with the two losses, the two trades in IWM made up for both losing trades and My Options Portfolio is now up 30.0% or $8,282.50. To check the results click here. As always I will also post the trades directly from my Thinkorswim account at the end of the month. You can also see them in the options portfolio section of the blog. Transparency is of the utmost importance. At the beginning of the trading day, with IWM down again, my short-term technical studies are telling me that there is a high-probability of a short-term bounce in most of the major indices. Due to the aforementioned I have decided to enter into the following trade: I will be back … [Read more...]

Out of My Positions

At the end of the day I decided to exit all of my IWM, QQQQ, and SPY puts. I came out ahead on the overall trade, but I did take a couple on the chin. After the trading day was over I had to quickly race down to beautiful Lake Champlain to sail with friends. What an amazing day! I am up for the month of June, but not nearly as much as I was in May. Hopefully, I can make up for it over the next week or so. One thing is certain, I will not force anything (never do). I just want to take advantage of the high-probability trades as they come to fruition. Probabilities are all we have as traders. I will actually be out all day tomorrow, but hopefully I can post the trades from today. If not, I will definitely have them on the website … [Read more...]

Reminder to Self – All It Takes Is One

I came across a great article on the one bad trade syndrome. Recently, Slopers (Tim Knight's Band of Followers), were privy to a real-life blow-up in which a trader essentially risked all of his trading capital on essentially one trade(disregarded the importance of position-sizing). I want to make sure that I never make the same mistake. Currently, my positions are teetering on max pain (stop-loss). My outlook remains with the pullback scenario that I have mentioned repeatedly the past few weeks - short-term bearish. For those of you who have not been reading my posts the past several weeks, I have been reminding my loyal readers of the following: For several weeks I have warned of the following: June is also a Triple Witching month. … [Read more...]

Tires Stuck in the Mud. Bearish Looking Forward?

The market basically finished flat today. Vacillation was limited as the bulls and bears played tug-of-war all day. With that being said, I am still short-term bearish (seem to be the only one right now) due to the short-term overbought nature of the Russell 2000 (IWM) and several other ETFs I follow. I mean come, IWM has moved roughly 10% in the last seven trading days. Moreover, there is an unclosed gap in IWM at the $65.03 (from 6/14). Couple the aforementioned with upcoming seasonal bearishness and yes, I think we could see another move to the 1090-1080 level. Again, the seasonal picture looks incredibly weak as we move into the latter part of June. Keep in mind, the market is currently overbought and extremely overbought in the … [Read more...]

Sharp Advance Into Short-term Overbought Leads to Another IWM Trade

I did something at the close that I rarely do, I scaled down my positions. I added some more IWM puts to the mix. Scaling down can be a valid strategy, but only when it is practiced with inviolable discipline - which, unfortunately, most traders do not possess. After years of trading and knowing the consequences of scaling down I know I have the discipline to know when to call it quits on a position. Currently, the major market indices are in a short-term overbought state - all of the RSI (2), (3) and (5). The RSI (2) has pushed into a 'very overbought state. The last IWM hit that level was 4/23. Moreover, the S&P (/ES) has pushed up against strong overhead resistance (1105-1110 area) while the Russell 2000 (IWM) left a gap unclosed … [Read more...]

Excited for the Week Ahead

For several weeks I have warned of the following: June is also a Triple Witching month. Four times a year stock options, index options and index futures all expire at the same time. The performance of the overall market immediately following June’s Triple Witching has been absolutely horrible in years past. The week after has seen the Dow down 15 out of the last 17 years. Watch to see if the market is overbought going into the week following Triple Witching. If so, this could have the potential for a decent short-term fade to the downside. Seasonality alone is (in almost every case) not a reason place a trade. However, when compared with the current state of the market at the time the seasonal tendency arrives, the probability of a … [Read more...]

Out of IWM, FXE and QQQQ Calls – Back in QQQQ Puts

Okay, I finally exited my NASDAQ 100 (QQQQ), S&P 500 (SPY) and Euro (FXE) trades this morning. Here are the trades from my ThinkorSwim account: As you can see I also just opened a QQQQ Jul10 46 put position. I was profitable on two out of the three trades. I exited the QQQQ trade for a 5.3% loss, but I was up 7.1% in IWM and 17.9% in FXE, so I came out ahead. The short-term indicators I follow had moved into an overbought state while pushing up against some decent overhead resistance so I thought it was best to take a few profits off the table. I would like to see a quick drop and then another surge up to the 1105 area. If the market can push up to 1105 and into a short-term overbought state simultaneously I think the … [Read more...]