#CBOE PUT/CALL Ratio

[blockinsider]

Crypto Market Tense: $5 Billion in Bitcoin and Ethereum Options Set to Expire Today

Key Points

Approximately $5.01 billion in Bitcoin and Ethereum options contracts are set to expire today, August 30.

This massive expiration event could significantly affect short-term price movements of these digital assets.

Today, the crypto market is bracing for a significant event: the expiration of about $5.01 billion in Bitcoin (BTC) and Ethereum (ETH) options contracts.

This expiration could have a substantial impact on the short-term price movements of these leading cryptocurrencies, which have already experienced some declines recently.

Market Activity Prior to Expiration

Today’s options expiration involves $3.67 billion in Bitcoin and $1.36 billion in Ethereum. This is a significant rise from previous weeks. According to data from Deribit, Bitcoin options expiring today amount to 61,793 contracts, a substantial increase from 18,440 contracts last week. Ethereum options are also seeing a significant boost, with 538,872 contracts expiring compared to 141,410 contracts from the previous week.

The expiration of these options could lead to increased market activity and volatility due to the large volume of contracts. The “maximum pain” price, where most options expire worthless, is at $61,000 for Bitcoin and $2,800 for Ethereum. This price level often influences market movements as the expiration date nears, potentially affecting trading strategies.

Market Sentiment and Indicators

The current put-to-call ratios for Bitcoin and Ethereum options are below 1, standing at 0.59 and 0.49, respectively. These ratios suggest a more bullish sentiment among traders, indicating that more are betting on price increases rather than declines. However, this optimism is tempered by recent market behavior.

Analysts from Greeks.live have observed a minor rise in implied volatility (IV) for both Bitcoin and Ethereum, attributed to recent price declines and external factors like Nvidia’s earnings report. Despite the increased IV, realized volatility (RV) for Bitcoin has significantly dropped, from a high of 100% earlier this month to around 40% now. This decline in RV suggests that while traders expect some short-term fluctuations, the overall market is settling into a less volatile phase.

Immediate Effects and Future Outlook

The immediate aftermath of today’s options expiration could set the tone for the next phase in the market. While some traders might be preparing for a stabilization period, others are positioning themselves for potential price movements.

Looking ahead, the expiration of these options could lead to temporary volatility, but the market usually finds a new equilibrium after such events. Some analysts suggest that stablecoins could play a crucial role during these periods of uncertainty, providing a safe harbor or a quick means to move funds.

Furthermore, recent developments in cryptocurrency ETFs, such as the amended application by Cboe Exchange to list options on Bitcoin and Ethereum ETFs, indicate that institutional interest is growing. This could further shape the volatility and stability of the market in the coming months, as more financial products linked to cryptocurrencies gain traction.

[tradestockmrkts]

Understanding Market Sentiment: How it Impacts Trading

Navigating the Markets Through the Lens of Sentiment By Amir Shayan In the fast-paced world of financial markets, understanding market sentiment is often the key to success. Market sentiment, also known as investor sentiment or market psychology, refers to the overall attitude of traders and investors toward a particular asset, market, or financial instrument. This sentiment is shaped by a wide range of factors, including economic indicators, news events, geopolitical developments, and even psychological biases. In this comprehensive guide, we will explore the intricacies of market sentiment, how it influences trading decisions, and strategies to navigate its impact effectively.

Table of Contents

- Introduction - What is Market Sentiment? - The Role of Fear and Greed - Sources of Market Sentiment - Measuring Market Sentiment - Bullish Market Sentiment - Bearish Market Sentiment - Impact of Market Sentiment on Trading - Sentiment Analysis and Trading Strategies - Combining Fundamental and Technical Analysis - Risk Management in the Face of Sentiment - Psychology and Sentiment: Mastering Emotional Discipline - Real-World Examples of Market Sentiment Shifts - Conclusion Introduction Trading in financial markets is often a delicate dance between cold, hard data and the intricate web of human emotions. Market sentiment encapsulates the emotional aspect, representing the prevailing attitudes of market participants. Successful traders recognize that while numbers and charts offer valuable insights, understanding the collective mindset of investors can provide a crucial edge. What is Market Sentiment? Market sentiment can be described as the overall feeling or attitude of traders and investors towards a specific market or asset. It is the aggregate of individual emotions and opinions, resulting in a broader market mood. This sentiment can be bullish, bearish, or even neutral, and it can change rapidly in response to new information or events. The Role of Fear and Greed Two primary emotions, fear and greed, play a substantial role in shaping market sentiment. Fear can lead to panic selling during market downturns, causing prices to plummet. On the other hand, greed can drive irrational exuberance and overvaluation during bull markets. Sources of Market Sentiment Market sentiment is influenced by a wide range of sources, including economic indicators (GDP, employment data, etc.), geopolitical events (wars, elections, trade agreements), and corporate news (earnings reports, product launches). Social media and financial news outlets also contribute significantly to shaping sentiment. Measuring Market Sentiment Several tools and indicators can help measure market sentiment. The CBOE Volatility Index (VIX), also known as the fear index, gauges market expectations of volatility. The Put/Call Ratio measures the ratio of bearish put options to bullish call options, providing insight into investor sentiment. Bullish Market Sentiment Bullish sentiment prevails when traders are optimistic about the market's future direction. This often leads to rising prices as buying activity increases. Bull markets are characterized by prolonged periods of positive sentiment. Bearish Market Sentiment Conversely, bearish sentiment occurs when traders expect market prices to decline. This pessimism can lead to prolonged selling, causing market downturns. Bear markets are associated with extended periods of negative sentiment. Impact of Market Sentiment on Trading Market sentiment can have a significant impact on trading decisions. Traders often use sentiment analysis to confirm or challenge their fundamental and technical analyses. When sentiment aligns with other analyses, it can provide greater confidence in a trade. Sentiment Analysis and Trading Strategies Sentiment analysis involves studying various indicators to assess market sentiment accurately. Some traders use sentiment as a contrarian indicator, going against the prevailing sentiment when it becomes overly extreme. Others combine sentiment with technical patterns for more well-rounded strategies. Combining Fundamental and Technical Analysis Effective traders often integrate sentiment analysis with fundamental and technical analyses. For instance, if fundamental data indicates strong growth, and technical analysis suggests a bullish trend, positive sentiment could provide an added layer of confirmation. Risk Management in the Face of Sentiment While sentiment analysis is a valuable tool, relying solely on sentiment can be risky. Traders must still apply proper risk management strategies and not become overly influenced by short-term shifts in sentiment. Psychology and Sentiment: Mastering Emotional Discipline Successful trading requires emotional discipline. Traders must learn to manage their emotions and avoid making impulsive decisions solely based on sentiment shifts. Real-World Examples of Market Sentiment Shifts Examining historical events and their impact on sentiment can provide valuable insights. For example, the 2008 financial crisis drastically shifted sentiment, leading to a bearish market. Conclusion Understanding market sentiment is a skill that takes time to develop. Traders who can navigate the complex interplay between emotions and data are better equipped to make informed decisions, enhancing their chances of success in the dynamic world of trading. In conclusion, market sentiment is a multifaceted aspect of trading that holds substantial power. While mastering it might be challenging, gaining insights into the emotions that move markets can significantly elevate a trader's capabilities. By delving into the realm of market sentiment, traders can refine their strategies, improve their decision-making processes, and ultimately navigate the markets with a heightened sense of awareness and confidence. Read the full article

