Archive for February, 2010
Types of Options Traders
Describe for me the different types of options traders.
Nervous Trading Will Set In Next Week - Go Team USA!
In today’s chart you can see that the market has been in a relatively tight range between SPY 108 - 112 during the last four months. We had a small break out to new highs and a brief dip below that level. Bulls and Bears are fighting it out and in the next few weeks we should have a breakdown. Bulls argue that solid earnings and low interest rates present attractive stock valuations. Corporate balance sheets are strong and companies have dramatically reduced expenses. Any uptick in demand will go right to the bottom line. This is a strong argument and …
The Headwinds Are Blowing - Wait For A Breakdown Below SPY 108!
A warning shot was fired in January and the market dropped sharply from relative highs. It established support two weeks ago and a half-hearted rally brought us back above the 100-Day moving average. The volume during the decline was much heavier than the volume during the bounce indicating that there was more downside to come. Resistance at SPY 112 was not even tested before the selling resumed. This morning, the S&P 500 futures are down 17 points on the open. Initial jobless claims were weaker than expected and the employment picture is not improving. In a recent survey (Challenger Gray & …
Expect Choppy Trading While Economic Conditions Deteriorate - Get Short Below SPY 108!
Yesterday, the market sold off after testing resistance at SPY 112. Europe is casting fear on the market. Germany, the strongest and largest EU member reported that business sentiment declined in February. Two weeks ago it reported that Q4 GDP was flat. These results were confirmed when Commerzebank (second largest German bank) reported a large loss yesterday. The credit crisis in Europe is spreading. Greece will need to issue new debt soon, but it is afraid to. After their last bond auction, interest rates spiked and a huge risk premium was priced in. The demand for a new auction could be …
More Signs of Stress In Europe - The Pressure Is Mounting!
Yesterday, the market took a breather after a big week of gains. It rested just below horizontal resistance at SPY 112 and lackluster trading set in. Before the market opened this morning, weakness in Europe set a negative tone. German business sentiment fell for the first time in almost a year. A survey of 7,000 firms revealed that the business climate index had fallen from 95.8 down to 95.2. Analysts had expected a reading of 96.1. This is important because Germany is the strongest EU member and is the largest exporter in the world. Two weeks ago, the EU reported flat …