Market CommentaryMore Market Commentary
When making a bullish directional play, why would I consider a call calendar and not just buying a call vertical or selling a put vertical?
A Quick Review
A call vertical is when you buy a certain strike and sell a call with a higher strike price. For example, the PANW March 6th 150/155 would be an example of a call vertical. A calendar spread is when you buy a strike in one expiration and sell the same strike but different month. The PANW March 6th/ March 155 is an example of a call ...Read More
The ESH5 stepped back from the rally yesterday and wandered down for a close 9.50 points below the previous close. It gapped down at the open, dropped to our support level around 2095, and moved back up in the afternoon to close at 2104.75. Volume, as usual, was weak, but about average for these times.
The lack of any real selling pressure on US equities was a little surprising, given the news in Europe and elsewhere. A colonel in the US army claimed in a speech that the US will hav...Read More
On Wednesday, the Nasdaq 100 survived a test of the Volume Point of Control at 4441.25. Notice the size of the histogram peak . This is a hugely important level, and it has been tested six times in the last two weeks.
The NASDAQ is demonstrating relative strength vs. the S&P and is resisting the pull of gravity.
My upside target zone is 4525-4530. That said, keep both directions in mind. A decisive break of 4441 will stair-step down on those thin blue levels to the red circle around 4410. Th...Read More
US auto sales come in soft, the market retreats from yesterday’s run up, and the rest of the story is filled with bits and pieces of solid fundamental evidence that Europe is healing and almost half the big-cheese leaders of American corporations plan on spending some money this year. Did I get the gist of the news? Oh, yeh, and oil is still struggling with record inventories.
- Oil rebounded on Tuesday from the previous session's tumble, lifted by fighting that threatened Libya's oilfields, al...
Happy days are here again for NASDAQ bulls, as the composite tech index hit a new all-time high yesterday and traded at its highest level since March of 2000. PowerShares QQQ is part of that happiness, as it has offered steady growth in recent years - the ETF rose by nearly 18% in 2014, and is already up over 5% year to date.
So what is driving this tech optimism, and is there more room to the upside before this 1990s style bull run shows signs of abetting?
Strong performance from consu...Read More
Featured StoriesMore Featured Stories
Last month, we initiated the discussion of inter-market relationships focusing on the currency market’s influence over commodity prices . Let’s turn our attention to the relationships that exist between various asset classes. Some of the conclusions from data will likely go against conventional wisdom.
Stocks and Bonds Can Go up and Down Together
The oldest adage in the finance industry is, “Stocks up, bonds down”. The quip stems from conventional theory suggesting there are two primary i...Read More
Believe it or not, it was illegal, until very recently, for you to unlock your smartphone and take it from one carrier to another.
Yes, illegal in the traditional sense. Thanks to a quirky interpretation of the Digital Millennium Copyright Act , those who unlocked their phones, even as recently as a year ago could wind up behind bars for an unfathomable five years. That’s a long time for something as innocuous as using your property the way you want to use it.
But in 2014, President Barack Ob...Read More
Random price movements leave us with very little edge when it comes to reading the charts and technicals. Never mind fundamental analysis, which is simply impossible to explain how stock can move violently after a news event. The market is simply designed around accumulation and distribution, seen very clearly on a price and volume chart. Yet, when these buyers and sellers are pulled in each direction by the market, there is an uneasy feeling about participating.
The erratic behavior in pr...Read More
The European Central Bank recently announced a trillion- dollar package to fight inflation. Whatever these central banks do will not have any effect on the world, short-term.
The ECB program involves printing 60-billion euros per month, which is nearly three-quarters of a trillion euros per annum, and they will start in March 2015 and end in September 2016. Their goal is an inflation target of two percent. The program involves the buying of euro-denominated assets. A bankrupt Europe does not...Read More
Too many traders, trading psychology means dealing with negative emotions like fear and greed. We all know that negative emotions can cause trading difficulties. However, many of us don’t know that the way we think can cause big problems, too. We can be blind-sided by our thinking and decision making—especially when we use our normal, everyday problem-solving approaches in trading. These are traders’ mental blind spots, and they crop up in every trader’s trading. The irony is we usually ...Read More