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I had fixed 60min sell signals yesterday morning on ES and TF, and a weak RSI 5 sell signal on SPX. The TF signal made target but I’m wondering if SPX and ES will need a bit more retracement today. If so I’ll be watching the 50 hour MA at 2284 and the open gap into 2280.85 for support. On the upside rising wedge resistance is now in the 2312 area. SPX 60min chart:
Two quick early-morning items. First, it’s good to see crude continuing to weaken. The grand and glorious goal is a break of support (green tint), since we’ve been range bound for two solid months now. As I’m typing this, it’s actually lower than the chart below, down over 1.5% now.
Second, I’m in make-fun-of-SNAP mode these days, because I think it’s an IPO designed for buffoons who thought 1999 never happened, so I found this little snippet from their S-1 kind of fitting. Click the image to see a bigger version.
No, it’s really there. It’s on page 110. Honest.
Just a quick post before I head to bed – – the USD/JPY is key to watch. Weakness here will continue to be of aid to equity bears. I’ve also got a short on DXJ, which obviously also needs the Yen to play along. This has nothing to do with any of that, but I’ll just say in passing energy is increasingly my favorite sector, with more of my shorts concentrated in that zone. Anyway, here’s the USD/JPY:
Before we discuss the basic of options parameters for trading, we need to understand the concept of volatility. This is not simply an observational number, thought it can be used as such. In general stock investors want to avoid volatility. They want to minimize the standard deviation of their investments, as large drawdowns can be petrifying to some. This is a reaction that encompasses more than trader psychology; when the broker taps you on the shoulder with his margin call, it really is game over for you. This can be unfair, but those with the gold set the rules.
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Watch $800 on AMZN. If it breaks, look out below. Not that its P/E ratio of 184 isn’t a deal.
