Expert technical analysis of financial markets by JC Parets
What a difference a couple of days makes!
The froth has definitely come off the $VIX spike over the past week. Does this mean we’re all clear? Well, no. Not necessarily and not yet.
But it does give us a little bit of confidence that some short-term lows can be leaned against as good risk management levels when taking long directional bets.
There’s still some juicy premium to be sold when looking at some sector ETFs and that brings me to the Biotech sector ETF $XBI. [Read more…]
Options premiums still remain elevated across the board and therefore I continue looking for delta-neutral premium-selling strategies to implement.
We have to take whatever the market is offering. The recent downward price action has created a bunch of resistance levels to lean against on the upside. So I want instruments that also have clearly defined support levels and high premiums for us to sell.
This leads me to… [Read more…]
While volatility remains elevated, I remain on the hunt for appropriate vehicles to sell premium in.
We sold premium in IWM earlier this week. Today, I’m going to drill in a little deeper into sector ETFs that are displaying the highest relative implied volatilities. This search leads me to the finance sector.
[Read more…]
I got all excited when Russell 2000 — as measured by $IWM — broke higher out of the 8-9 month range back in early November. To me, that felt like a big sign that stocks on the whole were about to go on a big bullish run into year-end.
Well, the sad trombone has been played and the breakout was short-lived. And as you can see from this chart, $IWM in recent weeks has completely retraced the breakout and has fallen right back into the middle of the previous range:
Man, what a letdown — for the bulls.
But us options traders over here smell an opportunity! [Read more…]
JC and I traveled to India together a couple years back to meet with Indian prop and options traders and to lead discussions at a few events. It was an amazing experience to be able to view risk through the eyes of traders that come from very different backgrounds than our own.
It should go without saying that we indulged (perhaps overindulged?) in the local cuisine. To be honest, we ate like Kings and it was wonderful. Everything we ate was fantastic and I want to go back as soon as possible. It was such a great time with great people.
So, when perusing the latest crop of new ideas cranked out by ASC team, one name with an Indian flavor caught my attention. [Read more…]
Given an opportunity, JC will gladly talk your ear off about proper wine pairings for your Thanksgiving meals. No matter your flavor or preference, JC can find something that works. After all, he did get his sommeliers certification.
During this morning’s analyst meeting, we were discussing what trade we wanted to put on today and we had two great ideas. We debated the merits of each, and we couldn’t decide which one we liked best right now.
Stock 1 or Stock 2?
Bills or Dolphins?
Gators or Hurricanes?
Cats or Dogs?
And then in typical JC fashion he said:
Why not both?
And my response was: “Of course! Why not? We’ll call it a Thanksgiving Pairing!”
So here we are. [Read more…]
This past weekend, I finished reading an illuminating book titled “Empires of Light” (see what I did there?), that dug into the origins of modern electric power as viewed through the lens of the first titans of industry to bring it to the masses: Thomas Edison, George Westinghouse, and Nikola Tesla. It was a fantastic read. And one that hit home due to the fact I grew up less than 20 miles away from Niagara Falls, a location which figures prominently in the birth of the nation’s electric grid and modeled how to spread electricity transmission throughout the world.
So, it must be kizmit that the best idea on the table for me to choose from today comes from the energy space — a $170B company that generates, distributes, and sells electric power to customers in North America.
Wednesdays are becoming my favorite trading day of the week.
What the heck is so special about Wednesday? Well, nothing really. But it’s the day when all the All Star Charts analysts converge on a weekly internal zoom call and throw out our best observations and ideas. We start identifying themes. What’s new? What’s old? Where aren’t people looking? Where are our blind spots? What would have to happen for us to change our view? What’s the best music to listen to while charting and strategizing? (I prefer anything instrumental — no singing).
Now, to be fair, when the nerds start geeking out about currency pair relationships and long-end versus the short-end of interest rates, that’s when I pretend to be listening and interested. But when the conversation comes back around to individual stocks, that’s when my ears perk up.
So, today, when it came around the horn to me, I mentioned to the guys that I’m really liking this setup in Valvoline $VVV that the team highlighted in their most recent Young Aristocrats report. [Read more…]
