May 30, 2017

Archives for October 2011

Is it Over?

The market continues to amaze. The rally has been furious and fast. In less than four weeks, the Dow has risen 14.8 percent from its 2011 low, reached on Oct. 3. The S&P has gained 17 percent. The rally has been historic. If tomorrow holds 3% on the S&P, the major market benchmark will set the performance record for a one-month time frame. While I mentioned that the market was short-term oversold towards the beginning of the month I never thought the market would rally this far, this fast. The S&P pushed through 1200, then 1220, followed by 1250 and now it sits at 1285. Amazing! But, now we are at a very important area of strong overhead resistance at 1300. My guess is that we will take a breather for the next 5-10 days … [Read more...]

Another Great Week for the Bulls – Position-Sizing is the Most Important Aspect of Trading

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More Downside To Come?

Today was a banner day for the High-Probability, Mean-Reversion Options Strategy. The IWM puts that I purchased near the close yesterday closed the day up 27.9% and if we continue to move to the downside tomorrow, which looks highly likely we could see even greater gains. My thought is that we will close the gap in IWM, DIA and SPY that occurred last Friday. This would take the major market ETFs to $69.73, $115.77 and $122.10, respectively. If we happen to close the aforementioned gaps then the next move could take the major market benchmarks down to close the gap from 10/10. A move like this over the next few weeks would lead to extraordinary gains in the strategy. A move to close the gap from last Friday could lead to us to a … [Read more...]

Major Benchmarks in a Short-Term Overbought State

I am keeping it very short tonight as I am just not feeling up to snuff. My effort to eliminate caffeine from my daily regimen is taking its toll tonight, but hopefully this pounding headache is short-lived. Anyway.... The market has pushed into another short-term overbought state and as a result I placed a trade in the High-Probability, Mean-Reversion strategy. I still have two prior trades on, so this is the third open trade in the strategy. My hope is that the market takes a reprieve from the short-term overbought state over the next week so I can close all three positions. I will you with this tasty nugget from Sentimentrader.com's own Jason Goepfert:  "We mentioned last week that the Monday after October option expiration … [Read more...]

October Options Expiration Can’t Come Soon Enough

As traders we all have "those" months. Yes, the months that try every traders max pain threshold. October has been one of "those" months for most traders. The "rip your face off" rally that came on 10/4 and off a new low in most of the major benchmarks, especially the small-cap stocks (IWM). The 14+ percent gains followed by one of the most volatile weeks (this expiration week) has been difficult to read for most traders. However, the Theta Driver Options Strategy has performed with flying colors amid all of this volatility with my short strike (SPY Oct 128) well above the current price with only one day left until expiration. Typically, I would have rolled or taken off the position before the week of expiration with the latest being the … [Read more...]

Options Indicator Signals Tech Overbought

Here's the list of the ETFs that make up the High-Probability, Mean-Reversion Options Indicator. Hopefully (time permitting), I will be back with another post later this evening. Stay tuned! If you haven’t already, don’t forget to sign-up for my : High-Probability, Mean-Reversion Options Strategy : Free 30-day trial Theta Driver Options Strategy (limited room available): Free 30-day trial Also, for those of you who live on Facebook. You can access my info there as well. Just click on LIKE. … [Read more...]

Short-Term Reprieve Occurs – Will It Continue?

The short-term reprieve that I mentioned in the Free Weekend Report (Sign-Up Free Here) occurred today and by the looks of it we could see more downside tomorrow. As I mentioned in the report "as for the current technical picture, the all of the major indices and most sectors are in a short-term "very overbought" state as we head into the week of options expiration. Not only are the major benchmarks in one of the most short-term overbought states that we have seen in quite some time, but we are now hitting strong overhead resistance with two unclosed gaps directly underneath. Combine all of the aforementioned and you can quickly see why the risk/reward scenario leans heavily towards a short-term reprieve next week." Now all of our … [Read more...]

High-Probability, Mean-Reversion Options Strategy

I hope all of you with a bearish lean are surviving this absolutely crazy market. I know that it has been the most difficult month for the High-Probability, Mean-Reversion Options Strategy in since its inception. The ongoing nine day rally has pushed both of our positions in losing territory, yet I am still confident that the performance will improve as we move towards the latter part of the month. No one said trading was easy, especially options trading, but it is all about perseverance . As for the Theta Driver Options Strategy we are well on our way to the third straight month of gains. All of the major indices have moved into short-term "very overbought" extremes, while hitting strong overhead resistance. Moreover, we have two large … [Read more...]

Options Offer Tremendous Opportunities

I am always amazed how large the opportunity to "make it big" factors into the great magnetism of the market. The belief that anyone, from any background can be successful and make tons of money has quite the allure. But, in all of this euphoria people neglect to think about all of those that failed before them. And believe me the failure rate is high. Yet, investors/traders continue to choose the most difficult of investments to trade - stocks. Stock-only traders are at a complete disadvantage because they have no way to trade the randomness of the market. They have a 50/50 chance of success for each and every trade. Bottom line - stock investors/traders are truly at a disadvantage. Again, stock investors only have two ways to make a … [Read more...]

High-Probability, Mean-Reversion Indicator – Short-Term Reprieve Looks Imminent

It was another day of sideways trading. The market was able to hold gains for yet another day which was impressive given the short-term overbought extremes, strong overhead resistance and yesterday's huge upside gap. I am still leaning towards a close of the upside from yesterday which would bring SPY down to $117.25, DIA down to $112.21 and QQQ down to $54.66. I would expect that this occurs over the next 2-3 days, but Mr. Market always has a way of playing games with what should be obvious price levels. I found an interesting nugget from Jason Goepfert of Sentimentrader.com today. "According to Bloomberg , at least 500 more stocks last traded on an uptick than a downtick on each session during the past week.  The 5-day average of … [Read more...]