[megaalexmark]

Gap Between VIX Put-Call Volume And CBOE Put-Call Ratio Is Widest Since 2006, Precursor To Major Volatility Spike (The Deregulation That Buttiegieg Blamed Trump For Would NOT Have Prevented The East Palestine Ohio Train Derailment)

https://www.investmentwatchblog.com/gap-between-vix-put-call-volume-and-cboe-put-call-ratio-is-widest-since-2006-precursor-to-major-volatility-spike-the-deregulation-that-buttiegieg-blamed-trump-for-would-not-have-prevented-the-east-p/?utm_source=dlvr.it&utm_medium=tumblr

[jeffhirsch]

Diverging Breadth and Frothy Sentiment

Today’s selloff did not catch the Advance/Decline Line off guard. As you can see in the chart above, as the S&P 500 and NASDAQ logged minor new highs yesterday and DJIA did last Friday, market breadth has been diverging. NYSE Composite and S&P 500 breadth have flat-lined over the past week while Russell 2000 and NASDAQ breadth turned clearly lower. This indicates a market running out of gas as advancing issues are unable to outpace decliners and in the case of the NAS and R2K decliners have been beating out advancers over the past week.

This bad breadth scenario comes at the outset of the seasonally weakest time of the year from mid-July through October – AKA the “Worst Four Months.” In addition, bullish sentiment had reached dangerous levels in the face of a dearth of bears. The chart below courtesy of the venerable Investors Intelligence U.S. Advisors Sentiment Report shows the difference of the Bullish Advisors % less the Bearish Advisors %. When this gets above 40 it’s a warning sign and with 60.8% Bulls and 15.5% bears the difference is now 45.3%.

The weekly CBOE Equity-Only Put/Call ratio tracked in Barron’s “Market Lab that we have followed for years, has also reached extremely complacent levels lately. Put/Call retreated from the modest fear level of 0.59 at the May lows back down to 0.41 the first two weeks of June and logging 0.43 and 0.44 the past two weeks. We have been getting defensive and in a neutral posture since our April 22 Best Six Months Seasonal MACD Sell Signal for S&P 500 and DJIA and have been preparing for our MACD Sell Signal for NASDAQ’s Best 8 Months which appears imminent.

[laughawayeternity]

1 options trading course Louisiana Learn them all at your own pace to enhance upon and build your options trading system.

Overview

1 options trading course Louisiana The system can be based on any type of option strategy and includes both fundamental and technical analysis.

trading options for a living Louisiana Zero in on the key factors that make up a winning trade and try to fine tune your criteria to enhance your executions.

trading options master course ebook pdf Louisiana If an options trading system was like a tic-tac-toe system, then we would all be wealthy.

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best options trading course review Louisiana Knowing the ins and outs of various trade setups is useless if you don't have a trading methodology that guides you in every step of the trade process.

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options trading ideas Louisiana I was shocked to find that there was barely anything posted on the subject.

1 options trading course Louisiana There are a several ways to profit in any kind of market condition from trending to range bound.

