Tuesday, September 25, 2012

$AMZN Bull Put Spreads At Trendline Support

Amazon pulled back today and held at the rising support line.  Stochastics have worked off their oversold conditions, and the Bollinger band and 50-day moving average have risen above the short strike, which is also over 3 ATRs away.  A little bit of price/volume resistance in the 245-250 area as well.

I'm not condoring these spreads right off the bat.  If anything, I will wait and watch the price action over the next few days.  Currently an 84% probability of max profit on this trade.

STO AMZN Oct 240/235 bull put spreads for ($1.62-$1.10) x 100 x 5 lots = $260 credit

Monday, September 24, 2012

Monday Market Conditions 9/24/12 $SPX $SPY $VIX $VXX

Over the weekend, Apple (AAPL) sold more than 5 million new iPhones in the first weeknd, but that's about half of what analysts expected.  In the EZ, Spain is running lottery bonds, and Germany is getting impatient

The S&P continues to consolidate, forming a potential bull flag.  Will have to see how it plays out.  Regardless, the long-standing channel up remains intact.  We could keep riding this up for a while.

Volatility and fear still remain depressed.  Not many known-unknowns left out there in the near future now that Ben, Draghi, and Japan have announced stimulus.  Much of the important news is priced in.

Even with the market still edging lower, the McClellan Oscillator is barely negative.  Not much conviction in these down days recently.  The percentage of stocks trading above their 50-day moving averages remains astronomically high at ~80%, and the put/call ratio is still call-heavy.

-Technology is flagging after breaking out.  Could be preparing for another blastoff.
-Financials, Energy, & Miners all sliding after the big QE3 pop two weeks ago.

-Small caps appear to be back to risk-off, supported by...
-The defensive Utilities sector outperforming.
-Industrials turning back down, confirming weak global manufacturing.
-Not a good sign when the typically forward-looking Transportation sector makes lower lows.

Friday, September 21, 2012

Friday's Best Of The Web 9/21/12 @optionpit @VIXandMore @OptiontradinIQ $FB

Today's first article comes from the folks @Optionpit. In their article, they point out an interesting Facebook ($FB) trade idea:

"The FB Aug31 Weeklys were trading for a 44% volatility on the close today.  That is a full 25 pts. lower than the 10 day realized and 30 points below the 20 day realized volatility.  That is darn cheap gamma...  I think a 45% IV with 5 trading days to go in this name is a good purchase.  With the story this good maybe another 10 million share seller looms for a nice nasty drop or surprise pop might be just around the corner."

Click on the image to read the full article.

The next article comes from @VIXandMore.   Billy Luby points out the best way to short the EUR/USD: Travel!

"As someone who spends a great deal of time nine time zones away from the events behind the European headlines, I was somewhat surprised to see the relative calmness and lack of concern in the people I spoke with about the European sovereign debt crisis. This is not to say that the consensus was that the most difficult phases of the crisis were in the rear-view mirror, only that in due time, all would be sorted out and life would go on in a manner similar to the way it was prior to 2008."

Click on the image to read the full article.

Last comes a post from my friend Gavin @OptiontradinIQ. Look who made #8 on his list of top 10 option trading blogs:

"Selling Theta is another new name in the option blog scene, but it has already developed a devoted following. The weekly updates manage to break complex concepts down into easy to digest and actionable ideas. Live trades are also posted on the site and updated regularly. Got married recently to the lovely Angela and had their honeymoon in Cayman and it was great to be able to catch up."

Click on the image to read the full article.  You may also see some other blogs you recognize on there.