Last week's call had me nervous for a second there. A very chaotic week, but I had several opportunities to put on a couple positions. Hats off to anyone who waited for that upper expected move. (two opportunities)
Large expansion for the expected move from last week to this week = expect volatility to pick up.
Couple quick notes:
- 10 yr / 3 mo yield inverted....
Pop and Drop likely. Target $2842.75 Gravity Point.
Next week is a positioning week. A bigger move is likely setting up in the following week. Take off / Put on Risk above and on that Gravity Point. Price must be firmly and immediately rejected, if price hops above $2842.75 and sits on top of it for a couple days the probability of profiting on a short trade...
The market's are being influenced by a single stock. How? Well there are linkages and arbitrage opportunities between the big Indices --> SPY, DIA, QQQ
What does this mean? This means that if you can make the Dow go up, you can make the S&P go up. If you can make the S&P go up, you can make the Q's go up and vice versa. Can you give me an example? Sure, the fact...
No call this week. The Breadth readings on the indicators I follow are all still rising. The Sentiment indicators I follow are all beneath an extreme reading. The Technical indicators I follow are all showing resilience despite their overbought levels which only confirms the trend. The Economic indicators I follow are quite mixed, some are turning from bearish to...
Last week's Expected Move was $47, this week contracted and is only $40.
Last week's price action was an excellent example of why I use these two tools in concert with each other.
Starting off the week we sprinted down and traded into the lower Gravity Point, just above the lower $47 Expected Move. Almost on the button we turned around and ran up to the next...
Next week will be perhaps the most important week of the year. Given the number and size of companies reporting, I can't emphasize enough to keep your seatbelts on. Thursday is the biggest earnings day.
Important Economic Events that happened last week:
1. The Economic Forum in Davos was downright pessimistic. Maybe a little bit overdone, but still these are...
This is the most spectacular rally I've ever traded.
We cruised above last week's $46 expected move. Actual Move? $74
So we broke outside the expected move, and yet this coming week's expected move is only $41? What's the deal?
Well it's only a 4 day trading week. So the options market did increase their volatility. $41/4 days = $10.25 vs. $46/5 =...
Not a whole lot else to say other than that.
Transports are the brother of Small Caps in my opinion as far as leading the rest of the market.
Just want to point this out because it's a canary in the coal mine and easily missed.
1 Wk % Change:
IWM: -5.52% (Leading)
Volatility Expansion from last week's $62 Expected Move. I actually expect us to burst to the upside and then Fade for the rest of the week.
You can see the 'Event Risk' being priced in because of the G20, but on Monday we have a $47 Expected Move in one day alone. I marked this in Yellow on the screen.
Interestingly enough, Monday's $47 move brings us up into...