An option trading system that is worth its salt will help you weed out false signals and build your confidence in entries and exits. How Important is an Options Trading System?The options market is very complex. Trading options without a system is like building a house without a blueprint. Volatility, time and stock movement can all affect your profitability. You need to be cognizant of each of these variables. It is easy to be swayed by emotion when the market is moving. Having a system helps to control your reaction to those very natural and normal emotions. How often have you sat and watched a trade lose money the instant your buy order filled? Or, have you ever watched a stock skyrocket in price while you are pondering over whether or not to buy it? Having a structured plan in place is crucial to make sound and objective trading decisions. By creating and following a good system, you can hone your trading executions to be as emotionless and automatic as a computer. Advantages of an Options Trading SystemLeverage - Trading options gives your account leverage on the stock market. With options, you can control hundreds or thousands of shares of stock at a fraction of the price of the stock itself. A five to ten percent change in the price of a stock can equate to a gain of one hundred percent or more in an option. Try to focus on percentage gains versus dollar amount gains in your trading. It requires a fundamental shift in conventional thinking, but it is crucial to managing a successful trading system. Objectivity - A good options trading system is based on measurable criteria that trigger buy and sell signals. It takes the subjectivity and second guessing out of your trading so you can focus on preset factors that make for an explosive trade. Flexibility - Nearly all options traders will tell you that options allow for flexibility in your trading. Opportunities in the options market make it incredibly easy to profit from short-term positions. With earnings events and weekly options, you can build strategies for overnight gains with clearly defined risk. There are a several ways to profit in any kind of market condition from trending to range bound. Protection - An options trading system based on the appropriate strategy for prevailing market conditions can act as a hedge against other investments. Protective puts are commonly used this way. Risk - A good options trading system limits risk in two important ways. The first way is cost. The price of options is very low compared to buying the same amount of stock. The second way is related to stops.

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options trading alerts Louisiana Advantages of an Options Trading SystemLeverage - Trading options gives your account leverage on the stock market.

I was shocked to find that there was barely anything posted on the subject.

profiting from weekly options how to earn consistent income trading weekly option serials Louisiana If you are trading actively, then a weekly or monthly review is important.

You can employ call spreads and put spreads to trade directional movements with a buffered risk, and profit. You can sell or purchase spreads to receive the credit of the premium decay by options expiration. You can trade straddles and strangles if you expect a big move but are not sure in which direction. You can also get into ratio back spreads, condors, and butterflies. And if you're really feeling crazy you can sell 'naked' options (just better use a stop loss or you'll end up like one of my old trading buddies who ran an account to $20 million then gave it all back selling naked options. ) You can go to cboe. com for more information on options trading. Directional options trading systems are the best. Keep it simple, buy calls for and upside trade or buy puts for a downside trade. But this means you need a directional stock trading system in order to trade directional options. Here are a couple of different approaches for directional systems:Develop an options trading systems that trades the swings in stock price movement. There are many good swing trading systems available today. We suggest you obtain one. Bottom line with swing trading is that you want to swing trade with the trend. Options brokers these days have advanced order technology that will allow you to enter swing trades based on the price movement of the stock so you don't have to watch this stock all day. That huge advancement to swing trading options. Swing trade the day bars. Most swing trading systems are based on daily bars on the stock price chart. Swing trade the Intra Day Bars! Their other fantastic systems based on intraday charts that pin point swing trading entries. Develop an options trading system that trades three to six month trends. This is where the big money is. Trading the large trends is where many are able to place larger sums of money to develop their net worth. Develop an options trading system that trades pivot points. Pivot point trading is arguably the best way to trade options, because price action usually is explosive, and happens quickly in our direction when a trade works. This is good because you can use shorter-term options and leverage yourself a little better. And it's also nice you can make great gains in five days to four weeks on average so time decay issues become less of a worry. There are many different directional trading methods you could use to trade options.

trading as a business options video course Louisiana Success in options trading requires a consistent approach for long-term success.

By acknowledging your blind spots and making adjustments, you can keep your system in line with changing market trends and conditions. It sounds so simple, but it requires perseverance and discipline. Learn - A trading system is not static. Keep your mind active by always learning. The more you study the stock market and options trading system, the more you will know and the better off you will be. If an options trading system was like a tic-tac-toe system, then we would all be wealthy.

options trading dvd course Louisiana Begin with a basic system and tweak it to define your trading criteria and hone your system.

Be sure to include what the underlying stock price was at the time of your option purchase or sale.

Knowing the ins and outs of various trade setups is useless if you don't have a trading methodology that guides you in every step of the trade process. A solid trading method holds you by the hand and defines each step while leading you to being a consistent winner in the markets and a profitable trader when all is said and done. Finally, the fifth and final key to successfully trading stock options is yourself, particularly your trading psychology. Human beings and there mental makeup are extremely complex so it is extremely important that stock option traders not only have a sound stock option trading methodology but the discipline to follow their trading methods. You can give two people the same exact winning trading system but it is very common for them to have different results. Invariably, the one that has the ability to remain as detached from his losing trades as well as his winning trades while maintaining the discipline to follow the system's rules no matter the trading result will emerge the greatest winner in the end. Using these five keys as a basis to develop your stock option trading methodology can help you avoid the mistakes and pitfalls of many beginning option traders. By understanding time decay, factoring an option's time into your trading method, how volatility impacts a stock option's value, what defines a reliable stock option trading methodology, and your own trading psychology you now have a foundation to develop into a winning stock option trader. Finding Or Creating Your Own Options Trading System That WorksStock Options are wonderful! This clever derivative of the equities market has to be one of the most ingenious inventions of modern times. For the trader who can learn how to win at trading options there are many luxuries in life that can be experienced. Success in options trading requires a consistent approach for long-term success.

options trading companies Louisiana That is part of the business of trading.

