Mar 282015
 

Market Conditions

This past week the market traded down four of the past five days with over a 30-point drop on Wednesday. The SPX opened Monday at 2107.99 and closed Friday at 2061.02 down 46.97 or 2.23% on the week. The SPX is now up just 2.12 points or 0.1% for 2015. The other major indices also experienced significant declines with the NDX down 2.72%, the DJIA down 2.34% and the RUT showing the most strength declining only 1.88% on the week. The RUT also hit a new high on Monday before beginning its decline.

Chart_032715_SPX

The Durable Goods Orders report on Wednesday rattled the markets when it posted a 1.4 % decline rather than the expected 0.2% gain.  With the manufacturing and housing sectors in the U.S. showing weakness, coupled with the growing conflict in the Middle East, and the impact of a global credit crisis from emerging markets, there are enough events that could continue to upset the markets over the next few weeks.

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Mar 272015
 

The short-lived increase in volatility this past Wednesday offered great opportunities for the disciplined and mechanical trader. On the other hand, it also presented great challenges to those of us that were holding short put options set to expire on Friday.  The past couple of days put my trading skills to the test. I failed miserably in what was ultimately a test of psychological and emotional control.

This article is a postscript to “Catching a Falling Knife” where I documented an NDX trade that I poorly executed earlier this week. In this post I will be detailing the thought process behind my second trade failure this week which occurred in SPX and will likely result in an overall loss for my trading during the month of March.

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Mar 252015
 

Today I did something stupid… I tried to catch a falling knife. I’ve got a bulletin for all of you – it hurts! No, I didn’t really try catching a falling knife. This is simply an analogy for what I did do today, which was equally unimpressive. Allow me to walk you through my thought process (or lack thereof) as I got into and eventually out of a trade in the NDX this morning. Here is the trade I tweeted out this morning just after the market opened:

I have had a lot of success lately with the weekly SPX credit put spreads that I have been trading. In an effort to diversify a bit, I started looking at also employing a similar strategy in the NDX.
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Mar 212015
 

Market Conditions

This week the market traded up strongly with the SPX opening the week at 2055.35 and closing Friday at 2108.1, up 52.75 or 2.57% on the week. This week the SPX regained all of the losses of the past two weeks. Much of the rally was attributed to Wednesday’s statement by the Fed that it has dropped its “patient” stance, but lowered guidance for any future rate hikes. Janet Yellen emphasized that while the Fed was dropping the word “patient”, it wouldn’t be “impatient” to raise rates. A slower economy, the strong dollar, and low commodity inflation contributed to the Fed’s more dovish stance. The concensus among traders is that a rate hike might occur later this year or early next year.

Chart_032015_SPX

The markets overall are continuing to exhibit bullish tendencies as the small caps lead the way to new highs. All of the major indices are significantly above their 50-day moving average and flirting with all-time highs. The RUT did close at a new all-time high this week of 1267.22. It’s normally a good sign when small caps hit new highs first.
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