Market CommentaryMore Market Commentary
Hasten slowly and ye shall soon arrive.
In August, we came out and openly stated in an article titled the Gold bull is dead that it was not the time to buy Gold. At that time, many analysts were calling for a bottom and much higher prices. We stated that there was a high probability that Gold would move lower before bottoming out. Fast forward and that outlook has come to pass.
So let’s see what picture fundamentals paint.
Demand for Gold is soaring according to the World Gold coun...Read More
The S&P 500 has spent the month of November oscillating from resistance to support and back again.
The zone of resistance that turned the index lower as November began is again being tested as we head into Thanksgiving. This high-volume area resistance is at 2092 – 2115 as shown in the chart by the large volume-at-price accumulation from the first half of the year. A move above this resistance zone would suggest further extension and upside gains. A move over this zone would be a signal th...Read More
Last Thursday’s weekly export sales report showed 1.797 million metric tons of beans were sold for future shipment. That was up 39% from the week prior and 43% over the 4 week average. China was in for 1.644 of the total. We saw 607 thousand metric tons switched from another U.S. port and a reduction of 353 thousand. These are large numbers and probably from China. Actual exports were 2.271 million metric tons with China in for 1.747 of the total. This shows that China is in buying beans...Read More
Until very recently, the Biotech sector was the most energetic engine behind the Nasdaq bull market. Over the last few months, however, it has been notably lagging. Sectors get ahead of themselves as investors and traders chase momentum, which is why Biotech has fallen into a mini-bear market. The Nasdaq Biotech ETF , my proxy for the sector, has taken a 20-25% haircut from the all-time highs posted in July.
Of course, given its huge multi-year run-up, this down-draft is potentially nothing m...Read More
At least one trader is not expecting holiday cheer for retail stocks. Less then 30 minutes into Monday’s session, 25k of the XRT Dec 12/31 44-40 put spreads traded on the PHLX.
The trader bought 25k XRT Dec Quarterly 44 Puts for $1.25 and sold 25k XRT 12/31 Quarterly 40 Puts $0.22, establishing a Bear Put Spread for a net debit of $1.03.
The total premium outlay for this trade was $2.575M with contracts that have the potential to control 2.5M share of the underlying .
Perhaps the Fed will ...Read More
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The S&P e-Mini is one of my preferred trading markets. Because it is so actively traded, this market typically has excellent structure. What is structure, you might ask? It’s the areas of support and resistance that the market creates and reveals by its own actions on the chart. When a market is actively traded like the S&Ps, it is usually well-behaved and creates obvious market structure, which can then be traded. This is what makes the S&Ps such a good trading market.
Trading Market S...Read More
Despite the lack of broker approval, short option trading can be a high probability strategy
In last month’s article, we focused on the risks and challenges of short option trading, but now let’s center on the positive. The primary advantage of an option selling strategy is its ability to generate profits regardless of market direction. Further, an option seller can be wrong in regards to market direction and still make money. It is the only strategy that I’m aware of that offers such a hi...Read More
On Wednesday night, mobile payment processing company Square is expected to price its 27.0 million share IPO within a range of $11-$13, equating to total gross proceeds of $324.0 million, based on the mid-point of the proposed price range. As followers of the IPO market are keenly aware, high-profile deals – particularly from the technology sector – have been few and far between over the past several months. There will be no shortage of hype surrounding this deal, though, and the scarcity o...Read More
If you’re looking to put some high percentage option premium in your holiday gift bag, taking the opposite tack of the public in Natural Gas could be a great bet this year.
A popular notion among the public is that you buy natural gas ahead of winter. Gas prices, they reason, will have to rally once it gets cold out, right?
It sounds great but as with many things in investing, what sounds logical is often misleading folklore. The reality of it is this. Cold weather will indeed increase deman...Read More
Financial media and the financial industry pepper us with advice and recommended choices for “properly” diversifying our portfolios.
Almost without fail, this magic formula consists of a mix of stocks, bonds and cash. The more adventurous may go as far as recommending a real estate investment trust or Master Limited Partnership .
Yet, CNBC.com ran an insightful article several months back entitled “The Top 5 Mistakes Made by High Net Worth Investors”
Most telling was the #1 mistake on the li...Read More