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Friedman Hearts Pinochet

Tuesday, July 31, 2012

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Today would have been Milton Friedman's 100th birthday and, predictably, people on the internet are stumbling over themselves to give rapturous applause. 

In his Nobel lecture, Friedman...

Morning Update

Friday, October 24, 2008

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Our IWM double-calendar came under some pressure yesterday—but, as expected, higher implied volatility kept us out of stop-loss territory. After yesterday’s end-of-day rally, we had expected to see a reaction back to broken trend-line support (see 60-minute chart of IWM, below) , and possibly to the descending upper trend line, before a likely continuation lower. But with futures off more than 6% pre-market, it looks like the next down leg is here. Trading at the open will probably be…

Market Analysis and Entry Plans

Monday, October 20, 2008

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We’re seeing some bullish signs, as noted in Saturday’s Weekend Reading, and the upside thesis fits with seasonal tendency in election years. On the other hand, there are plenty of potential surprises coming up in the next few weeks. This week we’ve got earnings from Apple, Amazon and Microsoft, and next week VISA reports after market close on Wednesday, which is also when we get the new FOMC policy statement (should make an interesting—no pun intended—combination). The daily chart…

Close Trade Alert: Oct SPY IC #2

Tuesday, October 14, 2008

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We are closing the following position for October expiration: Day limit order Sell to close SPY Oct 111 put Buy to close SPY Oct 113 put for a net debit of $1.85 or better. We’re closing out the put spread on this October position and we will allow the calls to expire worthless.  While the market may move higher still this week, we want to offset the October losses a bit by closing this spread. More aggressive…

Panic and the Shiny Metal

Friday, September 26, 2008

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The Associated Press reports that the US Mint can’t keep up with the demand for gold coins: The U.S. Mint is temporarily halting sales of its popular American Buffalo 24-karat gold coins because it can’t keep up with soaring demand as investors seek the safety of gold amid economic turbulence. Mint spokesman Michael White said Friday that the sales were being suspended because demand for the coins, which were first introduced in 2006, has exceeded supply and the Mint’s…

Volatility Indicators Flashing Buy Signals

Friday, September 5, 2008

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The headline says it all, really.  Some of our short-term and more sensitive volatility indicators flashed buy signals premarket today, and futures are well off their worst levels of the morning. This is obviously not a newsletter trade – just some extra information that those of you who are more active traders may be interested to note. _________________________________ In response to some member questions: The volatility indicators we’re referencing here are proprietary tools that we’ve developed for identifying…

Morning Bounce Trade

Tuesday, August 19, 2008

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Historical surveys suggest that the odds are good for a bounce off this morning’s gap down. We will get long small here via some futures – though of course long stock or even small size options would work as well. We are looking to see the ES futures and SPX cash close near 1292 today, and we’ll set our stops somewhere around the 1265 area. Note that if we don’t start to see positive price action by 10:30-11:00AM EST, we…

Open Trade Alert: Sept SPY Iron Condor

Monday, August 18, 2008

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We are opening the following position for September expiration: Day limit order Buy to open SPY September 122 put Sell to open SPY September 124 put Sell to open SPY September 138 call Buy to open SPY September 140 call for a net credit of $0.55 or better. Analysis: This third September trade balances out our aggregate risk profile even further – it has a reasonable bullish bias but with a good range and plenty…

Weekend Portfolio Update

Sunday, August 17, 2008

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As we mentioned in the August Monthly Review, we don’t expect any dramatic selling this week, and may even see another leg higher. But this rally is starting to look a bit tired and overextended, especially in tech and smallcaps. SQWI for 8/17/08: -4 The SQWI was successful for the past two weeks in a row, but we’re tempted to disagree with the bearish reading this week – we suspect that the indicator is reflecting a bearish shift…

Crazy Dangerous Risky Bonus Trade: WPI

Thursday, August 14, 2008

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Our options scanner picked up some big activity today in Sept 30 and 35 WPI calls. There’s no corresponding activity in the puts. The Sept 35c are about $0.60. Rumors have it that Watson Pharmaceuticals may be a takeover target, possibly some Icahn involvement. As implied by the subject line, this is a purely speculative and high-risk trade. We’re grabbing a couple contracts purely as a gamble, and by no means do we suggest that anyone else do the same;…

Open trade alert: September IWM Iron Condor #2

Monday, August 11, 2008

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We are opening the following position for September expiration: Day limit order Buy to open IWM September 67 put Sell to open IWM September 69 put Sell to open IWM September 80 call Buy to open IWM September 82 call for a net credit of $0.47 or better. Analysis: We said in the weekend review that we’d like to see IWM continue up into short-term overbought territory so that we could open another September trade…

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Jared Woodard specializes in trading volatility as an asset class. With over a decade of experience trading options and other volatility products ... Read More

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