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Showing Posts 1 - 15 out of 174 found.

High-Speed Panic Does Not Negate Earnings

Canada, New York, and Mali all are making the market news cycle. Ebola and terrorism, or, rather, what many are thinking is terrorism, but what just me a local nutcase.   The market did react when the news of the Canadian parliament shooting came across the wire on Wednesday and it reacted this morning to the news that both New York and Mali had their firs Ebola victims. To some degree, all...

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Options 101: How To Construct A Directional Play

Options 101: How To Construct A Directional Play

When I identify an opportunity for a directional play, how do I decide: a) what type of trade I want to do and b) what strikes do I want to use?  Typically, with a directional play, I look for some sort of vertical.  This lowers my cost basis (granted it caps my potential profit).  But most importantly, I attempt to "target" a specific strike.  I do this by "triangulating" a few...

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Skew: Did Option Players Get The Sell-Off Right This Time?

Skew: Did Option Players Get The Sell-Off Right This Time?

If you want to figure out the next move the markets will make, I have a secret to tell you about. Option traders have a trick that most investors and traders have never heard of, let alone understand. It is a little thing called skew, which is a real time view of where money is being bet. (In technical terms, skew is "the risk associated with an increase in the probability of outlier...

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More of the Same But Different?

Let’s start today by going back to yesterday, another in a series of volatile days. I think the market took my advice a bit too seriously, as all the major indices dropped with gusto. I am not sure why, but it seems the buyers simply ran out of gas. Stocks took on some water today, but it can't be a complete surprise. I think it was yesterday we pointed out the S&P 500 had rallied more...

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Define Risk On Crude Oil Play With Options

Define Risk On Crude Oil Play With Options

The markets have calmed down a bit from last week, but there is still a cloud of uncertainty hanging overhead. The equity markets have done quite a job of getting back most of the recent sell off. Last week the S&P 500 had a nearly 120 point range from Monday to Thursday, with a 50 point range on Thursday alone. The market closed up 30 points from the low on Thursday, which may have...

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10 Facts About The Facebook Chart

10 Facts About The Facebook Chart

If you’re like me, you are probably on Facebook (FB) often checking updates on friends and family. FB is an incredibly fun stock to trade. It is quite volatile and in my opinion, has some serious moves left in it.  Here are 10 facts about the FB chart. #1 On October 22, 2014 FB made an all-time high of $79.85. #2 The $79 price range is where FB experienced some strong selling pressure just...

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Silver versus Gold

Silver/Gold ETFs Ratio (SLV/GLD) fell below its lows of the previous 5 years on 10/22/14, thereby reconfirming its preexisting downtrend. The trend of SLV/GLD has pointed down most of the time since it peaked on 4/28/11, and Silver continues to underperform Gold. The S&P 500 Composite Index (SPX: 1,927.11, down 0.73%) reversed direction to the downside on Wednesday after rising 4...

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Remember Our Lessons Already Learned

Ahhhh …. Life is normal again, and it feels right. In today’s sense of normalcy, a learned lesson or two in life resides. One of those is familiar to me from repetition in my childhood and the other I am just starting to learn through repetition. Yesterday, I just “relearned” the latter. My computer is working. Yup, the same one I gave up on yesterday is the same one I fixed yesterday. I...

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Trading Psychology: Stay Calm When The Fastballs Fly

Trading Psychology: Stay Calm When The Fastballs Fly

A client of mine sent me a bio yesterday on Rod Dedeaux, who was the baseball coach for USC for 45 seasons. Dedeaux was a legendary leader, chalking up more national titles and wins (1332) than any other coach of his day. 200 of his players went on to play professional ball. Dedeaux neither lost his temper nor disrespected or denigrated anyone. He cultivated the ability to befriend,...

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Don't Get Trapped By Stop Hunters: How To Survive The Head Fake

Don't Get Trapped By Stop Hunters: How To Survive The Head Fake

Have you ever been in a trade that was a textbook setup and you thought you landed a great trade when all of a sudden it hit your stop, took you out and then it worked and hit your target?   I am sure you felt a bit of unsettled emotions as this played out before you on your trading screens at your desk.  As a trader you have to get smarter and learn from these little tricks the big boys do...

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Alibaba: Look For The "Shake And Bake" Setup

Alibaba: Look For The "Shake And Bake" Setup

It was "the" IPO to own this year.You know how you get those "Oriental Trading" magazines in the mail? Where you can buy 250 bouncy balls for 5 bucks?Alibaba is like that, except on a massive scale.And after all that IPO hype, the stock ran from 100 the first day it traded and has fallen into a range since.This chart is a classic IPO base and break pattern. 90 is an obvious level that if...

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U.S. Stocks: The 4-day Trend Is Clearly Pointing Up, But...

The S&P 500 Composite Index (SPX: 1,941.28, up 1.98%) rose for the 4th consecutive trading day and finished above its closing prices of the previous 8 trading days on Tuesday. SPX now has recovered most of its loss from 9/19/14 to 10/15/14. SPX crossed above its 200-day SMA but remains below its 50-day SMA, now at 1,966.81. The 4-day trend is clearly pointing up, but the larger trends...

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Is This Back to the Future?

My computer world is not any better today than it was yesterday, but I feel better. I did what I could do for my laptop, but it is in a coma. It will require equipment and knowledge beyond my scope to bring it around. Given that I am away from my hometown, I will keep it on life-support until I return. No worries; it is stable enough to wait three more days. In the meantime, I said I feel...

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Earnings Play: VMWare Inc. Poised For Big Move

Earnings Play: VMWare Inc. Poised For Big Move

VMWare Inc. (VMW) is scheduled to report earnings after Tuesday’s closing bell.  Headquartered in Palo Alto, CA, this company specializes in cloud and software virtualization services.  VMW Share are down slightly over 2% in 2014, but are off nearly 21% from their April 1 high of $111.83.  The stock has traded in a 52-week range of $76.51-$112.89.Analysts are calling $1.5 billion in revenue...

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S&P 500: Use Past Patterns To Predict Future Market Moves

S&P 500: Use Past Patterns To Predict Future Market Moves

Humans are creatures of habit and that is why history will almost always repeat at some time in the future. The same holds true for our financial system as well as the stock market. I have always been a big “fractal pattern” believer and do a lot of my research for future direction, based off of a similar pattern that has happened in the past. History will mimic, but not repeat exactly for...

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