Buying calls and puts is the easiest way to get started. As you learn and experience more about how prices move, you can add new strategies to your trading to enhance your system. Adding covered calls and protective puts to long equity positions is a logical next step and can supercharge your account by generating monthly or weekly cash flow. Trade - Once you have defined the basics of your strategy, it is time to trade. Start small, one or two contracts, and keep detailed records of your transactions. Be sure to include what the underlying stock price was at the time of your option purchase or sale. Your records will help you analyze how you are doing and where you can improve. When you add new trading criteria to your system, you should be able to see an improvement to your statistics. If you do not, it is time to reassess your defined criteria. Evaluate - Evaluate your successes and failures. The frequency of your analysis will depend on how much you are trading. If you are trading actively, then a weekly or monthly review is important. Compare your losses with your winnings. Zero in on the key factors that make up a winning trade and try to fine tune your criteria to enhance your executions. As painful as it may be, analyze your mistakes, too. Fine tune your criteria to eliminate making those same mistakes again. Analyzing your mistakes is just as, if not more, important as studying your successful trades. Adjust - When you have a losing streak or spot a potential weak area in your option trading system, adjust it. There is no shame in being wrong. That is part of the business of trading. The shame is in being blind to your mistakes and repeating them. By feeding your ego and justifying your weakness with excuses, you are guaranteed to fail in trading. By acknowledging your blind spots and making adjustments, you can keep your system in line with changing market trends and conditions. It sounds so simple, but it requires perseverance and discipline. Learn - A trading system is not static. Keep your mind active by always learning. The more you study the stock market and options trading system, the more you will know and the better off you will be. If an options trading system was like a tic-tac-toe system, then we would all be wealthy. Thankfully, options trading is not as boring as a child's game. Learn something new every day and absorb it into your options trading system. I do.

trading options for dummies Louisiana As painful as it may be, analyze your mistakes, too.

There are a several ways to profit in any kind of market condition from trending to range bound. Protection - An options trading system based on the appropriate strategy for prevailing market conditions can act as a hedge against other investments. Protective puts are commonly used this way. Risk - A good options trading system limits risk in two important ways. The first way is cost. The price of options is very low compared to buying the same amount of stock. The second way is related to stops. A good system will cut losses quickly and keep them small. Any Option Trader Can Develop an Options Trading SystemAs a trader, it is important build a system that utilizes different types of option strategies-iron condors, broken wing butterflies, calendar spreads, back ratios, straddles, strangles, and collars. It might sound like a foreign language right now, but work on the vocabulary one lesson at a time. Break it down piece by piece and make it your own.

how do options trading work Louisiana Flexibility - Nearly all options traders will tell you that options allow for flexibility in your trading.

Essentially, it is a checklist of criteria that must be met before trades are entered. When all conditions are met, a signal to buy or sell is generated. The criteria are different for each type of option trading strategy. Whether it is long calls, covered calls, bear spreads, or selling naked index options, each has its own trading system model. An option trading system that is worth its salt will help you weed out false signals and build your confidence in entries and exits. How Important is an Options Trading System?The options market is very complex. Trading options without a system is like building a house without a blueprint. Volatility, time and stock movement can all affect your profitability. You need to be cognizant of each of these variables. It is easy to be swayed by emotion when the market is moving. Having a system helps to control your reaction to those very natural and normal emotions. How often have you sat and watched a trade lose money the instant your buy order filled? Or, have you ever watched a stock skyrocket in price while you are pondering over whether or not to buy it? Having a structured plan in place is crucial to make sound and objective trading decisions. By creating and following a good system, you can hone your trading executions to be as emotionless and automatic as a computer. Advantages of an Options Trading SystemLeverage - Trading options gives your account leverage on the stock market. With options, you can control hundreds or thousands of shares of stock at a fraction of the price of the stock itself. A five to ten percent change in the price of a stock can equate to a gain of one hundred percent or more in an option. Try to focus on percentage gains versus dollar amount gains in your trading. It requires a fundamental shift in conventional thinking, but it is crucial to managing a successful trading system. Objectivity - A good options trading system is based on measurable criteria that trigger buy and sell signals. It takes the subjectivity and second guessing out of your trading so you can focus on preset factors that make for an explosive trade. Flexibility - Nearly all options traders will tell you that options allow for flexibility in your trading. Opportunities in the options market make it incredibly easy to profit from short-term positions. With earnings events and weekly options, you can build strategies for overnight gains with clearly defined risk. There are a several ways to profit in any kind of market condition from trending to range bound. Protection - An options trading system based on the appropriate strategy for prevailing market conditions can act as a hedge against other investments. Protective puts are commonly used this way. Risk - A good options trading system limits risk in two important ways. The first way is cost. The price of options is very low compared to buying the same amount of stock. The second way is related to stops. A good system will cut losses quickly and keep them small.

Critical Methods:

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[jlfmi]

Options Traders Have Never Been So Complacent

The CBOE’s Equity Put:Call Ratio just registered the lowest reading on record.

Sentiment indicators can provide insight into the overall level of bullishness (i.e., greed, complacency, etc.) or bearishness (i.e., fear) in the market at a given time. When sentiment reaches an extreme in one direction or the other, the market becomes more susceptible to counter-trend move — and a rug-pull of the prevailing investor sentiment. We may be approaching such a condition based on data from the equity options market.

We prefer “real money” sentiment indicators as opposed to surveys as they reveal what traders are actually doing with their money. One example is an options put:call ratio. This indicator can measure trader bullishness (i.e., call volume) or bearishness (i.e., put volume) by the ratio of money going into either side. Currently, we can assume that bullishness among options traders is at an extreme based on the inordinate amount of money flowing into equity calls vs. puts on the CBOE. In fact, using a 10-day moving average, the CBOE Equity Put:Call Ratio just recorded the lowest reading (0.436) in the history of our database.

While this extreme reading may not necessarily mean the stock rally is over, it does suggest that further gains from here may be difficult to sustain — at least when looking historically at prior readings below even 0.485. Those 4 precedents going back to 2003 led to either an extended stagnation in the stock market (e.g., January 2004, January 2011) or an almost immediate and devastating decline (e.g., April 2010, January 2020).

As mentioned, this data point does not necessarily spell doom for the market. In fact, we would not consider it by itself to be a catalyst to a decline. However, should a catalyst present itself (or should the market merely begin to sell off), these conditions in the options market could exacerbate a potential decline. The reason being is that there is relatively very little hedging going on — and, thus, traders are exceedingly complacent and historically ill-prepared for a decline right now.

