Stock Picks Recap for 6/21/11
With each stock's recap, we will include a (with market support) or (without market support) tag, designating whether the trade triggered with or without market directional support at the time. Anything in the first five minutes will be considered WITHOUT market support because market direction cannot be determined that early.
From the report, ORLY gapped over the trigger, but filled the gap and then triggered long (with market support) and worked:
DLTR triggered long (with market support) and worked great:
JAZZ triggered long (with market support) and worked great:
In the Messenger, Rich's BIDU triggered long (with market support) and worked:
His SOHU triggered long (with market support) and worked:
His TZOO triggered long (with market support) and worked:
And COST triggered long (with market support) and did not work:
In total, that's 7 trades triggering with market support, 6 of them worked, 1 did not.
Forex Calls Recap for 6/21/11
One winner and one loser as the ranges narrowed a bit and not much happened. See EURUSD and GBPUSD below. Initial calls were in EURUSD, but I added new calls in GBPUSD ahead of the European session as we had an early move that set some new Levels.
US Dollar Index intraday with market directional lines:
New calls and Chat tonight, but we complete the 2-day Fed meeting tomorrow.
EURUSD:
Triggered long at A and stopped at B:
GBPUSD:
Triggered short at A, hit first target at B, closed second piece at C and entry in morning:
Stock Picks Recap for 6/20/11
With each stock's recap, we will include a (with market support) or (without market support) tag, designating whether the trade triggered with or without market directional support at the time. Anything in the first five minutes will be considered WITHOUT market support because market direction cannot be determined that early.
From the report, INFY gapped under the short trigger, no play.
SIGA triggered short (without market support) and didn't work:
In the Messenger, AAPL triggered short (without market support due to opening five minutes) and worked:
AMZN triggered long (with market support) and worked enough for a partial:
ANF triggered long (with market support) and worked:
Rich's CAT triggered long (with market support) and didn't work:
In the afternoon, AAPL triggered long (with market support) and worked for over a point:
SINA triggered short (without market support) and worked great:
In total, that's 4 trades triggering with market support, 3 of them worked, 1 did not.
Tradesight Market Preview for 6/21/11
The SP gained 7 handles on the day settling at Friday’s high and the 10ema. A follow through tomorrow above both these levels would turn the chart short-term positive. Key support remains just below at the 200dma and Gann 0/8 level.
Naz was higher by 9 on the day but only managed to get back to the midpoint of Friday’s range. The trend remains down until the 200dma and the 10ema are reclaimed by the bulls. Note that for only the second time in the month of June price settled decently above the open. This could be something for the bull to build on.
The market leading SOX continues to underperform the NDX which is a classic bearish divergence.
Since the above condition exists it should be no surprise that the NDX is underperforming the SPX. While the Naz side broke below the March low the broad market side has not. If the NDX continues to underperform, probability suggests that the SPX will breakdown below the March low.
There continues to be a huge divergence between the gold futures and underlying XAU gold mining stocks. This is bearish for gold futures.
Multi sector daily chart:
The NYSE cumulative A/D line showed good strength last week. This is very positive for the market and suggests that the current correction is a buying opportunity.
The leading cyclical index was the top gun on the day, breaking back above the 10 and 200 moving averages.
The BTK was higher by 10 on the day.
The XAU traded inside and left a tall tail on the chart.
The SOX underperformed both the Naz and SP Monday and could be a resting day before more range expansion.
The OSX was red on the day. Key support is at the 200dma and Gann 0/8 level.
The BKX was the weakest sector on the day. Note that the Seeker is only one candle shy of a 13 exhaustion buy signal and also that the MACD has crossed over.
Oil bounced off key support:
Gold:
Forex Calls Recap for 6/20/11
Small winner to start the week in the EURUSD, see below.
Heading into a 2-day Fed meeting now. New calls and Chat this evening.
Here's the US Dollar Index intraday with market directional:
EURUSD:
Triggered short at A, hit first target at B, lowered stop and stopped at C overnight:
Forex Calls Recap for 6/20/11
Small winner to start the week in the EURUSD, see below.
Heading into a 2-day Fed meeting now. New calls and Chat this evening.
Here's the US Dollar Index intraday with market directional:
EURUSD:
Triggered short at A, hit first target at B, lowered stop and stopped at C overnight:
How Can Options Unraveling Make You Money
We just completed options expiration week, and triple expiration at that (options, index futures, and commodities).
