May 302015
 

Market Conditions

The short holiday trading week resulted in another fairly rangebound period for equities. The market has remained in a channel of sorts since February. The S&P 500 opened on Tuesday at 2125.34 and closed Friday at 2107.39, down 17.95 points or 0.84%. On Tuesday, each of the major indexes were down by at least 1% due to better-than-expected economic data that put interest-rate hike worries back on the front burner. April new-home sales rose 5.8% to 517,000 (509,000 expected) and are running much higher than last year. Orders for durable goods and May consumer confidence data also came in better than expected on Tuesday. On Wednesday, equities enjoyed a daylong rally that helped erase most of Tuesday’s losses amid reports that Greek officials and Eurozone members have started crafting an agreement to secure funds for the country. The Nasdaq surged after it was reported that Avago Technologies (AVGO) is in talks to acquire Broadcom (BRCM). Economic news was mixed Friday with consumer sentiment for May coming in slightly stronger than expected. The first quarter GDP was revised to indicate a 0.7% decline.

Chart_053015_SPX

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May 272015
 

Today was an active trading day establishing 3 new positions and closing out one existing position. Two of the positions that I entered today may seem a bit unusual as they do not fit the typical trading pattern that I have followed since beginning this blog. After tweeting out the trades, I received several comments which prompted me to offer more detail than can be accomplished through Twitter.

SkyWest Airlines (SKYW)

CRJ700-2-1The first trade that I placed this morning was in SkyWest Airlines (SKYW). This is a company that I am intimately familiar with having been previously employed by SkyWest for nearly ten years as a pilot. It is a very conservatively managed company which has allowed it to flourish and become the top regional airline in the industry. On April 30th, it announced its first quarter results which significantly beat estimates sending the stock up by over 18%.

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May 252015
 

LTOptions-LogoSeveral months ago I published an article entitled, Trading Mentors. In this post, I outlined not only the importance of having a trading mentor, but also the dangers of blindly following another persons trades without fully understanding what they are doing and why they are doing it. The article also provided links to a select number of websites that, in my opinion, offer great educational content for new and seasoned traders.

One of the websites that I recommend is The Lazy Trader (www.the-lazy-trader.com). Authored by Henrik Santander, The Lazy Trader has grown to become one of the most popular option-trading websites on the internet. Henrik’s trading methodology involves the selling of credit spreads and iron condors on the large indexes utilizing a very low-risk model. He posts all of his trades on the website as well as a weekly review of his entire portfolio.  In fact, Henrik’s blog is what inspired me to create my own website. Continue reading »

May 232015
 

Market Conditions

It was a pretty quiet week in the markets leading into the Memorial Day Weekend. The S&P 500 remained range-bound opening on Monday at 2122.73 and closing Friday at 2126.06, up 3.33 points or 0.2%. On Wednesday, the FOMC released the meeting minutes revealing that some participants believe that the weakness observed in the first quarter could extend into the second quarter with many officials characterizing a rate hike in June as “unlikely.” However, the minutes did not rule out a near-term rate hike in its entirety. Ms. Yellen stated that in order to begin normalizing policy, the Fed needs to see continued improvements in labor market conditions and there needs to be reasonable confidence that inflation will move back toward the 2.0% target over the medium term.

Chart_052315_SPX

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May 162015
 

Greetings from Dallas, Texas. The weekend review is delayed due to the fact that I have been traveling for the past few days and do not have my normal arsenal of blogging tools at my disposal.

Market Conditions

The market ended options expiration week on a flat note with the S&P 500 index (SPX) opening on Monday at 2115.56 and closing Friday at 2122.07, up just 6.51 or 0.3%. The markets have been trading sideways now for nearly all of 2015. Economic data released early on Friday disappointed and weighed on sentiment, however that was eventually offset by increased expectations that the Fed will delay raising rates in the near term.

Chart_051615_SPX

As seen on the chart above, the SPX is exhibiting some strength having closed on Thursday and Friday above both the 21-day EMA and the declining trendline. However, it has not yet been able to take out the previous intraday high of 2125.92.

The Russell 2000 (RUT) has exhibited the most weakness of the major indices. This week it recovered some of its recent losses. Similar to the SPX, the RUT has broken above its declining trendline with the last two closes on Thursday and Friday above the 21-day EMA. It has yet to break above the resistance at the 50-day SMA.
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