By Jeff Pierce

Both of these index charts could pullback to green moving average (68) and remain in a very strong uptrend. I’m not suggesting that is going to happen as the correction could just as easily be that of a sideways nature, but the markets will have to digest these gains one way or another.

The mere fact I’m even looking at Gold through bullish tinted glasses is a monumental shift in bias from the past 3 months. I don’t think it’s a buy here, but I think it could be getting close. Don’t interpret my hint as bullishness as an all out load the truck signal. Far from it.

Continue reading “Correction: Sideways Or Pullback?” »

By Chris Ebert

Stocks and Options at a Glance

With just one look, it is now possible to see exactly which option strategies are currently profitable and which are not. Those who use option performance as a technical indicator can now see where the stock market is today (as measured by the S&P 500 index) and where it is likely to go next, with a simple “You Are Here” marker.

*All strategies involve at-the-money options opened 4 months (112 days) prior to this week’s expiration using an ETF that closely tracks the performance of the S&P 500, such as the SPDR S&P 500 ETF Trust (NYSEARCA:SPY)

You Are Here – Bull Market Stage 1

Stocks are now in Stage 1 of a mature bull market. Bull markets tend to progress from stage 0 to stage 5 and then Continue reading “Options Indicate Bull Market Stage 1 Underway” »

By Jeff Pierce

Below are 3 stocks that popped up on my momentum scans yesterday that you may be interested in if you trade breakouts. I especially like EGLE as it’s an earnings move that had a massive gain. This will likely be higher 4-6 weeks from today.

Never mind that they are pulling back a little today as that is normal profit taking action after stocks breakout.

Continue reading “Three Breakouts To Watch” »

By Chris Ebert

I’m not telling folks anything they don’t already know. The current rally in the stock market is simply too much of a good thing. But when everyone else gets caught up in the buying frenzy, it can make those who doubt the current rally’s sustainability second guess themselves.

Ask yourself, “Does the current level of the VIX accurately represent my level of fear?” For all of you who know there is something not quite right going on, but can’t quite put your finger on it, I give you the LSSI (Long Straddle/Strangle Index).

Click on chart to enlarge

The LSSI is normally published here weekly. Take a look at the chart. See how long the LSSI has been above zero? (since late February). Now look at how long the LSSI has historically remained above zero. (seldom more than a few months). And what causes the LSSI to fall back below zero? A correction in the S&P 500, typically at least a 5% to 10% correction.

A positive LSSI has a habit of preceding corrections in the S&P. An LSSI exceeding 4% is especially significant, and today the LSSI stands at +4.8%. Will the S&P break its 10-year habit? More importantly, do you want to bet on it?

Questions, comments and constructive criticism are always welcome. Enter them in the comment box below, or send them to OptionScientist@zentrader.ca.

The preceding is a post by Christopher Ebert, who uses his engineering background to mix and match options as a means of preserving portfolio wealth while outpacing inflation. He studies options daily, trades options almost exclusively, and enjoys sharing his experiences. He recently co-published the book “Show Me Your Options!”

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