Unbeknownst to most retail rats a fight is taking place in the equities market, and it revolves around an exotic concept only known to a select few in the options trading world. I’m speaking of course about the weekly expected move, and what makes it so important is the fact that much of what drives stock markets these days is driven by the options market. How so? Let me explain.
Imagine my surprise when equities melted higher throughout yesterday’s session, then sold off most of it in the last 30 minutes, only to gain it all back overnight? No you’re right – it wasn’t much of a surprise, especially after the big players showed their hands late last week by seeding the financial MSM with bearish opinion pieces. That’s how the game is being played – and it’s got a name: the good ole’ rope-a-dope.
Everything I touch today seems to either be out of commission, requires maintenance, or repeatedly crashes. One of those U2 Mondays I guess, so after burning through two frustrating hours this going to be a pretty snappy post. That said – the two charts I was able to scrape together should be raising your eyebrows, especially if you’re bearish.
What a difference just three trading sessions can make. Here we were last Friday seemingly on course to exceed the April highs when suddenly the floor gave way on Monday morning and we sold off for three consecutive days. Of course the financial MSM didn’t miss a beat and immediately trotted out the likes of Stan Druckenmiller, David Tepper, and Jerome Powell who did their very best to jawbone this market lower. Are they right? Is this v-shaped recovery doomed to fail?
The market recovery over the past two months has been nothing short of miraculous. I’ve looked at a lot of historical wipe outs in my time and none of them even come close in regards to recovering lost territory and more importantly when it comes to the normalization of implied volatility.
With what’s been happening in the world the past 4 weeks, a lot of people are coming out of the wood work and smelling opportunity. As people who spend a great deal of time trading, Mike and I have an influx of texts, phone calls and e-mails from friends, family and clients about putting some long term capital to work.
The common theme I see among most casual investors is the confusion between trading and investing. The rules for each are much different and many trading rules do not apply to investing. Likewise, many investing rules do not apply to trading. Swapping these rules sets will get you the financial equivalent of prison raped while you have to hold the boom box blasting Air Supply.
Let’s look at the difference between the two and start with a great example of investing, Warren Buffet.
TESLA has been running on steroids over the past few weeks. Is now a good time to buy, to sell, or to just kick yourself for missing out on these massive moves? In this video I will walk you through three different scenarios on TSLA: The bullish case, the bearish case, and the professional trade, plus I’ll offer my prospective on all three of them.
Good morning people of the financial galaxy.. It’s a lovely gray and snowy day here in Chicago. We haven’t had much snow yet this winter and it’s been warm(er), which is kind of a bummer for me. Many of the local ski mountains have had crappy conditions with the warmer weather. By crappy, I mean icy which turns all runs into double black diamonds as the sun starts setting in the afternoon when it’s way up in the mid 30s.
Good morning top dog traders of the Evil Speculator domain of the internet. I’m sipping my bullet proof decaf cafe’ this morning after I spent some time putting together my tunes for my DJ set at Afrika Burn this year. AfrikaBurn, South Africa’s sanctioned version of Burning Man, takes place about 6 hours outside of Cape Town in the middle of the African desert in late April. It’ll be my first experience living from a make shift home in a Backie which is the South African equivalent of a U-Haul. Continue reading
If I could have a penny for every setup I felt enthusiastic about and that invariably blew up in my face I would be… well, a lot richer than I am. To be honest when it comes to picking juicy entries off a chart I rank about average. What may set me apart from the rest, and what has helped me survive in a wide range of market conditions over the years was learning to overcome my instincts and engage in setups that scared the heck out of me.