If a fifteen hour non-stop flight is not enough to tire out anyone, I had to deal with a snow storm in the morning and two hour drive back to hotel. But after a twelve hour rest, here I am, catching up with what happened while I was in transit.
Slope of Hope Blog Posts
Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.
Opex Seasonality (by Trade Flight Plan)
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Happy New Year! It may not be Open Season, but we are approaching January Opex Season. We bring you another episode in our fun game of Math-You-Won’t-Find-Anywhere-Else, only this time it’s Opex Seasonality. We compiled data from our Personal Trading Almanac to build a profile of how the major indexes perform on average each options expiration week. The data goes back 22 years and sniffs out the opex week price action from more than 5,500 data points. What’s interesting is that January Opex has one of the few bearish opex week tendencies of the year. Over the past 22 years, the S&P 500s closed opex week in negative territory 63% of the time. Of course, this year can very well be different. Employment is stabilizing, the markets are shrugging off Euro debt zones, and it’s an election year. But for those about to short, stay thirsty my friends… |
Expect the Unexpected?
The market, particularly the tech-heavy Nasdaq 100 (QQQ) continue to push higher this week. The rally that began on December 19th has barely paused for a breather. But, if you look closely at the last four trading days it seems as though we are setting up for a move lower as the ETF seems to be struggling with strong overhead resistance.
Most of the highly- liquid ETFs I follow have pushed into a short-term overbought extreme, with several actually reaching a very overbought extreme.
Typically, when we see this type of price action, that is an upside gap (1/3) into overbought to very overbought territory at strong overhead resistance, a short-term reprieve is to be expected.
However, if you recall, I expected to see a reprieve last week, but the gap in the tech-heavy Nasdaq 100 has yet to close.
Favorite Shorts Video
OPEX Breakout Coming?
Next Friday is Options Expiry. Looking at the Weekly charts of YM, ES, NQ & TF below, we can see that they closed the week at or just below resistance on higher volume, with Bollinger Bands widening, which suggests an upward continuation. In support of this suggestion, the Dow 30, Dow Transports, Dow Utilities, S&P 500, Nasdaq 100, and Russell 2000 all closed above their support levels that I mentioned in my post on January 10th.
If they break and hold above, they may make a run towards the upper Bollinger Bands on the charts below…each candle represents a one-month Options Expiry period…the current candle will close on January 20th. We'll see if they do break and hold above resistance, and how far they rally…alternatively, price may drop to the mid-Bollinger Band on either timeframe. Inasmuch as it's a short week, we may see daily opening gaps occurring from aggressive overnight trading with market makers running prices further up during market hours in order to reach such lofty targets.
Enjoy your long weekend!
