April 28, 2017

Credit Spread Strategy Update – Market Remains Range-Bound

Quick Options Strategy Review I just wanted to remind everyone that I placed my first trade in the New Credit Spread Options Strategy, or should I say Crowder's Credit Spreads. You can check the official trade in the link below. As it stands the credit spread is worth approximately $.48 per contract. I was able to purchase the credit spread in IWM for $.34 so the trade is currently down $.14 per contract. Certainly nothing to worry about at the moment, as the underlying IWM is still 5.1% away from the short strike at 86. Of course, if IWM continues to move sharply higher over the next few days then I might have to take a closer look at potential adjustments. The window dressing advance that typically occurs during the end of each … [Read more...]

10 Year Fibonacci Retracement Levels on the NASDAQ 100 (QQQQ)

I am going to do things a bit different over the next few days. I want to show the Fibonacci Retracement levels for the benchmark ETFs I follow in the ETF Extremes options strategy. We can reference these levels as we go along and when certain important levels are hit, especially when they coincide with an overbought or oversold levels. I will also be presenting more Fib charts going forward with different time frames, but I will keep it confined to the ETFs I follow for the strategies so please do not ask for additional fib charts. By the way have you checked the performance of the ETF Extremes strategy lately. It is up 147% since its inception over 30 months ago. Bear market, bull market, neutral, the ETF Extremes doesn't care. 10 … [Read more...]

Mr. Probability

Once again Mr. Probability was on our side. As expected the market took a bit of a breather today. The market gapped up today and then traded in a tight, sideways manner before investors locked in gains at record highs and consequently pushed the market lower. The gap up on 10/4 came close to filling today, but the S&P (SPY) managed to hold off the late day decline and bounce higher into the close. I am still on the sidelines (at least in my short-term trading) looking for a good risk/reward trade. As I have reported numerous times that while shorting "overbought", preferably "very overbought" measures are often difficult to gage because markets can remain in an overbought state for days and sometimes weeks. I did a study, … [Read more...]

Divergence in the major benchmarks

The broad market index (S&P) gapped lower today today and never looked back. The push lower moved the major indices we follow back in a neutral state. Interestingly enough, the tech heavy Nasdaq 100 (QQQQ) surged higher creating a short-term divergence that will most likely settle out over the coming days. The move lower was to be expected given the reasons I stated in the blog Friday. Tomorrow and Wednesday bring bearish seasonal days and then the market ends the week with two historically bullish days. This is one of the few weeks of the year, according to the Stock Trader's Almanac, that the market experiences four days with historically significant bullish/bearish seasonal tendencies. As I always say, I never use seasonal tendencies … [Read more...]

Overbought/Oversold and Strategy Discussion

Daily Commentary  Two weeks ago I began following the overbought/oversold levels of 21 new ETFs. As reported at months end I would move all them besides the major market indices (SPY, QQQQ, IWM, and DIA) into the insider's page page for paid subscribers only. Paid subscribers will now have daily access to these numbers, so check the insider's page daily for the overbought/oversold numbers. We will also post how we use these numbers in our trading and this will be archived in the Insider's page for easy reference. SPX Iron Condor Strategy The SPX Iron Condor strategy made 9.3% during the September expiration period and if all goes well we should make around 7.5% during the October expiration period. The recent market … [Read more...]