How much “stock” are we putting into this data point? How is it impacting out investment posture? If you’re interested in an “all-access” pass to all of our charts, research — and investment moves — please check out our site, The Lyons Share. You can follow our investment process and posture every day — including insights into what we’re looking to buy and sell and when. Thanks for reading!

_____________

Disclaimer: JLFMI’s actual investment decisions are based on our proprietary models. The conclusions based on the study in this letter may or may not be consistent with JLFMI’s actual investment posture at any given time. Additionally, the commentary provided here is for informational purposes only and should not be taken as a recommendation to invest in any specific securities or according to any specific methodologies. Proper due diligence should be performed before investing in any investment vehicle. There is a risk of loss involved in all investments.

[reveal-the-news]

Bearish bets are building in the stock market

Bearish bets are building in the stock market

Data: CBOE, FactSet; Chart: Axios Visual The market is actually up this month, but bearish bets are quickly forming. Big picture: A measure of sentiment in the options market shows that bets on falling stock prices have quickly outpaced those expecting their prices to rise. That measure, known as the CBOE US equity put/call ratio, hit the highest — or most bearish — level on record in recent…

[schaeffersresearch]

Zoom Video failed to meet revenue expectations and slashed its full-year forecast

[extreme-investor-network]

The S&P 500 may be finding a short-term bottom — but the intermediate worries remain

The S&P 500 would have to climb above 4300 to even hint at a change in the stock market’s downtrend The S&P 500 index is trying to put a short-term bottom in place, and it looks like it might succeed. Still, this would not be the end of the bear market, in my opinion. I say that because the S&P SPX, 1.44% chart is still in a downtrend. New lows were made this past week, so the pattern of lower highs and lower lows is still intact. By definition, that is a downtrend for SPX. The index would have to climb above resistance at 4300 to even hint at a trend change. Meanwhile, a short-term oversold rally is unfolding, which should be able to reach somewhere on the upside between the declining 20-day moving average (4050) and resistance at 4160. The oversold rally in late March, though, far exceeded those norms – rallying all the way to the upper “modified Bollinger Bands.”  As for the downside, the most recent probes downward found support in the 3800-3870 range. There should also be support near 3700, which was the low in both January and February 2021. LAWRENCE MCMILLAN Equity-only put-call ratios have generated buy signals, at least according to the computer programs that we use to analyze them. In addition, the weighted ratio’s chart has rolled over to the naked eye, confirming the buy signal. The standard ratio is less obvious, but it appears to have rolled over as well. These buy signals are coming from very high levels on their charts, meaning they had gotten extremely oversold – reflecting a lot of bearish opinions. That should make these strong, contrarian buy signals. They would be stopped if the ratios moved to new relative highs. LAWRENCE MCMILLAN LAWRENCE MCMILLAN Breadth has improved, too, and the breadth oscillators first gave buy signals on May 20. After some shaky action early this week, they have confirmed those buy signals. These are short-term indicators, so they can reverse quickly, but this is the first breadth buy signal that has survived more than two days since the one in the second half of March (which was quite successful). There has been improvement in the data of new 52-week highs vs. new 52-week lows, but it is still bearish at this point. The number of new lows has fallen dramatically, but that alone does not constitute a buy signal. We would need to see new highs exceed new lows and for new highs to be at least 100 in number. We use NYSE for that purpose, and a buy signal has not yet occurred. On Wednesday, there were 47 new highs and 82 new lows on the NYSE. The NASDAQ and “stocks only” data were much worse than that. So at this point, we still don’t have an NYSE-based buy signal from this indicator. VIX VIX, -3.00% has continued to languish near 30, never really spiking much higher on this last probe downward by the broad stock market. As a result, the VIX “spike peak” buy signal from May 11 is still in place (there was an additional, overlapping “spike peak” buy signal on May 19 as well). The negative part about the VIX chart, though, is that both VIX and its 20-day moving average are still well above the 200-day moving average (which is just below 23 and rising). This means that the VIX trend is still upward, and that is an intermediate-term negative for stocks. VIX would have to fall below the 200-day moving average in order to turn this indicator neutral (but that alone would still not be a buy signal from this indicator). This negative trend has been in force since late last November (pink circle on the accompanying VIX chart). A couple of times, the trend returned to neutral status (red boxes on the chart), but quickly went back to negative when VIX crossed back above the 200-day MA. LAWRENCE MCMILLAN The construct of volatility derivatives remains neutral. The term structure of the VIX futures is fairly flat between July and October, and the term structure of the CBOE Volatility Indices is mixed as well. The slightly bullish piece of data is that June VIX futures (the front month) continue to trade lower than the price of July VIX futures. If that were to invert, it would be bearish. In summary, the trends of SPX (down) and VIX (up) are still in place, and that is an intermediate worry for the stock market. But recent oversold conditions have now generated confirmed buy signals, so we are going to trade those around the “core” bearish position. New recommendation: SPY bull spread Based on the combination of new equity-only put-call ratio buy signals and breadth buy signals, we are going to add these SPY call bull spreads: Buy 2 SPY July (1st) at-the-money calls And sell 2 SPY July (1st) calls with a striking price 15 points higher We will keep this position in place as long as both of the indicators remain on buy signals. If either one falls back to a sell, we will exit half this position. If they both revert to selling, this position will be closed. New recommendation: Potential buy signal We continue to keep this recommendation open. In a weekly newsletter, it is difficult to lay out all the possibilities, especially in an extremely volatile market such as this one. But this recommendation’s conditions are easy to track, so we will go with a potential buy signal from the new highs vs. new lows indicator: IF NYSE new highs outnumber NYSE new lows for two consecutive days, And IF new highs are at least 100 in number of both of those days, THEN             Buy 1 SPY Jun (24th) at-the-money call             And sell 1 SPY Jun (24th) call with a striking price 13 points higher. If the trade is established, then stop yourself out if new lows outnumber new highs for two consecutive days. New recommendation: Electronic Arts Electronic Arts Inc (EA) options volume has been heavy, relative to average option volume levels as takeover speculation has intensified. Stock volume patterns are strongly positive and improving. There is support at 126.  Buy 2 EA June (17th) 137 calls at a price of 5.00 or less. We will hold without a stop for now. LAWRENCE MCMILLAN Follow-up action All stops are mental closing stops unless otherwise noted. We are going to implement a “standard” rolling procedure for our SPY spreads: in any vertical bull or bear spread, if the underlying hits the short strike, then roll the entire spread. That would be rolling up in the case of a call bull spread, or roll down in the case of a bear put spread. Stay in the same expiration, and keep the distance between the strikes the same unless otherwise instructed. Long 2 SPY June (17th) 389 puts and short 2 SPY June (17th) 364 puts: We originally bought this spread in line with the sell signal from the VIX trend. It was rolled down when SPY traded at 401 on May 9 and then rolled down and out at May expiration. This is our “core” bearish position. We will stop this position out if VIX falls below its 200-day moving average, which is currently rising toward 23. Long 0 MAT calls: This position was stopped out when Mattel MAT, 4.79% closed below 24 on May 19. Long 1 SPY June (17th) 392 call and short 1 June (17th) 412 calls: VIX confirmed a “spike peak” buy signal at the close of trading on May 12, and we bought this spread. Stop yourself out on a VIX close above 31.77 – the VIX closing price on the day the signal was confirmed. Long 3 BKI June (17th) 70 calls: Continue to hold while the spread in this deal remains wide. The deal is 63.20 + 0.2 * ICE, which is worth $82.70 with ICE trading at 97.52. Black Knight BKI, 0.32% is trading at 69.35, which is still very widespread. Long 5 MX Jun (17th) 20 calls: Continue to hold while the rumors play out. Original Article Here: Read the full article

