option trading

Turning to Dust

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Stocks are staring at the 2200 SPX level and blinking.  Since there is no real impetus to drive things higher buyers are content to sit where they are and wait.  For some reason the Yellen at Jackson Hole speech is starting to take on meaning.  With a market lacking meaning anything is a reason to move us.  Gold and gold related names like the miners are getting hit hardest.

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MYL gets stung

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2015 gave us VRX and the corporate perp walk of the year as the CEO got grilled for jacking up the acquired drug prices.  Congress gave VRX the smear job and the stock lost 90% at the low earlier this year.  My blog of last week talked about VRX and yes it is time to buy juice in there again.  That is not my subject. Congress might have a new dog to beat and the name is MYL.

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VIX gets a smack

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So the Fed turns a bit hawkish and wants to raise rates.  There seems to be the opinion that this fall at some point rates will nudge up.  That has done nothing to dampen bonds and prices jumped again.  Since we are the only G7 country paying interest I guess higher rates make  US Gov bonds more attractive?  That also says something about volatility.

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Is this move a Turkey?

We had another day of near all-time highs with banks again leading the charge higher.  I think the IV is getting too cheap but that will be a story for the next blog.  I think the interesting story is coming out of Turkey.  Is it the real story or the non-story that is taking shape on the coup attempt for a NATO member?  The ETF that tracks the Turkish (TUR) market was down around 6% today.

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VIX up, SPY up so What is up?

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One of the most disturbing volatility patterns is VIX up, SPY (or SPX) up.  Vol should decline into the face of a rising market.  If it does not that is traditionally a tell that stocks will sell off at some point in the near future.  If I knew when that was I would tell you after I bought a boat load of SPX puts.  That date appears to be sometime next week.

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Is AAPL done being rotten?

Besides the airlines this cycle (AAL down $13 since earnings) AAPL has taken it on the chin with shrinking iPhone and iPad sales.  The big one is the iPhone which generates most of AAPL’s dollars.  Newsy rumors today that AAPL vendors are expecting much smaller orders cratered AAPL stock.  This is after a rough ride from $100 after earnings.  For a company that has mostly done everything right since 2000 it is a tough road.

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Gold Vol drops like, well, a gold brick

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Stocks got a little lift today on what I do not know.  Draghi made some veiled references but for the most part the Euro kept up it's inexorable climb along with the JPN YEN holding up at year highs.  Who would have thought the dollar would be in the tank and the two most troubled trading blocks enjoy bouncy currencies.  Dollar weakness should equal gold strength and we did not see that today.  The 1 day hold in GLD killed the momentum and the IV.

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