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Mixed Options Trading Signals Leave a Market Uncertain

Options Trading — Tue, 03 Aug 2010 14:00:07 +0000

Options trading signals showing a mixed market today. While the quick runup of the last few days has had everyone talking the steady movement upwards has been the hallmark of an all too familiar pattern of late. Basically this has been market movement upwards on no volume a.k.a. manipulation. Just like all the other times we’ve seen this pattern most everyone is expecting a precipitous drop… but who is going to throw the switch? Will it be today or tomorrow? From what height will the fall come? Yesterday’s 2.26% climb in the S&P 500 caught more than a few people off guard but retails continue to remain on the sidelines because they know a sham market when they see one. Like most days when our economic bias is negative, we’ll be looking for forex trading risk negative as our “go” switch. Favored trade (particularly with the near term low in the VIX) is the SPY and DIA puts. If we get a drop in the market gains will be multiplied by the corresponding increase in volatility – practically a given at this point due to the lack of retail participation on the buy side. For those not able to pick [...]

Binary Options Trading Hot Puts on a Rising Market

Options Trading — Mon, 02 Aug 2010 13:27:02 +0000

Binary options trading of puts will be the hot play I figure if market activity holds form. The market / S&P 500 is poised to jump close to a percent and a half based on pre-opening activity; forex trading is showing risk positive pre-market. If recent trading history follows form the market will open basically at the pre-market levels then fall over like a rotten leaf somewhere around 10am. As per normal we’ll be following the forex trading markets for signs of the el-floppo towards risk negative. That will be the opportunity to buy the put side of the binary hedge and double trade we like to try to setup. The plan then is to leave that trade open until we see the risk on switch in the forex market again. With any luck two $200 trades will fall in the money and make $300 a day net profit. That is the idea after all. Stock Market and Currencies in Holding Pattern The stock market and the forex markets remain in a holding pattern established soon after the open this morning. Much like the Cold War detente of the 1980s nobody is blinking. We expected a significant distribution opportunity this [...]

Day Trading Forex Market Monitor

Options Trading — Thu, 29 Jul 2010 13:55:33 +0000

No day trading forex market disconnect between risky cross pairs and the S&P 500 at the open this morning… they may be on to me haha. To make money doing this stuff I wait for what others have called de-coupling and then I jump in. Not seeing anything yet this morning, but given the strong performance of the major US market indices the obvious thing to look for is the Greyhound bus about to run everyone over. Will be keeping an eye as usual on the risky cross rate pairs for down-turn and try to get in ahead of the wave, otherwise standing pat. Options trading this way requires anticipation and discipline – if I don’t like or have an understanding of what I see – I have to stay out. If you were following the forex markets vis a vis the S&P 500 this morning the word is: Clockwork. Continue into afternoon trading seeing risk plus come back on with a likewise softening of the (at one point) 100 point drop in the Dow. We’re watching the impact of the Treasury auction again today. It’s very important to be mindful of when the treasury auctions will occur and (more [...]

S&P 500 Market Read on Forex Trading Open

Options Trading — Wed, 28 Jul 2010 14:10:29 +0000

Our read of the S&P 500 at the open is decidedly negative given the risk-off signal coming from the forex markets. Given we opened more or less level / near zero we see binary options trading put open as the play. We’ll see where that goes and keep an eye out for Jesus the Miracle Goaltender at the end of the day. Nearing lunchtime and forex trading risk chart looking worse than am. This can’t be a good day although USD weakness vs. EUR and Yen probably helping the S&P 500 tread water. Nasdaq already tanking. US Treasury Bond Placement Causes Binary Options Signal Heartburn Let today be a word of warning to you – this has caused me heartburn twice now but during US Treasury Bond auctions the forex market just plain goes haywire when funds are drawn from purchasing banks, primary dealers etc. Last time I saw this I got spooked but held my cajones, today I saw it coming and let it ride. It was actually rather nice to see the uproar in the forex trading right about when it should have been messed up. Now we just have to dodge Jesus at 3:30pm. Sponsored Link Note [...]

S&P 500 Falling – Why All the Apple Stocks in the World Won’t Fix Broken Cart

Options Trading — Wed, 21 Jul 2010 15:48:39 +0000

The S&P 500 is falling today despite Apple’s good earnings results last night. What gives? If you’ve learned anything from reading our opinion / analysis pieces is that individual equities do NOT drive the market. The forex and derivatives money pool is so much deeper than any security that I wouldn’t care if Apple reinvented the internet in it’s own image… it would not move the market. Forex Market Morning Outlook Having said that, the forex market is looking pretty glum this morning. Prevalence of strong yen and weak carry trade crosses means we read that as a “market down” signal. Gee.. the S&P 500 is down. Who’ddathunkit right? I’ll have a couple of pictures/charts to put up today which ought to give you a big clue as to where the market activity is these days. Don’t despair when you see the charts, however – as we see trading opportunities to make money all over the place – even though most retail traders are avoiding this market like the plague. Have You Subscribed to Free Our E-Newsletter Yet? Get Trading Ideas Sent Right to Your Email Inbox as We Come Up With Them - Free!Also Don't Miss Out on the [...]

