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Market Commentary

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Dr. Pepper Snapple Group: Unusual Options Activity Shows Big Buyer

Shares of Dr. Pepper Snapple Group , the Plano, Texas-based soft drink company, has steadily carved out new all highs in 2014.  Shares are already up over 37% in 2014, having traded in a 52-week range of $43.18-$65.43.  

At least one institution seems to think the original “King of Beverages” is headed higher.  Last Friday at 2:05 pm EST, a trader came in to buy 5,755 DPS Nov 70 Calls for $0.65 in what was labeled an opening position.  

In terms of total risk premium, this trade isn’t exception...

Sep 23, 2014
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December British Pound Futures: Trading Idea September 23, 2014

December British Pound Futures a Buying Opportunity on More Price Strength

See on the daily bar chart for the December British pound futures that prices are in a fledgling uptrend as the bulls have gained some technical strength. See, too, that the Moving Average Convergence Divergence indicator has recently produced a bullish line crossover signal, whereby the thick blue MACD line moved above the thin red “trigger” line. A move in prices above chart resistance at 1.6450 would give the bull...

Sep 23, 2014
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Consumer Staples Gaining Strength, Consumer Discretionary Losing Strength

Consumer Staples stock sector ETF Relative Strength Ratio rose above the highs of the previous 6 weeks on 9/22/14, thereby signaling diminished trend weakness.

Materials stock sector ETF Relative Strength Ratio rose above the highs of the previous 4 weeks on 9/22/14, thereby signaling diminished trend weakness. XLB/SPY remains systematically neutral.

Consumer Discretionary stock sector ETF Relative Strength Ratio fell below its lows of the previous 8 weeks on 9/22/14, thereby signalin...

Sep 23, 2014
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Bearish Wedge: Could The Dow Drop 1000 Points?

One of my favorite patterns to follow, are bullish and bearish wedges. They are very easy to follow and when you combine the target line, you have a very good idea of where it may be heading.

When placing a target line on a wedge, you want to break the pattern up into 5 waves. The target line would be where you draw the line from the top of wave 1 and the bottom of wave 4.

It really is a very reliable pattern, as once the lower trendline breaks on the wedge that would be your confirmation th...

Sep 23, 2014
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Time To Cover Short Euro Position

I've been bearish on the euro since late July.

[Editor's note: see Burba's previous TraderPlanet stories on the euro July 29th and August 19th).

Key Points

Although there could be some more downside before the downtrend in this market ends, I feel less comfortable advising anyone to be short here. I base my stance on two points.

The first is the proximity to a substantial floor at 1.275, based on the lows in 2013. Granted, there's a little way down to go from the current level before getting...

Sep 23, 2014
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Featured Stories

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America's Role In the Middle East: Friends and Foes

The Professional Traders Opinion
Who’s on First?

Oddly enough, an ascribed Arabic proverb, dating to the 4th century BC, suggests “the enemy of my enemy is my friend.”   

There is now a 21st century edited version of that proverb; once again emanating from the land of Arabia but this time will need Aristotle to discern the logic; it goes something like this: “the enemy of my enemy is only my friend until my enemy is overthrown by America, a new government is transitioned and then my enemy of my...

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A Guide To Alibaba’s (BABA) Record-Setting IPO

Over the past month, the IPO market hasn’t provided traders and investors with many compelling opportunities as activity has dried up. With Chinese e-commerce giant Alibaba lined up to go public on September 19, the IPO market will soon come to life in dramatic fashion.

Demand has been so strong that its expected price range has been bumped higher to $66-$68 from the original expectation of $60-$66.  With BABA offering 320.1 million ADS, its projected proceeds of over $24.6 billion put it o...

Sep 17, 2014
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5 Common Misconceptions About Market Profile®

I was in junior high school the first time I was introduced to Market Profile. My Dad was a grain trader and the hedge manager for Ralston Purina, a huge manufacturer of animal feeds, not to mention the creators of Chex cereals and Rye Crisp crackers. He spoke of a friend, Peter Steidlmayer, who was devising a different way to look at markets. “Any interest in this, son?” Off I went on my skateboard as trading was not on my list of priorities, yet.

Years later, struggling to learn to trade, I ...

Sep 16, 2014
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Sixth Anniversary Of Lehman Collapse: Time To Watch Financials

This month marks the sixth year after Lehman Brothers filed for Chapter 11, an act that served as a precursor to market meltdown of October 2008.   

Six years later, and despite the amazing recovery for the general market since the market bottomed in 2009, the financials as a sector continues to lag.  

Figure 1, the 10-year PerfChart for the S&P Sector ETFs, depicts the Financials relative weakness during a decade plagued by low interest rates that created an environment for risk taking ending...

Sep 15, 2014
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A Game Plan For Trading Stocks In The Fourth Quarter: Window Dressing

Get ready for the most active season in the stock market.
 
The last quarter has the highest trading activity of the year for the stock market and for the market in general.

Here are some of the major events that traders are ready to speculate upon heading into the fourth quarter:

1.    Last earning season of the year – main reason why market will accelerate its action into the year end
2.    Black Friday / Cyber Monday so-called Cornucopia Trading
3.    Christmas Rally
4.    Quarterly Expiration /...

Sep 11, 2014
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