01-26-14 Weekly Review & Watch-list

Cancel all orders!! Cancel all orders!!! I'm kidding.. but that's what it feels like on social media, right?  On a serious note though, 2014 has been a big change of pace from 2013 so far.  As I continue to tweak the weekly review posts, this weeks tweak will be replacing the NASDAQ and Russell 2000 with bonds and gold.  I think this is better than just focusing on stock indices for getting a macro look.  Anyway, the change of pace is that bonds and gold have gone straight up as stocks are stagnant and now falling.  I know I was talking to a few others on StockTwits at the beginning of the year about how it really feels like things are changing simply because it was a new year.  And maybe that little taper has something to do with it but whatever the case, it's happening.

U.S. Dollar Is Packing Heat

By "packing heat" I mean packing and building up volatility, and as a technician I base that on one thing.  The Bollinger bands are extremely tight right now getting tighter as every month goes by, and this is taking place on a monthly chart.  I don't have enough data to see when the last time this happened was but this is the tightest they have been in at least 20 years, and honestly I don't think that's a good thing.

01-19-14 Weekly Review & Watch-list

This week was still not very active but more so than last week.  Earnings is really getting in the way of a lot of the trades I want to take and the good setups out there which is pretty irritating, but there was a few great opportunities that I took advantage of.  I think a lot of market participants are unsure if the market can continue to head higher from here without a correction but yet at the same time feeling like they need to continue to buy on every dip and it is being reflected in the price action of the indices.  Although the weekly charts are still looking very strong.  I think earnings is going to be the deciding factor and we get a lot of reports in the next two weeks.  I also think people are starting to think about the decision to taper and whether or not it is going to have an impact as a lot of the earnings so far are mediocre or have completely slaughtered a few names.

Gold - The Bigger Play

The other day I mentioned something on StockTwits about hoping that gold bottoms out soon so that whoever is hitting the bid with hundreds of thousands of contracts would get steam rolled.  Later that night I was sitting at the computer looking at the longer term gold charts.  I think it should be quite obvious who is hitting the bid with that many contracts every so often.. JP Morgan is nearly a sure bet and likely a few of the other big banks.  They are known for rigging markets and paying the consequences by giving the government their cut in a lawsuit for allowing it to go on until they are finished.  Then I started thinking about how these banks aren't that stupid to just continue to hit the bid selling naked what sums up to millions of contracts.  There could be collusion with the Federal Reserve in this gold market manipulation to help the Fed protect the confidence in the US Dollar, but aside from that there is likely a bigger game being played here.

01-12-14 Weekly Review & Watch-list

Overall a pretty slow week for me.. failed breakouts, sloppy price action, low implied volatility, upcoming earnings in the way, etc.  My best trade was getting long GMCR on Monday morning.  Until earnings can get out of the way its just going to be selling premium in the weekly cycles before the announcement, short term (few days) positions, and ETFs.  Also as I am still getting adjusted to putting all my focus on trading options, I shortened up my list of stocks from something crazy like 200 names to just under 50 names to follow.  These are I feel the most volatile and/or liquid options markets so I can just have a list of high quality stocks to follow as well as it being much more manageable.  If you want to see the entire list just click right here.  Those are the names that I will be using for this post every week.  Of course names will come and go as the market changes but for now that's it.

Know Your Option Premiums With IV Rank

The right way to follow option premiums for the longest time was following implied volatility and just kind of knowing the history of the stock you are following, which is still what I am talking about doing here but in a much more efficient way.  For those of you that already follow IV Percentile or IV Rank, then this post will probably be a waste of time for you to read unless you just love reading my amazing posts.  Surprisingly less people use this than I thought they would, which is the only reason I am making this post.  There isn't much to explain here so I will keep this one short (seriously this time).  IV Percentile is a tool that the founders of thinkorswim® came up with a long time ago, and they will tell you themselves that this is the biggest breakthrough in following options pricing they have come up with.. possibly even the biggest breakthrough in options trading period aside from ToS itself.  With that said, it should be a shocker that it is only found on ToS.  That isn't because of copyright laws or anything, it's because brokers don't understand what traders need in the front-end for the most part.

01-05-14 Weekly Review & Watch-list

First post of 2014, and officially the first week starts Monday.  For the past two weeks I have pretty much taken off, watching the screens when I have nothing to do.  In the watch-list I am going to just start posting both the weekly and daily charts so you can see what I see.  Also, I added the 18 & 20 EMAs to my charts that I used to use because I found myself flip flopping a little more than I like since moving back to swing trading so that will be the filter I use since I am most experienced with those.