I'm always interested to meet people who think that the fundamental strength/weakness of a company/sector/index is meaningless. I've heard a few arguments supporting these claims that were well thought out, but none of them have really had a very solid foundation because the arguments were always taken out of context. My view.... Fundamentals are the most important FIRST step. IOW, which industries are likely to gain an advantage under the given circumstances. And on the flip side, which are likely to be disadvantaged by certain factors. For example, our current economic situation (rising rates) is beneficial to health care and consumer staples. If I'm looking to make a bullish trade on an equity, I am going to favor those sectors. On the other hand high rates really hurt the tech sectors such as chips and box makers, thus if I want to make a bearish trade I will gravitate toward them. Once I have narrowed my search in this manner I can move on to TA to provide a slightly better than random entry into my positions. Most arguements against fundamentals that I've heard don't acknowledge the fact that fundamentals are not a short term indicator. They are indicative of likely strength in comparison to the broader market over a longer time frame. A strong company in a strong sector isn't necessarily going to go up today. It might not go up at all, but it will likely not drop as much/quickly as a weak one in a weak sector. Whenever I neglect fundamentals completely I usually find myself in trouble. Case in point: my last few AAPL trades.
On the dip yesterday I grabbed the 100 of the 1165/1155 june bull put spread for .20 yesterday, and it's worthless today. Nice bit o change on the dip.
Nice trade. It is helpful to let us know when you do the trade so we can follow along. I am very interested in learning from the people here and how they think when placing positions.
The argument over whether TA works or does not is so overdone so we can push that out the door for another thread . I do not care what works or what does not work in general, only what works for me and you should only care about what works for you. Mark: Murphy's book on technical analysis is also a good "bible" for study. Now back to credit spreads and how much fun I am having at the Trader's Expo lol. Do not rush into JULY yet. Those of you too eager to wait until the FED meeting to grab JULY credit spreads or condors will be sorry in my humble opinion. Cash is also an investment, don't forget. I know the joke about how conservative I am but the last few days of market crashes have not made me nervous being at 1190 .
Re-post JUNE POSITIONS Sold 225 SPX JUN 1140/1160 Put Spreads @ $0.75 CLOSED for $0.15 or net profit of $0.60 or $12,375 after commissions. OPEN: Sold 225 SPX JUN 1330/1350 Call Spreads @ $0.15 Credit = $3,375 OPEN: Sold 225 SPX JUN 1195/1175 Put Spreads @ 0.20 Credit = $4,500. Hedges + 200 SPY JUN $133 Calls @ $0.05 for $1,000 + 50 SPY JUN $121 Puts @ $0.35 for $1,750
I actually posted yesterday asking for feedback on the 1185/1175's, but no answer from the crowd. So I either figured: #1) Everyone went out and did the trade or #2) No one really cared, or they thought I was crazy so I figured to play it safe I'd roll down a few strikes. But after last month, I'm looking to recover some of the small loss I took, so I figured a extra 2K would help, if I'm not counting my chick's before....etc....
Well my excuse is I am having too much fun in the Trader's Expo but 1185 is a safe strike for JUN given the time left to expiration and 1245 and 1200 support levels.
OK, saw your post. Just because we are quiet, I know that I am very much interested in your actual trades. Yeah, optioncoach, it's hard to keep the finger off the trigger, but I don't see a target so I''ll wait and watch. Cash is indeed a position.
Yeah thats the part I had to learn the hard way. Forcing trades and having to be in the market was a large part of my tuition. I now try to think of it as a game of chess. When you start making your moves quickly you inevitably make mistakes that cost you. Tim K