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May 22nd Watchlist

Sang Lucci — Wed, 22 May 2013 17:26:35 +0000

All eyes will be on the FED announcements today as we have Bernanke scheduled to speak at 10 AM & the release of the FOMC minutes at 2 PM. Many traders are hoping this economic news will be the catalyst to provoke a fresh big picture move out of the indexes today. The markets have been choppy this week while sentiment has remained quite bullish.

Top earnings ...

Trading Update May 21st

Sang Lucci — Wed, 22 May 2013 14:02:36 +0000

The S&P index hit all time highs and pulled back soon after again in a remarkably similar day when compared to yesterday’s trading session. We had a mixed bag across all sectors with the Financials remaining in positive territory and some of the High Flyer/Internets pulling back.

We’re noticing weekly call premiums starting to decrease as the volatility comes out & people have started slowing down on a lot of the buying activity. Sell these premiums worked well today in many of the high volatile names but it is a risky strategy since you are basically trying to pick a top. Luckily, for the savvy tape reader out there, writing options can be a ...

Mid Day Trading Update – Is The Reversal Coming?

Sang Lucci — Tue, 21 May 2013 16:03:01 +0000

As expected, we're looking at yet another chop session as we get into the lunchtime hours. The indexes were riding along in negative territory for most of the morning but we've since gone back into positive territory after comments were released concerning future FED policy. FOMC minutes will be released tomorrow and many traders are hoping that will be catalyst to start a possible reversal in the current bullish trend.

The Tech/Internet ...

Trading Update May 20th

Sang Lucci — Tue, 21 May 2013 13:39:55 +0000

SPY held $167 after making attempts above and below. What we're seeing now is an environment that advocates a trader to exercise the discipline of not trading. Writing strategies against what ‘looks' to be solid breakouts & breakdowns is also a strategy that can be employed as the markets slow down from this infamous bull run.

Priceline (NASDAQ: PCLN) was the name to be in today for the folks here at Sanglucci.com. This one was able to make an alpha ...

May 21st Watchlist

Sang Lucci — Tue, 21 May 2013 13:31:02 +0000

Indexes are flat this morning and with the lack of economic data coming out today, we're most likely looking at yet another choppy trading session. FOMC minutes are scheduled to be released tomorrow so that may end up being the catalyst we need to get some volatility back in the equities markets.

Gold & Silver are gapping back down this morning after a wild ...

Mid Day Trading Update – The Trend Is Your Friend

Sang Lucci — Mon, 20 May 2013 20:57:22 +0000

Markets are still holding a bullish sentiment here despite the weakness seen in the premarkets. We’re coming off the highs as we move into the afternoon session but we are still in all time high territory on the broad indexes. Many sectors are still showing buying steady buying activity and no signs of pulling back have been exposed on the tape.

The big news of the day is this $1.1 billion deal for Yahoo’s purchase of Tumblr. Tumblr was sort of a way to aggregate the blogging experience and simplify the process instead of using ...

Benzinga Weekly Options Outlook for the Week of May 20

Sang Lucci — Mon, 20 May 2013 16:48:27 +0000

Options overview this week is pretty much the same as the previously mentioned video.

We're still in melt-up status with many of these single names. S&P 500 (NYSE: SPY) has been hitting all time highs pretty much every day, causing a bit of heartache for the shorts. Any short opportunity is short lived, recommendations are to short via 'In The Money' (ITM) weekly options for scalps.

Otherwise, long calls ...

Market Wrap for Friday, May 17: Stocks Gain on Late Day Rally

Luke Jacobi — Fri, 17 May 2013 20:25:21 +0000

Markets surged Friday afternoon, bringing the Dow near a record high at 15,354.40.

The S&P 500 closed up almost one percent, with the Nasdaq up slightly more than that.

The rise in stock prices this week can be largely attributed to the end of earnings season, job numbers, and positive information from Japan.

Commodities

Crude Oil traded up slightly today to $95.19, while gold declined $24.80 to $1359.30.

Bonds

The iShares Barclays 20+ Yr Treasury Bond ETF (NYSE: TLT) droped over one percent today to 117.07 near the close.

This pushed the 5, 10 and 30 year bond yields up 0.06, 0.08, and 0.08 ...

Friday – Options Expire Today, Will the Rally Expire Too?

Phil's Stock World — Fri, 17 May 2013 13:41:11 +0000

Reality, reality, wherefore art thou reality?

I like to put up this chart of the Macro Indicators (this one from Dave Fry) every once in awhile, just to keep us grounded as we play the market at these nose-bleed levels. And yes, I know I sound like a grumpy old bear, the same way I was accused of being a perma-bull 8 months ago, when the S&P had crashed 10%, back to 1,343 and I wrote articles like:

"Thankless Thursday – Still Waiting for that Stimulus to Kick In" (11/1/12)
"Two Term Tuesday – Obama Victory Allows 4-year Rally to Continue" (11/6)
"Fed Up Thursday – WMT and the Fed Fail to Boost the Market" (11/15)
"Testy Tuesday – Can We Hold Our Weak Bounce Levels?" (11/20)
"Dividend Investing – ...

