Warning: array_merge(): Argument #1 is not an array in /var/www/www.sfomag.com/helper.php on line 199 Warning: Invalid argument supplied for foreach() in /var/www/www.sfomag.com/helper.php on line 200 SFO

Market Commentary

More Market Commentary
banner_image

What I Look For In A Good Investment

If you’ve been investing very long, you no doubt understand the importance of having a solid system in place.

By “system” I’m not referring to a secret black box or to technical rules, though both can be valid approaches in the right hands.  I am speaking far more broadly.  Whether you are a value investor, a technician or a data-crunching quant, consistently making good returns in the market depends on having basic investment guidelines in place.  

Today, I’ll share with you the basic charac...

Aug 29, 2014
Read More
banner_image

Options Trading 101: Don't Hide Behind The Math

Don't hide behind the math! That is a common phrase I tell my students seemingly on a daily basis.  

That may sound quite odd coming from a statistics major, but it is one of the very important credos we traders must live by.

What Do I Mean By This? 

It means, don't let a mathematical output override common sense. 

Trade Example

Let's take an example when I was looking for an earnings play in Abercrombie & Fitch .  Through my research I saw that the market was pricing about a 9% move into ear...

Aug 29, 2014
Read More
banner_image

Follow The 3 Key Trading Rules Of Jesse Livermore

If you're a student of market history there is nobody you learned more about than Jesse Livermore.

Edwin Lefevre wrote his story in the book Reminiscence of a Stock Operator, one of my favorite reads.  He was truly a man before his time, making his fortune during the days prior to the Great Depression at bucket shops and fledgling brokerages.  

His tape-reading skills were legendary and are still marveled at today.  Though he finished his career a pauper and eventually committed suicide, his l...

Aug 29, 2014
Read More

Foreign Stocks Losing Strength, U.S. Bond Gaining Strength

Foreign Stocks ETF Relative Strength Ratio broke down below its lows of the previous 2 years on 8/28/14.

Bond, iShares Barclays 20+ Year U.S. Treasury ETF absolute price rose above its highs of the previous 15 months on 8/28/14, thereby reconfirming its preexisting bullish trend.

The S&P 500 Composite Index absolute price opened lower on a gap down below the lows of the previous 2 trading days. SPX bottomed out after the first 15 minutes, recovered all of its early loss by 12:47 pm ET, ...

Aug 29, 2014
Read More

The Market Is Stretched, At the Moment

Earnings reporting is almost complete, the recent positive economic data has been digested, China is forgotten for now, Europe’s lagging economy is well known, and Ukraine is, well, still a problem on the geopolitical front. So where does the market find a catalyst to go higher? For the moment, it appears there is no catalyst to take the market higher. Even the revised GDP from the second quarter is not moving the market higher. It is old news. The market is stretched.

Again, we are in a phas...

Aug 28, 2014
Read More

Featured Stories

More Featured Stories
banner_image

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
Read More
banner_image

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
Read More
banner_image

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
Read More
banner_image

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...

Read More
banner_image

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
Read More