April 26, 2017

Can the Dow (DIA) Continue at this Pace?

I think the answer is obvious. The Dow pushed higher for the 10th consecutive trading day. The Dow hasn't seen a streak like this in over 17 years. Three months into the year, the Dow has shot up nearly 11 percent while the S&P 500 has gained 9.6 percent.                                     For those of you familiar with the normal distribution model, the Dow is on now firmly entrenched in the  tail portion of the curve. Basically, when we see a streak like what we are currently witnessing in the major market indices a correction is not far behind. Think about it for a second. The … [Read more...]

“Moneyball” Takes Down Wall Street

Before I get started I wanted to let all of you know that I will be opening up my two (possibly three) strategies over the next week. So far, the interest has been overwhelming. I will be limiting the number of subscribers to keep emails down and to make this a very personal experience for subscribers. If you are interested or have any questions please do not hesitate to email me at crowderoptions(at)gmail.com. By now I am sure all of you are aware of statistics guru, Nate Silver. The unabashed numbers geek, professional poker player, baseball statistician and creator of the FiveThirtyEight blog on The New York Times website correctly predicted the outcome of all 50 states. In 2008 he accurately predicted 49 out of 50 states. There … [Read more...]

When Trading Options Use Probabilities to Your Advantage

I am often amazed by the  lack of common sense when it comes to investing. Investors seek the best possible information, unfortunately most turn to the wrong sources. For starters, turning on the television for investment advice, in most cases, is a big no no. Yet, how many people listen intently to the daily drivel coming out of screaming mouths on CNBC. Investors, particularly traders, should know that every trade spouted from these sources have a 50% chance of success. Add in transaction costs and the probability declines further. Yet, the majority of investors and traders take this approach, mostly because they aren't privy to any other form of investing. Self-directed investors aren't aware that there are strategies based purely … [Read more...]

Traders Rejoice?

Nope. Yet again, the bears stumbled mightily during the final hour of trading. As Jason Goepfert of Sentimentrader.com stated, "The late-day rebound saved the indexes from suffering what could have turned into a relatively large down day.  That marks day #30 so far this year without a 1% down day, the 14th-longest streak since 1928." It is expiration week, so moves like today's are to be expected, but the price action today was indicative of the last several weeks - down at the open rally towards the close. The low volatility market has been frustrating for most traders as most of us tend to take short positions as the rally moves further and further into the outliers of the bell curve. We all know there is the inevitable … [Read more...]

One More Time – Bulls Look Ripe

NEW YORK (AP) -- Stocks had their worst day of the year Friday after Greece hit a roadblock on its way to a critical bailout. Seriously, with a headline like Stocks fall sharply as Greek deal is held up you would think that the Dow just lost 300-500 points. Nope, just a paltry 0.71%. Yes, let me repeat 0.73%. The worst day over the past 2 ½ months has been 0.73%. Okay, so with that being said, in which direction do you suppose the market will move  over the short to intermediate-term move? Would you say the risk is now to the upside? Do you think probability lies with the bulls or bears after an average years worth of market gains in just 28 trading days? As most of you already know, almost every indicator I follow, both technical … [Read more...]

Excited for the Week Ahead

As my loyal readers already know, almost every indicator I follow, both technical and sentiment, is bearish. But, something  today made me particularly happy. More food for thought. If you haven’t already, don’t forget to sign-up for my : Free Weekly Options Report High-Probability, Mean-Reversion Options Strategy : Free 30-day trial Theta Driver Options Strategy (limited room available): Free 30-day trial Twitter? Join Here. Also, for those of you who live on Facebook. You can access my info there as well. Just click on LIKE. Kindest, Andy … [Read more...]

Have We Lost Our Minds

If you haven’t already, don’t forget to sign-up for my : Free Weekly Options Report High-Probability, Mean-Reversion Options Strategy : Free 30-day trial Theta Driver Options Strategy (limited room available): Free 30-day trial Twitter? Join Here. Also, for those of you who live on Facebook. You can access my info there as well. Just click on LIKE. … [Read more...]

Some Interesting Probabilities Surrounding Payrolls

Will the beginning of the "anticipated" correction come tomorrow? The Nonfarm Payroll report is often a market mover and I expect to see much of the same tomorrow. The market is wound tight and typically when that occurs we are witness to a large directional move. I expect, regardless of how positive (or negative) the report is tomorrow, the market will push lower. As most of my loyal readers know (and thank you all for the amazing support by the way) there has not been a shortage of bearish indicators as of late. Over the past two weeks, with volatility drying up (VIX now in the low 18's) due to the tight trading range over the past two weeks, bearish indicators have piled up and have reached extreme proportions. I compare it … [Read more...]

How Long Can We Teeter on the Edge

January's rally was admirable. It's perseverance frustrated bears. The infrequent single day declines maxed out at -0.6%. And the last nine days of the month were more than mind-numbing for most traders as the market traded in a very tight range. There's no doubt the bears are ready. Almost every technical and sentiment measure I follow has pushed into a bearish state. Typically, I am ecstatic by the weight of the bearish measures, but it seems everyone is aware of the measures and have joined my camp. And when what seems like the herd is anticipating something it has a hard time coming to fruition. We must remember that January is one of the strongest month of the year for the market. February not so strong with a … [Read more...]

Bold Enough to Call A Top?

Well, I already made that mistake. 1.9% lower. Check out my post from last Tuesday. But, 1.9% lower really isn't that far. Especially if you consider all of the bearish indicators that currently reside on  a sentiment and technical basis. I use very few indicators. I am a strong believer in the linear regression of time and price.  You know, mean-reversion,  bell curves, simple overbought/oversold indicators. Simple, logical, intellectual and more importantly mathematically sound indicators that are the first step towards long-term trading success. Emotions are nonexistent. Time and price determine my parameters. Basically, I apply statistical principles first and foremost. And the credit spreads I apply all have the probability of … [Read more...]