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Market Commentary

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What Does S&P 500 At 2000 Really Mean And How Can You Trade It?

Traditionally September is a month that sees a decline in the equity index markets. When markets put in new record highs, we often see a retracement from those levels. On the flipside, investors and market players have heard from the Fed and have a better picture of the Fed’s future plans. The shrinking of the stimulus program along with the hint of changing interest rates next year has not scared anyone away from the equities.

Numbers Stick

We often pay attention closely to numbers. It doesn...

Aug 28, 2014
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October Live Cattle Futures: Trading Idea August 28, 2014

October Live Cattle Futures a Selling Opportunity on More Price Weakness

 See on the daily bar chart for October live cattle futures that prices are in a choppy and sideways pause mode, after trending lower earlier in August. This pause is not bullish and hints that a fresh leg down in price action may be coming soon. A move below chart support at $147.00 would become a selling opportunity. The downside price objective would be $140.00, or below. Technical resistance, for which to place a pro...

Aug 28, 2014
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Implied Volatility Is Soaring In McDonald’s


Shares of the $92 billion fast food restaurant company, McDonald’s , are down 0.83% year to date vs. the Dow Jones Industrial Average’s 3.29% gain. From the May high of $102.95, McDonald’s is down 8.06% as comps and quarterly earnings have missed Wall Street estimates in the last two quarters. On August 22, McDonald's named Mike Andres the new president of its U.S. operations, following July global comps of -2.5% vs. the -1.2% estimate. U.S. comps fell 3.2%, but one bright spot was the +0.5%...

Aug 28, 2014
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Airlines Stocks Poised To Fly

Hi, World! I hope you’re doing sensational. I’m back from GA and had an enjoyable visit with the family. The market is closed this upcoming Monday. My girlfriend works at a bank and she’s actually off. Hopefully I am, too? Anyway, take time off this weekend. Make sure you enjoy yourself and spend time with your family. Maybe fly somewhere you haven’t been before!

Airline Stocks

Speaking of flying gets me thinking of the airline industry.  I believe the airline industry is poised to break out ...

Aug 28, 2014
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U.S. Treasury Bond Gaining Strength, TIP Bond Losing Strength

Bond, iShares Barclays 20+ Year U.S. Treasury ETF absolute price rose above its highs of the previous 15 months on 8/27/14, thereby reconfirming its preexisting bullish trend.

U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year ETFs Relative Strength Ratio fell below its lows of the previous 5 months on 8/27/14, thereby reconfirming a medium-term downtrend. TIP/IEF remains systematically neutral.

The S&P 500 Composite Index absolute price opened higher but quickly reversed to the...

Aug 28, 2014
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Featured Stories

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The Versatility Of The 1-2-3 Iron Butterfly

Traders may be aware of the iron butterfly, a strategy that creates a limit on possible losses, in exchange for a limit on potential profits. Expanding this further, the 1-2-3 iron butterfly is a strategy consisting of three expiration dates and three butterflies.

The middle is a reverse iron butterfly. This structure means that half of the positions will always become profitable whether the stock price moves up or down. And even with no movement, half of the positions – all of the short optio...

Aug 27, 2014
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Yellen Pulls Away the Punch Bowl, Will Rates Rise?

Let's focus in on negative interest rates and the potential for gold to increase in value.

As the Fed met in Jackson Hole over the weekend, gold was trying to hold on at the $1,300 level. Using a negative real interest rate model, gold should be around $1,400. Why? There is lots of concern about global GDP growth maintaining itself.

Let's take a look at the overall metals landscape. Some precious metals appear to be doing well. Palladium is at a 13-year high and rhodium is up 45% from the start...

Aug 25, 2014
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Use Oscillators To Determine Market Direction (Or Not)

Oscillators come in a number of different forms such as stochastic, relative strength and the commodity channel index.  Although the mathematical equations are different in each, the underlying principal by which oscillator calculations are made remains the same. 

How They Work

All oscillators compare the high and low of a given market move to its close.  This is the reason that oscillators are a bounded set of indicators. As the close of a market move approaches its high, the oscillator tra...

Aug 20, 2014
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The Professional Traders Opinion: Russian Sanctions Smoot-Hawley Revisited


Russia was once described by Sir Winston Churchill, as “a riddle wrapped in a mystery inside an enigma.”  Those words, spoken in 1939, eloquently described the Western sense of Moscow as inscrutable and a menacing country that plays by its own rules; perhaps they are no different now with the extraordinary exception that today’s Russia is dressed in diplomat’s pinstripes folded around a pugilist’s muscle with a checkbook of an oil baron.  

What’s more, today Russia, along with China, Brazil, I...

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Go Long: Concerns Over the Chinese Yuan’s Weakness Are Overblown

On March 6, 2013 we initiated a long recommendation for our clients on the Chinese currency, the yuan, through the purchase of offshore, yuan-denominated bonds an exchange traded fund.   DSUM closed 2013 with a 6.32% gain, the year’s best-performing bond instrument on a risk-adjusted basis, compared to a dismal performance of -4.83% for the average emerging market bond fund.

After this stellar performance, this year’s weakness in the yuan is no surprise to us.  While the U.S. Treasury and th...

Aug 18, 2014
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