May 30, 2017

Archives for May 2011

Market Nearing Short-Term Overbought Extremes

IT's late so I am keeping it short tonight. The market pushed higher today and is now nearing a short-term overbought state. China, Gold Miners and Real Estate have all moved into short-term overbought extremes so I would expect to see a short-term reprieve in those three ETFs over the next 1-3 trading days. All three ETFs have RSI (2) readings that exceed 97.5 so the probability of a short-term reprieve is high. Tomorrow morning brings the ADP report so I we could see a very good opportunity to enter a position. If the market gaps higher, preferably one on the ETFs I mentioned then I would expect to see a trade in the strategy tomorrow. With that being said, subscribers stay on the lookout for an email, tweet , etc. … [Read more...]

High-Probability, Mean Reversion Options Portfolio Up Another 7.2% in May

High-Probability, Mean-Reversion Options Strategy Update We only have a few trading days left in the month of May. The High-Probability, Mean-Reversion Options Strategy is up 7.2% for the month while the S&P 500 (NYSE: SPY) is down $0.64 or -0.48% in May. The month follows a stellar 10.5% gain in April. So far, the strategy is up a respectable 40.2%  since its inception back in November. What I like the most is that the returns are based on only 13 options trades. When compared to other options strategies on Collective2, the High-Probability, Mean-Reversion strategy outperforms on every measure and we are only in the market an average of roughly 8 days a week with an average of 2 trades a month. You can see all of the … [Read more...]

Options Strategy Advances – Up 40.2% Since Inception

Yesterday, I mentioned the potential for a trade in one of the major benchmark ETFs. The trade became a reality this morning after I took a position in the Nasdaq 100 (QQQ) shortly after the opening bell. You can see all of the trades and how the strategy has performed here. I was able to buy QQQ Sep11 56 calls for $2.71 and sold the calls almost near the high of the day at $2.88. Not the biggest return by any means, but it did amount to a respectable 6.3 percent return on the trade. It was enough to push the overall return of the strategy 3 percent to 40.2 percent. The win ratio is an astounding 93.3 percent (hard to believe I know) and the Sharpe ratio is 1.63. I would imagine that once the statistics are updated on my third-party … [Read more...]

Options Trade Imminent

An options trade is imminent. The High-Probability, Mean-Reversion strategy is showing short-term extremes in all of the major benchmarks and the RSI (2) is confirming with my proprietary indicators. With that being said, I would expect to see a trade in one or more of the major market ETFs tomorrow. I have been getting a lot of requests to follow other ETFs in the strategy. While I would absolutely love to increase the number of ETFs on the list, the liquidity in the ETFs requested do not meet my requirements. If the options liquidity is too low, the bid/ask spread in the underlying ETF is too wide. For example, if we have an option that displays a bid/ask spread of $2.00 - $2.50 then the market maker is essentially buying an … [Read more...]

Major Market Benchmarks Reach Short-Term Oversold Reading

Keeping it short tonight. I am overtired and in need of some sleep. The S&P gapped lower at the open this morning and proceeded to trade in a sideways fashion for the remainder of the trading day. We are moving ever closer to closing the gap from 4/20. The S&P 500 (SPY) moved to a low of around $131.60 which is roughly $0.25 away from officially closing the gap. I would not be surprised to see the gap close tomorrow followed by a sharp push higher. However, I do think that the next push higher will eventually fail and push the S&P (SPX) below major support at the 1250 area. Pure speculation of course. Short-term moves are my cup of tea. If the market happens to move lower tomorrow at the open, I would suspect that a … [Read more...]

Short-Term, High Probability Mean-Reversion Indicator – Range Bound Trading Persists

As I have stated over the past few days, a short-term bounce would occur and today the bounce came to fruition. Nothing too exciting, and if you have been reading my commentary over the past few days you know that I think we are still due for a sharp pullback that, in my opinion will occur after the May expiration cycle comes to a close. I would be ecstatic to see this market push even higher and into a short-term overbought over the next few days. A short-term extreme in any of the ETFs I follow in the HPMR strategy would be wonderful for me and for my subscribers. We have all been waiting patiently on the sidelines for several weeks looking for the right opportunity to enter a trade. But, as I always say patience pays. There are … [Read more...]

S&P Moves Ever Closer to Closing 4/20 Gap and “The Option Strategy”

The S&P 500 (SPY) pushed lower today to come ever closer to closing the gap from 4/20. SPY moved fell to a low of $132.12 before bouncing to close the day over $1 higher at $133.17. It would take a move to $131.35 for the gap to officially close. My stance is that we shall see a series of gaps close this summer beginning with the 4/20 gap, followed by the 12/1/10 gap at $118.01 with the potential of a close of the 9/1/10 gap at $104.41 the bears truly take control. I do not expect the latter gap to close this summer, but it would not surprise me to see the gap close over the next 12 months. For me, it truly doesn't matter. I enjoy speculating (like everyone else) where the market is going to go, but no one really knows. I do not … [Read more...]

Short-Term, High-Probability Mean-Reversion Indicator – South Korea (EWY) and India (EPI) Hit Short-Term Extreme

The market continues to trade in a range bound fashion. The S&P 500 (SPY) pushed back down to strong support at the $133.00 level - a level that was created by the 4/20 gap. My guess is that we close the gap over the next 5-7 trading days. With so many ETFs in an oversold state it would not surpise me to see a short-term bounce followed by the plunge that takes the S&P 500 (SPY) down to the $131.35 level to close the gap from 4/20. In an ideal world it would happen immediately following options expiration as the day following options expiration is historically bearish. As for the High-Probability, Mean-Reversion strategy there are two ETFs that have moved onto my radar - South Korea (EWY) and India (EPI). Both have hit a … [Read more...]

Patience, Patience, Patience

First, I would like to thank all of you for your well wishes. Macey is feeling better than ever. Good enough that we can journey down to Boston to check out the Museum of Science and a few other notable sights. As for the market and the strategy, there has not been any true extremes this week. I would expect to see the 4/20 gap close next week which would definitely move a few of the ETFs I follow into a short-term extreme state.This is when patience is a virtue. Don't trade just to trade. Stick to the guidelines. Don't push it. Let probability work for you. Yadda yadda. Anyway, I hope all of you have a wonderful weekend and I look forward to bringing you the High-Probability expiration Report next week and hopefully a few … [Read more...]

Today’s Post

I just wanted to let all of you know that there will be no post tonight. My daughter is sick for the second time in a little over a week so I haven't any time to focus on the numbers. I hope to be back tomorrow with the updated numbers. Kindest, Andy … [Read more...]