April 19, 2014

Another Good Expiration

The High-Probability, Mean-Reversion strategy experienced another good expiration cycle. All of our trades were profitable including the SPY 188/190 vertical call spread. Volatility has returned as witnessed by the VIX and it shows in our high-probability approach. I continue to appreciate all of the kind words and hope that our high-probability approach is making a difference in not only your approach to how you invest, but in your returns as well. Thanks again for all of the support, Andy … [Read more...]

Pay Close Attention to These Few Notable Areas

High-Probability, Mean-Reversion Indicator

The short-term reprieve finally came and now we are back in a short-term oversold state. The pullback today gave all of our positions some breathing room, including our SPY 188/190 bear call spread. Our recent trades for April expiration look very good as well. Over the next week or so I will be placing a few iron condor trades, so subscribers stay tuned. With the recent advance in the VIX, there is some decent premium out there in the major market benchmark ETFs. If the VIX can push towards towards 17 - 18 or higher we can really widen out our ranges and bring in some decent premium at the same time. Another ETF I'm watching right now is DBA, the agriculture ETF has skyrocketed since the beginning of February without  pause. Is … [Read more...]

The Fight is On — Which Way Will the Russell Turn?

3-11-14

All of the major benchmarks are back in a neutral state...but for how long? But, if we look at our shorter-term readings (not shown here) most of the benchmarks are in a very oversold state so a push higher over the next day or should not be unexpected. However, don't forget the huge gap up that has yet to close in almost every ETF we follow. I expect we will see the close of the gap before March expiration arrives. As for the small-caps, the Russell 2000 ETF is hovering around its upward trendline from late 2012. It dipped below $118.50 today and if it manages to stay below those levels we could see a new overhead resistance form. My positions certainly would enjoy a reprieve over the short-term. If you are a believer in a … [Read more...]

Several ETFs in a Short-Term Overbought State

3-10-2014 5-35-29 PM

Agriculture and India are both in an extreme short-term overbought state. Couple the extreme readings with the fact that the overall market, as seen by the S&P 500 ETF (SPY), is also overbought I would expect to see another short-term reprieve going forward. I've established a few April expiration positions, more specifically a few bear call spreads, to take advantage of the recent overbought readings in the major indexes and are are working well so far. As for my March bear call spread, I am very close to the short strike and will certainly keep everyone (subscribers) aware of any pertinent moves. Stay tuned! If you are a believer in a statistical approach towards investing please do not hesitate to try my options strategies. … [Read more...]

Options Premium Expires as January Expiration Ends

Friday is the end to another successful expiration cycle. Unless the major market indices  rally 2% tomorrow our bear call spreads should be in good shape. Typically, I would've taken them off, locked in a profit and sold more options premium, but the positions were never in jeopardy of taking a loss. As a result, I will allow them to expire worthless reaping the max profit. Quick Note: Remember, paying commissions should NEVER be a reason to hold on to a trade, especially if there is little to no premium left in the trade. Why risk making an additional $0.05 when you could potentially lose $1.95, it doesn't make sense. For this reason brokers like Thinkorswim offer there clients free commissions for anything less than  a $0.05. It … [Read more...]