Tag Archive | "XLF"

Our Broken Economy

Wednesday, June 11, 2008

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Forgive us a short rant this evening. This country is sick. When the three main engines of growth – consumer spending, real estate, and financial services – are broken, it’s just not possible to make any economic progress. And for just a moment, let’s think about how pathetic those key sectors really are. Cogent analysis of our per capita consumption requires some historical knowledge, since no contemporary people compares with our particular level of decadence. At least the Romans had…

There, That’s Better

Friday, June 6, 2008

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This morning (premarket) we sent a note to subscribers laying out some hedging strategies, should they be needed in the event of a continued rally. Happily, not only was that note totally unnecessary, but today’s fantastic drop has us ideally positioned going into next week. As several members mentioned today in correspondence, the advantages of market-neutral trading strategies aren’t limited to markets that blandly drift sideways; being neutral is also a great way to avoid the day-to-day whiplash of the…

Markets at a Key Juncture

Sunday, May 11, 2008

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The S&P 500 is sitting right at the trendline that extends from the March lows, and is also right at the 20DMA, which is a reasonable place to be after drifting above that moving average for the past couple weeks. Market internals suggest that this pullback may be about finished, providing a setup for some further upside; breadth and on balance volume improved on Friday. At the same time, options sentiment is still bearish, and a few technical indicators (CCI,…

Panic and Euphoria at the Disco

Monday, April 28, 2008

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This week should be pretty volatile, with plenty of government data, earnings announcements, and Fed action to push markets to and fro. Many traders are paying special attention to the GDP announcement Wednesday morning and the FOMC news later that afternoon. As is our wont, we advise taking off some risk ahead of Fed meetings. Markets were very quiet until the last forty-five minutes today, trading on very light volume, and the S&P 500 emini futures weren’t able to…

Indecision is a Decision

Thursday, April 24, 2008

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Some quick thoughts tonight: 1. The VIX dipped below 20 intraday for the second time this year.  The 1-month VIX continues to head lower relative to the 3-month VXV, and the more stretched this ratio gets, the more bearish that reading is for stocks.  The funny thing about volatility readings is that they’ll tend to drift lower, and then spike up suddenly.  We’re due for a jump in the VIX – maybe not now, but soon. 2. Lots of resistance…

Monday Morning Readings

Monday, April 14, 2008

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Friday’s selloff obviously relieved any overbought conditions that may have persisted, so before the Monday open here are some Reversal Readings we’re keeping an eye on. Remember that we consider any reading above 95 to be well overbought and any reading under 5 very oversold. XLF – Financials – 0.39 EWA – Australia – 0.65 EWZ – Brazil – 6.22 IYR – Real Estate – 0.53 XLI – Industrials – 3.4 PHO – Water –…

Bonus Trades: Long Financials, Short Energy

Thursday, April 10, 2008

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These are very short term overbought/oversold technical plays only. Energy (XLE) Thesis: The Energy ETF is well overbought on a short-term basis – practically maxed out at 99.98, and the implied volatility relative to its historical volatility over the past 21 sessions is also giving a sell signal. Trade: Buy buy buy lots of naked puts!  Just kidding.  The XLE April 80/82 call vertical is selling for about $0.60. There are only 8 days left until April expiration if things…

Market Melts Up

Tuesday, April 1, 2008

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In a viable, vibrant bull market working alongside a healthy economy, are 400 point rallies like this one really needed? Volume today? Shrug. Nothing to write home about. Volume in IWM and QQQQ was particularly average; the biggest volume was in the Dow, which, as you may recall, is still composed of just 30 stocks. The biggest Dow gainers today, unsurprisingly, were AIG (+8%) AXP (+7%) C (+11%) and JPM (+9%). As nice as this rally was, only QQQQ…

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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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