[jeffhirsch]

Persistent Volatility Runs Into Resistance & Exuberant Sentiment

We have all been gobsmacked by velocity and strength of this V-shaped rally off the March 23 bear market low. For the record this rally became an official Ned Davis Research defined bull market on May 26 when DJIA was up 30% from the low when it made a new recovery high after 50 calendar days (see NDR definitions below). And this was on the back of the shortest bear market on record, which lasted only 40 days. Today’s market comeuppance is an important reminder that we need to be patient with this market and heed our cautious analysis and stance.

This is still the “Worst Six Months” and as we warned in the May Outlook when the market is down during the “Best Six Months” (November-April) as they were in 2020, the “Worst Six Months” (May-October) were down or flat 86% of the time with a median S&P decline of -6.7% since 1950.

Other seasonal indicators are also flashing the caution sign. This year’s negative January Barometer and breached December DJIA low, point to possible retests of the lows and choppy, volatile trading over the next several months. See the updated composite graph of the seasonal pattern for these 22 years since 1950 in the June Outlook.

It appears that quite a fair amount of hope was built into the rally. Lots of hope that everything is just going back to the way it was real soon. But COVID cases are on the climb again and folks are concerned that a pause and/or reverse of reopening could delay the economic recovery and derail the bull. Up until the past few days it felt like mid-February again with the market ignoring economic and corporate data as momentum pushed everything higher.

The jobs report was a bit unbelievable and then Fed Chairman Powell’s candor and reserved outlook at yesterday’s press conference put the fear right back into the market today. Meanwhile the Atlanta Fed’s GDPNow model currently estimates that 2020 Q2 GDP growth will be down -48.5%.

Sentiment had also become rather exuberant as the Weekly CBOE Equity Only Put/Call ratio we track in the “Pulse of the Market” hit 0.43 last week – its lowest level since the week ending 4/10/2010 about three weeks before the infamous flash crash. Investor’s Intelligence Advisors Sentiment survey Bullish advisors are now up to 56.9%. Correction advisors are down to 22.5% while Bearish advisors have slipped further to 20.6%, putting us at caution levels.

Technically, things deteriorated rapidly today. After blasting through several levels of resistance we have been tracking as shown in the chart here S&P 500 stalled at 3210 and plunged 5.9% today through 3115 support/resistance and closed just below 3010 support/resistance which sits at the 2019 summer highs. The next major support level below here is 2725 right near where the 50-day moving average turned up in mid-May, which would be a 15.7% correction from the recent recovery high reached this past Monday, June 8.

Hope springs eternal, but caution remains the prudent course of action.

Ned Davis Research bull and bear market definitions:

A cyclical bull market requires a 30% rise in the DJIA after 50 calendar days or a 13% rise after 155 calendar days. Reversals of 30% in the Value Line Geometric Index since 1965 also qualify. A cyclical bear market requires a 30% drop in the DJIA after 50 calendar days or a 13% decline after 145 calendar days. Reversals in the Value Line Geometric Index also qualify. Bull and bear markets are measured at peak and trough dates, so both the time and price criteria must be met as of the peak and trough dates.

[laughawayeternity]

weekly options trading strategies pdf Louisiana A good system will cut losses quickly and keep them small.