Strong Yen Won’t Make Money on S&P 500

Options Trading — Mon, 19 Jul 2010 13:50:43 +0000

A strong Yen this morning will not make money for the S&P 500 and will likely begin reigning in the S&P 500 gains given at the open. Earnings season continues to generate trading opportunities. Overnight weakness in the Yen makes allowances for some of the bounce off of Friday’s lows but post-US open forex trading is indicating a reversal is in the cards. Strong euro overnight and at open is opposing the Yen move and appears dominant for the moment. I am watching for rising VIX and euro turn (weakening) as confirmation. Early Forex Trading in Yen Throws Us Our Bone Well the forex trading in Yen was kind enough to throw us our bone in the way of an intra-day peak in the S&P 500. We had our pick in at S&P about +0.6% on the day from which it has fallen to about neutral at noon EDT. We’ll be watching the Yen for weakness (not counting on it at this point) or falling VIX from this point (anything can happen there) as a signal to run our binary option hedge and will otherwise stand pat and ride out the day. Hope you are hitting your marks as well. [...]

Day Trading Earnings Season – Why I Love It

Options Trading — Fri, 16 Jul 2010 13:51:37 +0000

Day trading during earnings season has a lot to offer the broad spectrum / index trader. One of the great ways to work the market during earnings season is to work the re-coupling of indices to their macro drivers when they get pulled out of whack by microeconomic (individual) earnings reports. It’s rather beautiful to watch the market in action, pulling the daily outliers back to the mean. The sheer overwhelming weight of the index (and the fund money behind it) ultimately pulls itself back up toward zero from whichever direction any individual security is pulling it. What Does That Mean for Day Trading Today? Like always, we watch the forex markets (by far larger mass/volume than any other market) and let it forecast where markets are likely to head. Today our forex diet began at the open strong Yen and dollar – bad news for the S&P 500 – so we see markets falling. And like a well behaved pet, lo and behold we see the markets fall. The way we then use our favored binary options hedge is we look for a change in the forex market (once retail trading is open), and then we simply jump on [...]

Weak USD Pre-Market Makes Favorable S&P 500 Open

Options Trading — Thu, 15 Jul 2010 13:29:28 +0000

A weak USD vs the major forex trading pairs making for a positive open on the S&P 500. Futures are up slightly just prior to the bell. I will be watching the VIX in addition to the usual forex crosses to determine market direction today. My instincts tell me VIX falling today keeping S&P 500 up. The forex market crosses aren’t clearly pro-risk or anti-risk so I have to admit I’m not 100% what’s the motive force behind the cross rate activity pre-market. After the open we’re seeing strong anti-risk in the fringe cross pairs (NZL, AUD, etc.) yet also seeing strong EUR and weak USD (protending relatively favorable risk enviro). What is dominating trade this morning however is the Strong Yen (was mixed pre-open, now strong). This is presently driving the S&P 500 down. I am looking for a Yen reversal (weakening) as an opportunity to pick up binary option calls on my favorites, DIA and SPY – staying out until I see a S&P 500 bottom combined with peak in VIX and Yen. Forex Trading Action Reversal Looks like the market turned around 1:30pm, were you paying attention? I’m normally one to setup trades in advance, set trades [...]

Key Forex Trading Crosses Drop on Retail Sales Number

Options Trading — Wed, 14 Jul 2010 13:12:21 +0000

Risky forex trading crosses fell pre-market after the retail sales number (-0.5% vs. -0.3% expected) – making for a likely down start for the S&P 500 this morning. Although the futures market reaction has been muted early the gap down is widening as I am typing this. I will be watching the usual suspects, EURJPY and USDJPY this morning for further direction in the binary options markets. Strengthening Yen appears to be dominant this morning, if that continues after the open we can bet on a further fall in key US stock indices. USD strength versus risk forex trading pairs CAD, AUD, and NZL also indicating risk aversion (likely continued falling indices if trend continues in opening half hour or so in binary options). Forex Trading – Yen Reversal Propping Markets Up Markets reversing earlier losses in tandem with falling Yen. Given the earlier gap down pre-market we are expecting a lower close for the day but we also understand that we follow the forex markets first and foremost. Falling Yen may help us find a peak somewhere just north of 1100 on the S&P 500 which is where we’re looking for the Yen to strengthen (signalling turning point for [...]

Strong Forex Market in Pre-Market Options Trading

Options Trading — Tue, 13 Jul 2010 13:19:58 +0000

Sponsored LinkOptions trading looking up as strong forex market appetite for risky currencies is driving S&P 500 and major US market index futures higher this morning. Retail traders obviously won’t get the opportunity to participate in the morning pre-market rally – so instead we’re lurking on the sidelines with an eye on the forex market. At the open we’re looking for decisiveness in the retail forex market to determine what the post-open movement will be. Yesterday we say the pre-market activity acting against the retail trade however it is looking like both retail and institutional investors are on the risk-positive side. As always, looking carefully at the risky currencies AUD, EUR, CAD, and NZL versus USD, CHF and Yen. Strong USD, Yen, (and to less extent) CHF look for S&P 500 reversal. Otherwise it’s going to be a strong Up day. As before, our overall intermediate term bias remains negative – a market high today may provide an opportunity to pick up a longer duration put option as a “flash crash” hedge. Once you own it leave a trade trigger (or trailing sell order) on it for a tidy gain should May 6th repeat itself and forget about it. Premiums [...]