On item that I try to point out every options expiration week is the importance of options unraveling, which typically occurs mid-week, most commonly on Wednesday. What is unraveling? It's the point where the big players close out their options positions that are in the money as time is running out. This has big implications for moves in the market, and it therefore often causes the biggest move of the week.
The key to making money off of this phenomenon is to understand what it is, then to know when to expect it, then to identify when it is occurring, and then to take advantage of it by increasing your odds.
The secret to unraveling is the following: when it happens, the market picks a direction sometime after the first hour of play, heads that way on volume, and never really reverses. In other words, if you see unraveling happen, you know what direction to stick with all day long.
So, that's what it is.
When do we expect it? Usually mid-week, most commonly Wednesday, of expiration week, after the first hour. So, that's when I watch for it.
How do we know we get it? A move will start, and VOLUME WILL REMAIN HIGHER THAN NORMAL midday.
What do we do once we spot it? Have great confidence in sticking with that direction into the close.
Here's Wednesday with the first hour boxed off on the broad market futures after a gap down:
So from this point, if we're going to get unraveling, we should see a move begin to occur and volume stay up. Do we get it? Here's the shot after another 30 minutes:
Note that we are breaking lows at a time of day where things are usually slowing down, and volume is up. But, that could be just one bar of volume, does the volume hold? Let's jump a little further ahead and compare the volume midday to what we saw the prior two days:
Yes, indeed, volume is staying up as the market is selling off.
So, we expected it on Wednesday, now we have it, what do we do with it?
Well, the unraveling move is down. Most other days recently, we have seen a return to the midpoint of the session after lunch on light volume. I wouldn't expect to get that move now. I would focus on any rally failing and looking for shorts.
So as we come back from lunch, the market starts to tick up. I told subscribers that I didn't think we'd get back up to the midpoint with the rally:
And, in fact, we did not. Everything failed as expected:
What does that do for me? It keeps me looking for short entries throughout the second half of the day with little concern that that is the correct direction. I focused on AMZN:
And SINA:
Both of which worked great.
Sometimes, trading is that easy, and you need to focus on those easy moments. Unraveling only happens once a month (and sometimes, it really doesn't happen at all in any convincing fashion). Still, when it happens, we expect, identify, and then act with confidence.
Stock Picks Recap for 6/17/11
With each stock's recap, we will include a (with market support) or (without market support) tag, designating whether the trade triggered with or without market directional support at the time. Anything in the first five minutes will be considered WITHOUT market support because market direction cannot be determined that early.
From the report, ORLY gapped over the trigger, no play.
CECO triggered short (with market support) and worked, but was late in the day:
FSLR triggered short (with market support) and didn't work:
COST triggered long (with market support) and worked:
Rich's CF triggered short (with market support) and worked:
His DVN triggered short (with market support) and didn't work:
In total, that's 5 trades triggering with market support, 3 of them worked, 2 did not.
Forex Calls Recap for 6/17/11
What a great week. Another winner in EURUSD, see below. Here's the US Dollar Index intraday with market directional tools:
We closed out over 500 pips of winners to final exits this week, which ain't bad.
As usual with the Sunday report, we'll look at the action from Thursday night/Friday, then look at the daily chart heading into the new week, and then look at the US Dollar Index.
EURUSD:
Triggered short at A and lowered stop to stop at B. I had added trigger for long over Pivot, which was separate from the earlier call. That triggered at C, hit first target at D. If you only put in the original call, that triggered at E and hit first target at F. Closed final piece of all of it at G:
Stock Picks Recap for 6/16/11
With each stock's recap, we will include a (with market support) or (without market support) tag, designating whether the trade triggered with or without market directional support at the time. Anything in the first five minutes will be considered WITHOUT market support because market direction cannot be determined that early.
From the report, APKT triggered short (without market support due to opening five minutes) and went enough for a partial, but all was probably too fast to get involved in:
INTU triggered short (without market support) and worked:
FISV triggered short (with market support) and worked, the spike is bad data:
Rich's YOKU triggered long (with market support) and worked:
His BIDU triggered long (with market support) and worked enough for a partial:
GS triggered long (with market support) and worked:
EBAY triggered long (with market support) and did not work:
BIIB triggered short (without market support) and worked enough:
COST triggered long (with market support) and didn't work:
Rich's FSLR triggered long (without market support) and worked:
In total, that's 6 trades triggering with market support, 4 of them worked, 2 did not, but nothing exciting on a flat day.