update on vol switch trade, will now use ZIV for the short vol position, , to review, the signal went to long vol, on Mon Jan 8, and we went to cash, selling 12 shares of XIV for $144.33 ea, total $1,731.96 signal went to short vol on Tue Feb 6 bought 5 shares ZIV @ $63.11, total $315.55
good info from Louis Navellier ... https://navelliergrowth.investorpla...518&cc=eletter&en=3965369&num=01#.WqsqdkxFxjo
what some of the other sites I check on are thinking about the market... Dent, very bearish, could be starting decline now Bubba, calling a market top now Stansberry, calling for bankruptcies, but has a guy on board, Steve Surgerrud, calling for a two year market melt UP to end the bull top gun options, caution bull, says chop around the 50 ma for now day trading zones, thinks May, Jun, July could see sell off Mad Hedge Fund Trader, sees market ok thru 2020, still likes tech stocks Tom Busby, thinks good market thru the year
update on revised vol switch trade, the trade now has one of two positions to be in, based on signal from inputs, short vol, go long ZIV long vol, sell ZIV, go to cash signal went to short vol on Tue Feb 6 bought 5 shares ZIV @ $63.11, total $315.55 signal went to long vol on Thu Mar 22 sold 5 shares ZIV @ $67.08, total $335.40, gain, $19.85
trade idea for TSLA around the quarterly production number release, which was on 3/3 http://www.cmlviz.com/research.php?...sla-rallies-after-this-event--and-it-is-again Tesla Inc has two types of earnings events -- one normal type -- there's a date, we all expect it, they report revenue and EPS numbers. But Tesla has a second type of event that requires a 8-K filing, and that is the end of quarter vehicle deliveries summary it reports. It's this event that we track at Capital Market Laboratories, and it's this event that has seen a repeating pattern. Tesla just released its vehicle delivery numbers one day ago -- it was a miss but relieved fears of catastrophe. That description could have been written for any of the prior four quarters, and it's because of that repetition, that a tradeable phenomenon has appeared. Let's look at the results of buying an at the money call option in Tesla that is closest to 21-days from expiration but more than 20, but waiting until 4 days after it reports its delivery data.
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https://www.investingdaily.com/41741/how-to-pick-industry-sectors-based-on-the-business-cycle-2 some highlights, Summer vs. Winter Industry Sector Seasonality A 2009 academic paper found that consumer-related stocks (e.g., food, drugs, beer, leisure, utilities, media, and retail) outperform the overall market between May 1st and October 31st and manufacturing and production stocks (e.g., consumer durables, chemicals, construction, mining, steel) outperform between November 1st and April 30th. All industry sectors perform better in the Nov.-April period, but consumer stocks do reasonably well year-round whereas manufacturing and production stocks really stink up the joint during the summer and early fall. Consequently, the paper’s most important conclusion is that investors can beat the market by avoiding the manufacturing and production stocks in the May-October period. Month-Specific Industry Sector Seasonality There are two other sources for industry-sector seasonality worth noting: (1) Stock Trader’s Almanac and (2) EquityClock.com. According to the Stock Trader’s Almanac, no industry sectors are good buys starting in May,but we’re still in a bullish phase for computer and Internet stocks, which began in April and ends in July. There are several good shorts to initiate on May 1st: consumer cyclicals, gold/silver, and materials. Get ready to short banks and natural gas beginning in June. According to EquityClock.com, which regurgitates information from Thackray’s Investment Guide, the bullish periods for large-cap value stocks and the Canadian dollar end in two days (April 30th) and the metals and mining bull market will end on May 5th. New bull markets include consumer staples (began April 23rd) and bonds (begins May 1st). looking forward to the biotech bull that starts on June 23rd because biotech bulls are usually quite explosive
Some thoughts on Elliot, Fib, and Gann, for market analysis, Elliott is crowd psychology, not engineering or physics. There are some mathematical dimension but that's Fibonacci and a different study. Time is "not" a component of psychology, so Elliott leads news not the reverse. Some traders in this field use Elliott (crowd psychology), Fibonacci (distance) and Gann (cycles of time).
