Archive for July, 2010
All Eyes Are On the Euro Stress Test Results. They Will Be Released At 12:00 pm EST
After a huge run-up yesterday, the markets are fairly quiet this morning. Earnings came out pretty much as expected and gainers and losers have balanced each other out. The S&P 500 futures are unchanged 20 minutes into trading. Cyclical stocks led the rally yesterday after 3M, UPS and Caterpillar posted solid numbers. The earnings for Monday are fairly light and so is the economic calendar. For now, the market is clearly focused on the European bank “stress test”. That news will start to hit the market at 12 o’clock EST. That is when European markets close and traders will have the …
-How I Trade Options - Confidence Affects Strategy!
This option trading blog nearly concludes my series on “How I Trade Options”. After all of the research and analysis has been completed, I step back and I evaluate my level of confidence by breaking it into three categories; the market, the stock, recent performance. My option strategy will depend on where I am in the confidence spectrum. At the highest extreme I would be buying front month out of the money options. At the low end I would be selling out of the money naked put options on a stock I like fundamentally - in a scaled manner. The Market …
How Should I Approach High Implied Volatility Stock Options?
Every month we can always find options with very high implied volatility, especially from pharmacuetical companies that are waiting for FDA approval. Is there any proven way to profit from this situation regardless of the decision of FDA? (please, don’t recommend a straddle)
Let The Rally Play Out - Economic News Will Start To Weigh On The Market Next Week!
This week, a light economic calendar and decent European bond auctions allowed the market to focus on earnings. Those two dark clouds will reappear shortly. Economic conditions are gradually deteriorating and fears of a double dip recession have surfaced. Next week, new home sales, consumer confidence, durable goods orders, initial claims, the Beige Book, Q2 GDP, Chicago PMI and consumer sentiment will be released. In two weeks, ISM manufacturing, factory orders, ADP employment index, ISM services, initial claims and the Unemployment Report will be released. This will be a minefield for the market to wade through and I believe prices will …
Good Earnings Will Push the Market Higher Today!
As I mentioned in yesterday’s comments, a light economic calendar and successful bond auctions in Europe would be market friendly. These two sources of negative information are absent this week. Overnight, Apple smashed estimates and the stock was up $10 after hours. This morning, Morgan Stanley, Wells Fargo and U.S. Bancorp all posted good results and the stocks are rallying. The financial sector has been bracing itself for negative earnings and they weren’t as bad as expected. Coca-Cola is also up in early trading. United healthcare also posted excellent earnings and that should help health-care stocks. With earnings being the focal …