Table of Contents

weekly options trading strategies pdf Louisiana That said, your trading system doesn't need to work for all stocks it just has to work for certain types of stocks, certain volatility of stocks and certain price levels of stocks etc.

options trading made easy Louisiana You can buy calls and puts for directional trades.

options trading service Louisiana There are many different directional trading methods you could use to trade options.

khan academy options trading Louisiana You need to be cognizant of each of these variables.

best options trading website Louisiana Zero in on the key factors that make up a winning trade and try to fine tune your criteria to enhance your executions.

best online course to learn options trading Louisiana Flexibility - Nearly all options traders will tell you that options allow for flexibility in your trading.

gar capital options trading course review Louisiana Since options have a limited time period of anywhere from 30 days to several year depending on the particular option that you bought you must be sure that you purchase the correct option containing enough time on it to insure that time decay doesn't erode your investment away before your position has enough time to be profitable.

options trading newsletter reviews Louisiana Learn something new every day and absorb it into your options trading system.

weekly options trading strategies pdf Louisiana Most swing trading systems are based on daily bars on the stock price chart.

Adding covered calls and protective puts to long equity positions is a logical next step and can supercharge your account by generating monthly or weekly cash flow. Trade - Once you have defined the basics of your strategy, it is time to trade. Start small, one or two contracts, and keep detailed records of your transactions. Be sure to include what the underlying stock price was at the time of your option purchase or sale. Your records will help you analyze how you are doing and where you can improve. When you add new trading criteria to your system, you should be able to see an improvement to your statistics. If you do not, it is time to reassess your defined criteria. Evaluate - Evaluate your successes and failures. The frequency of your analysis will depend on how much you are trading. If you are trading actively, then a weekly or monthly review is important. Compare your losses with your winnings.

Critical Approaches:

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day trading spx options Louisiana When you add new trading criteria to your system, you should be able to see an improvement to your statistics.

You can sell or purchase spreads to receive the credit of the premium decay by options expiration. You can trade straddles and strangles if you expect a big move but are not sure in which direction. You can also get into ratio back spreads, condors, and butterflies. And if you're really feeling crazy you can sell 'naked' options (just better use a stop loss or you'll end up like one of my old trading buddies who ran an account to $20 million then gave it all back selling naked options. ) You can go to cboe. com for more information on options trading. Directional options trading systems are the best. Keep it simple, buy calls for and upside trade or buy puts for a downside trade. But this means you need a directional stock trading system in order to trade directional options. Here are a couple of different approaches for directional systems:Develop an options trading systems that trades the swings in stock price movement. There are many good swing trading systems available today. We suggest you obtain one. Bottom line with swing trading is that you want to swing trade with the trend. Options brokers these days have advanced order technology that will allow you to enter swing trades based on the price movement of the stock so you don't have to watch this stock all day. That huge advancement to swing trading options. Swing trade the day bars. Most swing trading systems are based on daily bars on the stock price chart. Swing trade the Intra Day Bars! Their other fantastic systems based on intraday charts that pin point swing trading entries. Develop an options trading system that trades three to six month trends.

options trading crash course downloas Louisiana Knowing the ins and outs of various trade setups is useless if you don't have a trading methodology that guides you in every step of the trade process.

Trading options without a system is like building a house without a blueprint. Volatility, time and stock movement can all affect your profitability. You need to be cognizant of each of these variables. It is easy to be swayed by emotion when the market is moving. Having a system helps to control your reaction to those very natural and normal emotions. How often have you sat and watched a trade lose money the instant your buy order filled? Or, have you ever watched a stock skyrocket in price while you are pondering over whether or not to buy it? Having a structured plan in place is crucial to make sound and objective trading decisions. By creating and following a good system, you can hone your trading executions to be as emotionless and automatic as a computer. Advantages of an Options Trading SystemLeverage - Trading options gives your account leverage on the stock market. With options, you can control hundreds or thousands of shares of stock at a fraction of the price of the stock itself. A five to ten percent change in the price of a stock can equate to a gain of one hundred percent or more in an option. Try to focus on percentage gains versus dollar amount gains in your trading.

best course on options trading Louisiana It might sound like a foreign language right now, but work on the vocabulary one lesson at a time.

Finding Or Creating Your Own Options Trading System That WorksStock Options are wonderful! This clever derivative of the equities market has to be one of the most ingenious inventions of modern times. For the trader who can learn how to win at trading options there are many luxuries in life that can be experienced. Success in options trading requires a consistent approach for long-term success. This statement is not meant to be grandiose, idealistic comment made by some 'trading theorist', rather, it is a statement born out of the hard knocks and success experiences of the author and many other long-term, successful trader contemporaries. This "consistent approach" to options trading can also be called a "trading system", or an "options trading system" in this case. The term "trading system" is not necessarily confined to a series of computerized "black box" trading signals. A trading system could be something as simple as "buy an option on a stock in an uptrend that breaks the high of the previous bar after at least two days of pull back down movement that make lower lows. " A trading system is simply an organized approach that takes advantage of a repeated pattern or event that brings net profits. Since an Option is a "Derivative" of the stock you must derive your options trading system from a stock trading system. This means your trading system must be based around actual stock price movement. That said, your trading system doesn't need to work for all stocks it just has to work for certain types of stocks, certain volatility of stocks and certain price levels of stocks etc. So focus your trading system on certain stocks that have price behavior that is predictable to the net results you wish to abstract from a stock. You can develop a trading system, a trading approach, and a trading methodology by identifying a price movement pattern (or lack of price movement pattern) or some event that occurs on some sort of regular basis. This means you can trade price behavior patterns on price charts such as: traditional chart patterns, trends, swings, pivot points, boxes etc. or you can trade events that motivate stock price such as earnings runs, post earnings runs, stock splits, seasonal factors etc. Bottom line to make the maximum profit in options trading you want your stock to move in your favor fast and you want it to move far. Just a relatively small movement in the price of a stock can double your money in options!There are so many different strategies and combinations that you can trade with options.

options trading td ameritrade Louisiana By understanding time decay, factoring an option's time into your trading method, how volatility impacts a stock option's value, what defines a reliable stock option trading methodology, and your own trading psychology you now have a foundation to develop into a winning stock option trader.

