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Get timely market analysis, perspectives and trading ideas from TraderPlanet contributors to stay informed of global economic developments, financial market insights and other factors that may influence investment decisions and strategies.

There is Something “Skewy” Going on Here

There is Something “Skewy” Going on Here

I have recently focused on the options-skew index as a tool to help me define overbought/oversold markets.  It is not the most conventional or even cleanest tool, since we’re talking about outlier trades.  By definition, the options-skew index measures the tail risk of the SPX 500 basically over 30 days.  Traders who add to the skew are looking for outlier moves of 2-3 standard deviations,...

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Day Trading Is Hard Enough

Day Trading Is Hard Enough

Day trading is tough enough as it is. Don't make things harder on yourself when you are using options. There are a number of things you must concern yourself with if you are going to employ this methodology, but three are key – liquidity, delta, and theta. I hear many "options professionals" tell their clients to just trade in-the-money options, as they offer a lot more leverage than going...

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Why Traders Fail

There’s one main reason the vast majority of traders fail – they are undercapitalized. Why should capitalization matter so much? SCARED MONEY Because, as I recently discussed, our attitudes toward money are anything but neutral. Undercapitalization means you are likely trading with “Scared Money,” which will trigger a host of underlying psychological issues. Specifically, monetary...

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SPX: The Fed To The Rescue … Again

SPX: The Fed To The Rescue … Again

The S&P 500 mini futures (ESH5) got the oversold bounce we were predicting yesterday, thanks to what has become the “new normal” – an unofficial and sometimes covert intervention from the Federal Reserve anytime the market shows signs of faltering. Yesterday it was a closed-door presentation by Fed Chair Janet Yellen to a group of congressional Democrats indicating that there will be no...

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Futures Market Review and Forecast: 2027 is Key Pivot Level

Futures Market Review and Forecast: 2027 is Key Pivot Level

On Thursday, the S&P futures bounced nicely off the first target at 1984. The bounce was strong enough to shoot price near the now familiar 2027 level, which is now operating like a pivot during this consolidation.  2027 is now key resistance. A move above 2027 that holds for more than an hour is likely to be significant…. meaning the end of the correction. A Note on Volume Profile The...

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A Fan of Volatility? Think March E-Mini S&P 500

A Fan of Volatility? Think March E-Mini S&P 500

If you are a fan of volatility and wild rides in the markets, you are probably enjoying the first month of trading for 2015. Central Banks around the globe have made things interesting, as some of their decisions have sent secondary markets into frenzy. Crude oil continues to grab attention, and it has consumers and investors both asking, “How low can it go? “ In the Eurozone, we started off...

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Could AutoNation Be A Target Of Soros?

Could AutoNation Be A Target Of Soros?

On January 25th, CNBC’s Phil LaBeau reported that representatives of the Soros Management Fund (run by billionaire George Soros) were in California to attend the National Automobile Dealers Association’s annual meeting and they spoke with car dealer owners about possible deals. If Soros does decide to take a stake or acquire an entire dealership, this would follow Warren Buffett’s purchase...

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Futures Market Review and Forecast: Three Downside Targets

Futures Market Review and Forecast: Three Downside Targets

As I noted yesterday, “another move below the Floor increases the odds of much lower prices (1984 and then 1962).”   The Floor support at 2027 was tested for several hours on Wednesday, but turned into resistance after the FOMC announcement. This puts three levels in play to the downside: 1984, 1963 and 1842. A Note on Volume Profile The histogram on the left side of the chart shows the...

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ESH5: S&P Mini Futures Bust Support, Crash, And Burn

ESH5: S&P Mini Futures Bust Support, Crash, And Burn

Early Wednesday morning, we were leaning long on the S&P500 mini futures (ESH5), hitching our wagon to modestly hopeful technical indicators. The futures didn't fall out of bed in the overnight trading, and the ESH5 clawed back up to the 20/40-day moving average line from the previous day's decline. No real strength, but enough to dull the fear and encourage the greed. By the end of the...

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Soy Bean Counting Toward A Reversal To The Upside

Soy Bean Counting Toward A Reversal To The Upside

Since the release of the January 12th crop report, soy beans have dropped over .85 cents.  The key question is, how much more down side risk is there left?  There is a series of underlining fundamentals that could have both a bullish and bearish effect on the market.  On the bearish side, the trade believes that the late March planting intentions report will show 5% more soybeans will be...

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