While we all know a correction to test the previous resistance will occur, the timing along with triggering news or unbalancing forces is yet to be determined. It could occur on the upcoming employment report or the market could continue higher for some time, but for now correction predictions, are just guesswork.
While Newton originally expressed it somewhat differently in 1687, the popular interpretation is that “An object at rest stays at rest and an object in motion stays in motion with the same speed and in the same direction unless acted upon by an unbalanced force.”
Goldman put out a comment prior to earnings season, which was something that I happened to agree with. It basically pointed toward the fact that, while the VIX was overpriced relative to market movement, it didn’t mean the component parts IV’s were necessarily overpriced.
If you want to learn to trade here?s a really useful option strategy that all traders should know. Let?s take a look at an option strategy that involves the selling of a put, often referred to as an uncovered put write or a naked put write.
A common mistake that novice traders and investors make is to add to their losers. I have addressed this problem before and explained why it is not a profitable strategy in the long term. However, since we cannot add to losers, what about adding to our winning trades?
Although the increasing VIX premium over the VIX cash suggests the professional hedging community is growing more cautious we think this is the time to increase long positions and accordingly have another long call spread idea for the occasion.
Sir Isaac Newton was was born in England in 1642 and is considered one of the greatest scientists and mathematicians that ever lived. He lived for 85 years. In college, he had strong ideas about motion and broke them down into three laws which I will explain in simple terms below.
From the S&P 500 Index (SPX) perspective the breakout and close above the September 14 high at 1474.51 confirms a new uptrend measured from the November 16 low at 1343.35 with the December 31 reversal low of 1398.11 making the second point for our upward sloping trendline as shown on the chart below.
Trend followers have had a windfall as the Yen has moved one way virtually uninterrupted in recent months shedding 13% since the beginning of October.
I have spoken with many new options traders and realized they do not have a full understanding of how options pricing works. Most traders trade the equivalent of a lottery ticket.
Trading Commodity Futures on a Central Exchange has been around for about 200 years. When Futures trading on these Exchanges was first started, it was designed to allow Commercial traders to offset price risk.
One of the first things we try to convey in the Pit Report each day is what the volatility markets are doing. There is always room to discuss a stock going up or down but volatility study is one of the places we help our clients most. A day like today is the perfect example.