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Market Commentary

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Spotting Unusual Options Activity In Avanir

Monday saw shares of Avanir Pharmaceuticals soar on positives news from a mid-stage study on the company’s new Alzheimer’s drug AVP-923.  Shares climbed $5.24 on the news.

Unusual Options Activity

At least one trader anticipated positive news from the study.  Monday morning at between 9:38 and 9:39 am EST saw a trader come in buy 650 AVNR Sep 10 Calls for $0.39.  Less than 10 seconds later, another 1,245 contracts in the same line were purchased. 

What Does This Mean?

With the potential to ...

Sep 16, 2014
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Stocks: Use Sentiment To Predict Future Trend Reversals

Measuring investor sentiment has always played a big part in my trading.

All trend reversals will almost always take place at sentiment extremes. It is just the way the markets work, when too many are bullish or bearish on the stocks, they will have high odds of reversing the trend shortly after.

I developed a few short term sentiment models that measure how traders are positioning their portfolios with bonds to stocks. When it showed traders were flocking to bonds, it meant fear was in the m...

Sep 16, 2014
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December Canada Dollar Futures: Trading Idea September 16, 2014

December Canada dollar futures a selling opportunity on more price weakness. See on the daily bar chart for the December Canada dollar that prices are in a steep downtrend and have recently hit a 5.5-month low. The bears still have downside technical momentum to suggest prices will continue to trend sideways to lower in the near term. A move below technical support at last week’s low of .8990 would become a selling opportunity. The downside price objective would be .8800, or below. Technical ...

Sep 16, 2014
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Gold Update: Downtrend Still Looks Good

On September 2 I wrote about an attractive short scenario in gold associated with a breakdown from a large symmetrical triangle formation. That breakdown ended up being pretty decisive. The evidence favors further downside ahead.

Technical Outlook

Specifically, in addition to the poor price structure, I'm looking at weekly momentum. Take a look at RSI averages at the bottom of the accompanying chart. The slow average stalled around the 50 midline in April. In the past two weeks, the indicato...

Sep 16, 2014
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The Largest Cap Stocks Are Gaining Strength, Commodities Are Losing Strength

The Largest Cap S&P 100/S&P 500 Relative Strength Ratio rose above its highs of the previous 8 months on 9/15/14 and is now systematically bullish. Large Caps tend to outperform in bearish general market trends as investors seek the perceived relative stability and safety of large size.

Copper, iPath DJ-UBS Copper TR Sub-Index ETN absolute price fell below its lows of the previous 2 months on 9/15/14, thereby reconfirming its preexisting downtrend.

Agriculture, PowerShares DB Agriculture ...

Sep 16, 2014
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Featured Stories

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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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Yes, The Market Will Crash: Here's Your Checklist To Prepare For It

With the Dow recently surging past 17,000, the debate is on about whether it is a bubble that is looking for a pinprick or if it is a strong bull market that will power past 18,000 and beyond.

Yes…it could definitely go to 18,000 or 19,000 or more in the short term because the main driver is not a bullish economy…it is the bullish impact of Federal Reserve policy. In other words, this is an artificial bull market that is driven by monetary stimulus. The danger of a pull-back or a sharp correc...

Sep 10, 2014
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Performance Anxiety For Traders: 5 Ways to Overcome It

Performance anxiety for traders is the fear, or persistent phobia which may arise in a trader by the requirement to take a real trade, in real time, with real money whether actually or potentially.

There are many causes of this anxiety which many times leave a new trader with too much fear to really trade. Fear sends them out of the markets to go join the 90% that did not make it. This fear can arise from past losses that were so big and traumatizing that a trader can’t bear the potential of...

Sep 9, 2014
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Create Personalized Charts And Displays with Excel®

In previous articles I have detailed how to use Excel’s data visualization functionality to highlight market information. The data is brought into Excel using Microsoft’s RTD syntax from a market information and trading platform.

The article, Excel Heat Mapping For Market Data Visualization, shows the steps to heat map percent net change and color those markets that were at the extremes of percent change up or down for the day.  A separate article, Use Excel Sparklines For Data Visualization,...

Sep 3, 2014
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