The market was down a bit yesterday but believe me when I say it was only a tease for what's coming. It looks like we will possibly move back up today but do not fret short sellers, this is going to look like cliff jumping before it's all over.
This also is a perfect example for me to use when I am trying to explain to people how I trade. I should write a book...
I don't want to beat a dead horse but there is way to much greed in the market right now and there are many reasons for this. The point is that I would not be pushing it.
Very soon we will have very attractives levels to get long from.
Recommendation is simple. Co to cash and wait or get short. I favor the latter because you will make really nice profits. And...
FAKE News actually has one thing I like. It's called the "Fear and Greed Index". Folks, I have been using this indicator for years and it just flat out works.
I have had people email asking me why I have been continually talking about the correction soon coming. This is one of the main reasons why.
I believe what is happening today is the classic blow off to the upside on the stock market, notably the SPY or S&P 500 index. All the internals that I look at are screaming that we are way over done to the upside.
Today I will be adjusting my Put Spreads accordingly to profit for the inevitable sell off.
We did have a selloff of sorts yesterday as expected but the volatility, measured by the VIX, remained relatively low. This leads me to expect more downside near term.
I do not expext a massive selloff but you never really know. For now, I 'm looking for the SPY into the 345-350 area.
I was asked yesterday about the option strategies I use trading the SPY.
The answer is that I use many depending on my bias and/or the current volatility in the market.
Currently, because I am looking for a pullback and in addition, an increase in volatility I have Long Put Ratio Back Spreads on. I try to keep them neutral each day by adjusting level Deltas.
Yesterday the market was up again on more good vaccine news. As an option trader, I am positioned for a nice pullback coming very soon.
The beauty of option trading is that I can adjust profitably as the market move opposite to the direction I am expecting. It is just a matter of time time now.
On key point I want to make is the importance of money management....
I have been trading a very long time and I can assure you that a sell off pullback is coming very soon.
If you are a trader look for setups for a sell signal. I don't think it will be very long lived but it will be painful for stubborn bulls.
If you don't like to short, wat for the pullback to enter. If you don't want to sell your stocks, you should, at the...
The market was down yesterday pretty good and I am expecting more downside. If you are someone that likes to ride out trend runs look for a pullback into the 20 and 50 SMA's for a nice entry. Traders like me, will be looking for a nice sell signal today.
I am looking for opportunities to get short near term. Again, I use option strategies to do this. If you are a day trader using the SPY or maybe the ES
Futures, I would be looking for a nice sell signal.
Longer term people should go to cash and wait for the sell off to jump back in.
Today has some mixed things going on. The positive for the market is the very low VIX or fear index. The negative is that it is getting up into the highs without a lot of excitement. This is not my kind of day for trading but you could look for buy setups if you must trade today.
After the big news yesterday on the vaccine, the market (SPY) pulled back a bit. I suspect people were taking profits and taking a stab at some of the stcks that will benefit from things opening up soon like Cruise Lines, Airlines, Hotels, Restaurants,etc.
As for me, I will be looking to get long with some option strategies very soon if not later in the day.
The market is rocking right now due to the news Pfizer has a 90% effective vaccine. As the old adage goes, sell the greed or sell the news if you are a trader. I know I will be doing low volatility option strategies with a downside bias.
So today it seems that although the SPY didn't do to much, the volatility was sucked right out. The market also tried to push higher without much follow through.
What this means is that at this moment she's poised to "rock and roll". The VIX is below recent lows and the market has went straight up since the sell off. We have all seen this before.
I trade options...
If you have been following the election, you will see the volatility has been really dropping in the stock market. The reason, I think, is the fact that there is apparent gridlock in the US government. The markets love this because know drastic changes can occur easily. If things end as they are now the Republicans still retain the Senate which will eliminate the...