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Spotting Unusual Options Activity In Avanir

Spotting Unusual Options Activity In Avanir

Monday saw shares of Avanir Pharmaceuticals (AVNR) soar on positives news from a mid-stage study on the company’s new Alzheimer’s drug AVP-923.  Shares climbed $5.24 (nearly 80%) on the news. Unusual Options Activity At least one trader anticipated positive news from the study.  Monday morning at between 9:38 and 9:39 am EST saw a trader come in buy 650 AVNR Sep 10 Calls for $0.39.  Less than 10 seconds later, another 1,245 contracts in the same line were purchased.  What Does This Mean?...

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Gold Update: Downtrend Still Looks Good

Gold Update: Downtrend Still Looks Good

On September 2 I wrote about an attractive short scenario in gold associated with a breakdown from a large symmetrical triangle formation. That breakdown ended up being pretty decisive. The evidence favors further downside ahead. Technical Outlook Specifically, in addition to the poor price structure, I'm looking at weekly momentum. Take a look at RSI averages at the bottom of the accompanying chart. The slow average (orange) stalled around the 50 midline in April. In the past two weeks,...

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Sixth Anniversary Of Lehman Collapse: Time To Watch Financials

Sixth Anniversary Of Lehman Collapse: Time To Watch Financials

This month marks the sixth year after Lehman Brothers filed for Chapter 11, an act that served as a precursor to market meltdown of October 2008.   Six years later, and despite the amazing recovery for the general market since the market bottomed in 2009, the financials as a sector continues to lag.  Figure 1, the 10-year PerfChart for the S&P Sector ETFs, depicts the Financials (brown) relative weakness during a decade plagued by low interest rates that created an environment for risk...

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Beyond All Doubt: The Stock Market High Is In

Beyond All Doubt: The Stock Market High Is In

I have two pieces of good news this week (for bears). 1.    You will never again have to read about how the 2011 sideways movement has caused confusion over from which date to count the last basic advance in the 2009 bull market.2.    Even if the sideways movement confusion had not been resolved previously, time has taken care of the any lingering uncertainties.[Editor's note: Read Carlson's related analysis: A Top Is Near Or Here: 6-Month Cycle Highs In The S&P 500.] The last several...

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What Is The VIX Saying Now?

What Is The VIX Saying Now?

The chart below is a long-term look at volatility (the VIX, red line).  The current low VIX readings are similar to the period of low VIX over the years of 2005, 2006, and into the beginning of 2007, which saw the S&P 500 index move from the 1200 level to north of 1500, a 25% gain (black line).   The picture in VIX continues to suggest that the current bull trend remains in force.The last period of sustained low VIX (2005 - 07) preceded our last financial crisis but it is worth noting...

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S&P 500: Beware The Ides Of September

S&P 500: Beware The Ides Of September

There is a scene in Shakespeare's play, Julius Caesar, where Caesar, while walking to the Senate and his eventual assassination, is warned by a soothsayer in the street: “Beware the Ides of March.” Caesar is uneasy, but ignores the warning – and is unexpectedly ambushed.It feels like something similar is happening to the stock markets. Traders are uneasy. The sharp decline in the S&P 500 index (SPX) on Friday (Sept. 12) and the further decline over the weekend looked like everybody...

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COT Data: What Can You Learn From Small Speculators?

COT Data: What Can You Learn From Small Speculators?

I’ve been working with the CFTC’s Commitment of Traders’ Data for many years and the most consistent results have typically been following in the commercial traders’ footpaths. This is exactly what Larry Williams refers to when he talks about, “trading with the elephants.” Trading system design comes from finding a fundamental premise about the markets and testing it going forward. I am aware of the neural network argument that implies that the models they find are beyond our abilities to...

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Scottish Secession: Look For Buying Opportunities On Any Pullbacks

Scottish Secession: Look For Buying Opportunities On Any Pullbacks

We are officially in uncharted waters.  The biggest macro risk right now for the markets is not the Fed or European Central Bank…or ISIS or even Vladimir Putin.  No, the biggest macro risk is the mood of Scottish voters. Scotland’s referendum on independence from the UK will be held on September 18.  Up until very recently, the polls of prospective voters consistently predicting that the “no” camp—i.e. Scots that prefer to remain in the UK—would win by a fairly substantial margin.  But a...

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Respect The Risk Management Gods

Respect The Risk Management Gods

Every now and then I find traders will go out on the risk curve and take a speculative trade.   That's a good thing — because as they say in baseball, 'you cannot steal second base with your foot on first.'  However, there are limits, and often I find these traders stretch too far and they soon find themselves wounded - sometimes a devastating blow that is nearly impossible to overcome.  How can you avoid such a calamity? We must always consider good risk management techniques when trading...

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Advanced Options: Buy A Strangle Swap Wynn Resorts

Advanced Options: Buy A Strangle Swap Wynn Resorts

When I think that a stock has "settled in" (established a trading range) my first instinct is to sell a straddle or a strangle or something along those lines.  The problem is this involves theoretical unlimited risk and therefore causes a big margin issue for most of my students.  Are we just out of luck?  Certainly not!  In the past, I have showed how we can sell an iron condor or iron butterfly, but often that doesn't afford us much reward for the risk.  But, if I can identify a stock...

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A Game Plan For Trading Stocks In The Fourth Quarter: Window Dressing

A Game Plan For Trading Stocks In The Fourth Quarter: Window Dressing

Get ready for the most active season in the stock market. The last quarter has the highest trading activity of the year for the stock market and for the market in general.Here are some of the major events that traders are ready to speculate upon heading into the fourth quarter:1.    Last earning season of the year – main reason why market will accelerate its action into the year end2.    Black Friday / Cyber Monday so-called Cornucopia Trading 3.    Christmas Rally4.    Quarterly...

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Time To Manage Risk: E-Mini S&P Option Play

Time To Manage Risk: E-Mini S&P Option Play

I don’t need to remind anyone of the significance of this day. The trading world was heavily affected by the events that took place thirteen years ago. Things will never be the same, but we have to continue to move forward.  Please remember those we lost and the families that continue their journey forward without them. Economic Outlook All of the sudden the confidence in the slow but steady economic is shaken a bit. Last week’s Employment Situation numbers for August came in much lower...

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Finding the Big Moves in Forex with VantagePoint and ...

Finding the Big Moves in Forex with VantagePoint and ...

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The OptionHacker Trading Plan for Day and Swing Trading ...

The OptionHacker Trading Plan for Day and Swing Trading ...

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The OptionHacker Trading Plan for Day and Swing Trading ...

The OptionHacker Trading Plan for Day and Swing Trading ...

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Trading Credit Spreads in Volatile Markets

Trading Credit Spreads in Volatile Markets

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