I just don't see much chance right now of much more than 30 spx points higher from here. and after that, if the market even advances that much from here,my guess is the market goes into a tight range of bouncing up and down for several months between 2200 and 2300 on spx. writing calls might be a profitable strategy for the next few months. so many measures are so stretched. the market needs to refresh itself for a while, clean out some late-money bulls, then we will have rally potential again. if you don't trade here, you will probably be treading water, but you lose if the declines are deeper than the rallies, i.e. where the market stair-steps lower. i am holding on for those last thirty points but will turn tail very quickly on a gap down that turns into a downtrend day or a rally that can't hold its gains. if spx approaches 2300, I will consider it a gift and will let others take the risk at that level. note to self: how much money have I lost waiting for the last 1%? there should be at least 2 or 3 times this year when the risk/reward is much more favorable than it is now.
Limited upside for now
#2
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Posted 06 January 2017 - 09:27 AM
30 SPX points are > 100% in a UVXY put
Edited by Harapa, 06 January 2017 - 09:27 AM.
My comments are for entertainment/educational purpose only. All posted trades are fake (aka. paper) trades.
#3
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Posted 06 January 2017 - 10:12 AM
30 SPX points are > 100% in a UVXY put
true, but who knows if we get the 30 points? for me, that put has lots of risk, but on the other hand, at least you know your maximum loss. i just don't like the risk of needing to see a certain amount of movement in an index in order to avoid a 100% loss in a position. what about selling a vix call short and limit your risk being long a more out of the money call? you make money if the market advances modestly or even in a dull market.
#4
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Posted 06 January 2017 - 10:43 AM
what about selling a vix call short and limit your risk being long a more out of the money call?
There are many ways to skin the cat ( as they say)...I leave operational details for the operators...
OTH...If you can stomach some short term gyrations, holding IT/LT (3-12 month expiration) PUTs is nearly a fail proof strategy...
My comments are for entertainment/educational purpose only. All posted trades are fake (aka. paper) trades.
#5
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Posted 06 January 2017 - 10:45 AM
i was planning to reduce my positions on a 15-point spx advance but only if such advance was accompanied by deteriorating (for the bulls) put/call ratios. but what seems to be happening is a market that remains firm where option players, at least in this first hour, appear to distrust the rally. if this pattern continues today, i will feel better about being long the indices (very long) over the weekend. i might even add a little more here in the next hour if present conditions persist. but it would be very easy for some selling to come in the next two hours, so i am cautious in adding any more, which would be only a day trade. i hate losing on a day trade more than on a positioned trade. but this does not change my opinion that this market doesn't have much left in it for a while.
#6
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Posted 06 January 2017 - 10:57 AM
that this market doesn't have much left in it for a while.
That is what most people think...contrarian (inside me) says otherwise...
My comments are for entertainment/educational purpose only. All posted trades are fake (aka. paper) trades.
#7
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Posted 06 January 2017 - 11:00 AM
YM appears to putting pivot at 19,800 here today...as long as it holds, one more leg to the upside still in the cards.
If it doesn't, and we take out today's low, then maybe corrective action finally begins in earnest...
The strength of Government lies in the people's ignorance, and the Government knows this, and will therefore always oppose true enlightenment. - Leo Tolstoy
#8
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Posted 06 January 2017 - 11:06 AM
Another less than stellar A/D line on NAZ on a up day.
If it closed right here, would be enough to roll NAZ summation back over....
The strength of Government lies in the people's ignorance, and the Government knows this, and will therefore always oppose true enlightenment. - Leo Tolstoy
#9
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Posted 06 January 2017 - 11:19 AM
we all have our predictions, but the most important thing is how we respond to changing conditions, especially where we get it wrong. how often are you dead wrong but manage to make money or are dead right and don't make anything? it happens. what I see in the posts here is a recognition that we must monitor things closely, at least for those of us who trade frequently. the market may have a lot more upside; i just feel the stretched condition of many/most indicators requires at least a breather, if not more.
#10
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Posted 06 January 2017 - 12:12 PM
So far, so good. Intraday put/call numbers staying generally favorable. A close here would be ATH at least for the SPX. I have a hard time seeing the market peak here with the existing sentiment among option players. But these can change very quickly, especially when you have other sentiment indicators that are stretched to the upside. I will still be thrilled if I am able to close out my existing positions around spx 2300. 22 points to go. My bet is that we will do so before much of a pullback. I think the market needs to punish the bears a bit more, make them question themselves and their methods.