The system can be based on any type of option strategy and includes both fundamental and technical analysis.

With options, you can control hundreds or thousands of shares of stock at a fraction of the price of the stock itself. A five to ten percent change in the price of a stock can equate to a gain of one hundred percent or more in an option. Try to focus on percentage gains versus dollar amount gains in your trading. It requires a fundamental shift in conventional thinking, but it is crucial to managing a successful trading system. Objectivity - A good options trading system is based on measurable criteria that trigger buy and sell signals. It takes the subjectivity and second guessing out of your trading so you can focus on preset factors that make for an explosive trade. Flexibility - Nearly all options traders will tell you that options allow for flexibility in your trading. Opportunities in the options market make it incredibly easy to profit from short-term positions. With earnings events and weekly options, you can build strategies for overnight gains with clearly defined risk. There are a several ways to profit in any kind of market condition from trending to range bound. Protection - An options trading system based on the appropriate strategy for prevailing market conditions can act as a hedge against other investments.

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Flexibility - Nearly all options traders will tell you that options allow for flexibility in your trading. Opportunities in the options market make it incredibly easy to profit from short-term positions. With earnings events and weekly options, you can build strategies for overnight gains with clearly defined risk. There are a several ways to profit in any kind of market condition from trending to range bound. Protection - An options trading system based on the appropriate strategy for prevailing market conditions can act as a hedge against other investments. Protective puts are commonly used this way. Risk - A good options trading system limits risk in two important ways. The first way is cost. The price of options is very low compared to buying the same amount of stock. The second way is related to stops. A good system will cut losses quickly and keep them small.

day trading spx options service Louisiana Any Option Trader Can Develop an Options Trading SystemAs a trader, it is important build a system that utilizes different types of option strategies-iron condors, broken wing butterflies, calendar spreads, back ratios, straddles, strangles, and collars.

Here are a couple of different approaches for directional systems:Develop an options trading systems that trades the swings in stock price movement. There are many good swing trading systems available today. We suggest you obtain one. Bottom line with swing trading is that you want to swing trade with the trend. Options brokers these days have advanced order technology that will allow you to enter swing trades based on the price movement of the stock so you don't have to watch this stock all day. That huge advancement to swing trading options. Swing trade the day bars. Most swing trading systems are based on daily bars on the stock price chart. Swing trade the Intra Day Bars! Their other fantastic systems based on intraday charts that pin point swing trading entries. Develop an options trading system that trades three to six month trends. This is where the big money is. Trading the large trends is where many are able to place larger sums of money to develop their net worth. Develop an options trading system that trades pivot points. Pivot point trading is arguably the best way to trade options, because price action usually is explosive, and happens quickly in our direction when a trade works. This is good because you can use shorter-term options and leverage yourself a little better. And it's also nice you can make great gains in five days to four weeks on average so time decay issues become less of a worry. There are many different directional trading methods you could use to trade options. You need to pick one, work it, and never use more than 10% options position size per trade on small accounts 1% to 5 % max position size on larger accounts. This methodical way of money management trading options is the fastest way to potentially rapid account growth, helping you avoid needless set backs. Options Trading System - 5 Steps To Better Options TradingWhat is an Options Trading System?Before sitting down to write this post, I thought I would search the Internet to see what information existed on options trading systems. I was shocked to find that there was barely anything posted on the subject.

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Since an Option is a "Derivative" of the stock you must derive your options trading system from a stock trading system.

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[jlfmi]

Options Traders Ditch Their Hedges

Following the recent stock market breakout, stock options traders have significantly trimmed their hedges.

With the popular stock indices hanging near all-time highs for most of the year, one might think that stock sentiment would be extremely bullish. However, among the indicators that we monitor, we have observed very little evidence of unhealthy bullish extremes. That has made for an investing climate that is conducive to further market gains, including the recent, long-awaited breakout in the large-cap averages. With the breakout, however, we may be seeing signs of traders letting their guard down, so to speak. At least one data point pertaining to the equity options market suggests that.

Options traders use calls to bet on market gains and use puts as protection against declines. When a disproportionate amount of volume is going into calls relative to puts, it generally means traders are very bullish — and potentially too complacent about risk. On Monday, we saw potential evidence of that. Via the CBOE, the ratio of total volume going into puts relative to calls registered its 2nd lowest reading in 2 years. Ominously, the only lower reading occurred on January 23, 2018, just before a big decline.

Now, before folks get too alarmed, this is but one data point — and one day’s worth at that. Further, prior to 2 years ago, this series dropped to this low level, and lower, on a more frequent basis. However, it is one piece of evidence of complacency among the investment community that has predominantly been absent throughout the recent stock market strength.

So how alarmed are we about this data point? What would make us more alarmed, to the point of getting out of stocks — or going short? If you’re interested in an “all-access” pass to all of our charts, research and investment moves, please check out our site, The Lyons Share. You can follow our investment process and posture every day — including insights into what we’re looking to buy and sell and when. Thanks for reading!

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Disclaimer: JLFMI’s actual investment decisions are based on our proprietary models. The conclusions based on the study in this letter may or may not be consistent with JLFMI’s actual investment posture at any given time. Additionally, the commentary provided here is for informational purposes only and should not be taken as a recommendation to invest in any specific securities or according to any specific methodologies. Proper due diligence should be performed before investing in any investment vehicle. There is a risk of loss involved in all investments.

[schaeffersresearch]

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