Grinding Higher into Friday Jobs

Tops are a process and bottoms are an event. The topping event continues to unfold today as the SPX continues to flat line at all time highs. The first place to look for the market to go is to test the break out level. From there we will know a lot more. Let's also take…

Are the Central Banks Losing Control?

Another muddled day from the markets. There's so much liquidity that volatility is being squeezed out of the markets. The question we have to ask ourselves is what happens when the markets turn their backs on central banks around the world? At some point can the central banks throw everything they've got at the markets…

Signs of Volatility and a Trade Setup

Signs of volatility slowly slipping into the market. The overall market continues its sideways move as it has over the last 2 weeks. Tonight let's look at a few canaries in the coal mine and a trade set up...

Market Shrugs Off Bad Data

Even if you think bad news is good news because the Fed will start another round of QE the risk continues to be to the downside. I've made my entire trading career around selling volatility and collecting premium. I have never seen volatility this low. With all the risks out there in the market you…

AMZN and GOOGL Earnings Trade Setups

After hours today AMZN & GOOGL reported earnings. Both companies beat their expectations and have moved close to 1 standard deviation to the upside. As we have talked about if you look at earnings trades over 1000s of occurrences there is no statistical edge in Iron Condor trades. However, there is an edge in placing…

Meet the New Boss, Same as the Old Boss

Earnings season in full force as stocks like Facebook rockets higher based on earnings news. There was little news from the Fed announcement today. The market has become sensitized to the veiled threats of increasing rates. If we look at the Fed watch tool we can say market is expecting a low probability of a…

Historical Volaility on the Rise, Volatility is Still Alive!

Index products are converging with one another and this yet another example that we are about to enter into a period of extreme volatility. Let's take a look at historical volatility over the last 20 years. Notice that all of the "all time highs" in the last 20 years also had just entered a phase…

What to Expect in AAPLs Earnings

It's earnings season and we kick off with the grand daddy of them all - AAPL! Many think that around earnings you should only sell premium. That is plain old stupid advice given by those that don't know any better. Let me tell you right now that trading earnings is not a bathrobe. One size…

Theoretical vs Historical Probabilities

Earnings season has kicked into high gear. How do you know whether or not to sell premium on high implied volatility stocks going into the earnings announcement? The trading technology out there focuses only on theoretical probabilities. However, what if you looked the actual historical probabilities based on historical data? Would theory match reality? TheoTrade…

Matching Strategy to the Market Character

There are two types of market that we have seen over the last several years. They have been either quiet and trending or sideways and volatile. It seems to me that markets may have broken out in another quiet and trending market. With volatility we like to use a combination of calendar spreads and directional…