some highlights on selling options How to find the RIGHT STOCKS to sell options against Success in selling options for income is based on finding the trends that move stocks, identifying the best companies within those trends to trade. Many traders "start" with premium. They look for the trade offering the "biggest" premium because they think this represents the best "trade." Usually it doesn't. Instead, this sequunece shows the process used to find the "Perfect Income Stock". Trend/sector, company stock, chart, chain, premium. What makes a Perfect Income Stock? A strong company with solid market position and strong fundamentals capitalizing on a growth trend in the economy. A stock that has a trade-able chart - meaning a well-defined price range that can be used to identify the right "option" to sell. THEN we get to the chains and the premium. If the premium isn't above the .5% solution - we do NOT make the trade. We can come back to the stock the next week and see if that has changed, but right away we know we are not meeting the minimum trading goal. Conversely, if we see a stock with a wild trading range, with unpredictable highs and lows, there is no way we want to trade it, no matter what the premium is, because we are too likely to end up with a potential losing position. When we learn how to master this process, we find ourselfs trading FEWER stocks throughout the year because those stocks are consistently paying a premium AT or ABOVE the Income Goal (.5% or higher). The last three parts to that sequence: Chart, Chain and Premium are the next most important steps to master when selling options. This ensures selling an option against a favorable chart; that you find the right strike price and the correct premium (the .5% solution). But there's more - key variables including volume, implied volatility and other factors that go into selecting the right option to sell. Then, executing the trade correctly for the maximum premium possible,…plus how to begin to manage the new option selling position. When you have the right process to begin with, you're more likely to make the right trade consistently. And once we have made your trade, we need to know... How to Manage the Trade to Protect Profits and Prevent Losses The options seller has a significant advantage over the options buyer: as the seller, once the trade is placed, we are managing money we already have made. This is the hard "switch" to learn for options traders because the "buyers" mentality is managing a "return" on a trade, rather than managing "cash." Trade management when selling options comes down to three critical things: Days to Expiration: The maximum amount of time you may need to be in the trade Offensive Management: The opportunity to get more income from the trade Defensive Management: The protection against losses or assignment, when selling options Days to expiration is how long we need to manage the income on the trade. Ideally, especially when selling weekly options, we only need to manage the trade for a few days. If selling a monthly option, however, we may have up to 30 days to manage a trade. One active approach is to sell weekly options on Wednesday with a Friday expiration. That means we have about 2 days until expiration - so we're only managing our trades for about 48 hours. But, things happen in the markets. Even in just a 48 hour period. Which is why we must master the one tactic as the seller of options that the buyer cannot: Rolling the trade. Rolling is how to extend the trade. What is gained by extending the trade? 1. To eliminate the potential for a losing trade 2. To remove the potential of assignment (being "put" shares or having shares "called away") 3. To increase the amount of cash income on the trade 4. To buy time or extend time in a position, along with #3 above That's a combination of defensive trade management and offensive trade management. Defensive Trade Management is the art of eliminating losses, avoiding assignment and protecting capital. Offensive Trade Management is the art of extending the life of a position while increasing capital returns.
more thoughts on selling options Set Realistic Income Goals That You Can Easily Beat Use Your Portfolio to Make Money Every Single Week Know How Much Money To Use On Every Trade Find the Right Stocks To Sell Options On Manage Trades So You Can Prevent Losses and Get The Most Income Possible Every Week selling options and the many benefits over buying them. Here's the reality – chase those big winners and you'll lose money 75% to 80% of the time. Or, a consistent, reliable approach to income by selling options –every week. talk briefly about the smallest number possible. call it the "half-percent" solution. Understanding the math behind the .5% (half-percent) solution: Most investors, traders "measure" performance/success based on a single trade's "% return." Meaning: "I got a 100% return on the trade." If you're an income investor or trader, however, this is NOT the way to measure your success. Instead, you should measure your success based on your return on capital - that means how much money you made on your money. For example: Let's say you have a portfolio of $50,000. You actively sell options on your capital (all of it) every single week and at the end of each week you earn a half-percent (.5%) on your money. That's $250. Not much, But… if you collect that $250 EVERY week for a full year? That's $13,000 in cash income from a modest portfolio of $50,000. And that $13,000 – over the full year – an actual annual return of 26% on your money. That's the idea behind the .5% solution - to show you that you don't have to "chase" big winners to get seriously big returns. And the first step to succeeding with the half-percent solution is to set a minimum WEEKLY INCOME goal, then, find the right trades that either meet or beat that goal.