Mid Day Trading Update – The Overbought Dilemma

Sang Lucci — Fri, 17 May 2013 13:11:51 +0000

Even to make the statement that we are overbought to begin with is quite bold when you think about it. I mean we could continue rallying slowly up to SPY $170 or even higher without any kind of significant pullback. However, when stocks get a little bit ahead of themselves, the chop action is never too far away. We've flattened out close to all time highs today, with the SPY unable to reach the highs from yesterday's trading session but ...

Four Things Einhorn, Soros Are Forgetting About Gold Miners ETF

ETF Professor — Fri, 17 May 2013 10:53:22 +0000

Highlighting fourth-quarter 13F filings with the Securities and Exchange Commission, it was noted hedge fund legends David Einhorn and George Soros held sizable stakes in the largest gold miners ETF, the Market Vectors Gold Miners ETF (NYSE: GDX).

To be fair to Soros, during the fourth quarter, he pared his stakes in GDX and the Market Vectors Junior Gold Miners ETF (NYSE: GDXJ) by 800,000 and 400,000 shares, but he still owned 1.5 million shares of GDX and about two million shares of GDXJ at the end of the quarter.

At the end of the first quarter, Soros held 2.66 million shares of GDX, according to the latest 13F, meaning his stake in the ETF almost doubled. The filing also shows Soros still holds 1.2 million shares of GDXJ and initiated a new options position in that ETF.

As for Einhorn's Greenlight Capital, that hedge fund still owns over 6 million shares of GDX. Either Einhorn and Soros know ...

May 16th Watchlist

Sang Lucci — Thu, 16 May 2013 13:23:52 +0000

Jobless Claims surge to 6-week highs, well above expectations and Housing Starts dropped 16.5%. Consumer Price index also fell in April. This economic data has pushed the indexes down slightly during the premarkets but we've held up well considering the negative sentiment from these reports.

Gold & Silver are looking at some aggressive gap downs this morning and both of these precious metals are near or through their lows seen from the ...

Benzinga Options Outlook for the Week of May 13

Sang Lucci — Mon, 13 May 2013 19:03:36 +0000

Markets continue their move up in a slow trudging manner. Unlike our typical bull rallies where everything across the board is breaking out.

We have slow movements along with historically low volatility environments. This combination makes the risk favorable for those that are long options, but without any solid moves in stock, much of that volatility is sapped out and the decay writers are making it on top.

Many put writes post earnings ...

Introducing – Stocks And Options At A Glance

Zentrader — Mon, 13 May 2013 17:39:23 +0000

By Chris Ebert

Here it is! The all-new Stocks and Options at a Glance.

With just one look, it is now possible to see exactly which option strategies are currently profitable and which are not. Those who use option performance as a technical indicator can now see where the stock market is now (as measured by the S&P 500 index) and where it is likely to go next, with a simple “You Are Here” marker.

This week's profitable strategies* are:

Covered Calls
Naked Puts
Long Calls
Married Puts
Long Straddles
Long Stangles

Click on chart to enlarge

This week's losing strategies* are:

Long Puts
Married Calls
Naked Calls
Covered Puts
Short Straddles
Short Strangles

*All strategies involve at-the-money options opened 4 months (112 days) prior to this week's expiration using an ETF that closely tracks the performance of the S&P 500, such as the SPDR S&P 500 ETF Trust (NYSEARCA:SPY)

You Are Here – Bull Market Stage 1

Stocks are now in Stage 1 of a mature bull market. Bull markets tend to progress from stage 0 to stage 5 and then repeat the process, beginning again at stage 0. There is no limit to the number of times the process can be repeated, so a bull market may continue indefinitely, until at some point in the future Stage 5 fails to materialize. Stage 1 represents an over-extended market, which often precedes a correction.

Often the correction occurs quickly, within weeks of Stage 1 being reached. Occasionally, however, the market gets “lottery fever” and buyers start coming in from the sidelines, even though the market is over-extended. When this happens, a healthy correction can be postponed for weeks, sometimes months.

Stage 1 represents a point where newspapers, television newscasts and other media begin to run headlines about the raging bull market currently underway. These headlines tend to lure more money into the market, some of it from folks who may have little or no idea how market cycles work. The fact is, over the past 10 years, Stage 1 has rarely lasted more than 4 months. Given that the current Stage 1 began on March 9th, chances are pretty good that it will be over by the time July rolls around.

To put the ridiculous nature of the current bull market into perspective, one need only look at the recent performance of long straddle option trading. For those unfamiliar with straddles, it is equivalent of betting that the market will go up while also betting that the market will go down.

To put it another way, it's like betting on both teams in a sporting event, or betting on every horse at the track at the same time. Not only has long straddle trading has been returning profits since March 9^th, those profits have at times exceeded 4% – a remarkable accomplishment.

So, what happens next?

Sometime soon, most likely prior to July, ...

Why I Don't Fear Trading in Front of Earnings

Bob Lang — Mon, 13 May 2013 12:25:14 +0000

One of the fears about trading options is being hit by an event and the stock moving against you. A 5 contract trade opened at 2.00 can be vaporized in a day on some bad news. $1,000 nearly wiped out. Not easy to recover from that, either. I’ve been there many times. It stings, but if we use good risk management and control these events won’t be damaging. So, you may ask – ‘Bob, why even go there at all? – The market is open all other days besides earnings, why go through the agony of a binary event?” Good questions to ask, but let’s break this process down a bit to get a better understanding.

As always, let’s start with the charts. I find my trade setups using the chart and technical patterns that ...