DailyWatch8292016

 

Today’s Markets

In Asia, Japan +2.3% to 16737. Hong Kong -0.4% to 22821. China flat at 3070. India +0.4% to 27902.
In Europe, at midday, London closed. Paris -1%. Frankfurt -0.8%.
Futures at 6:20, Dow flat. S&P flat. Nasdaq flat. Crude -1.5% to $46.95. Gold -0.2% to $1323.30.
Ten-year Treasury Yield -1 bps to 1.61%

Today’s Economic Calendar

8:30 Personal Income and Outlays
10:30 Dallas Fed Manufacturing Survey

Daily Market Summary

The S&P futures are trading at 2168 this morning. Traders will focus on U.S. economic data this week, payrolls data on Friday could sway expectations about the timing of a future interest rate hike and spark volatility in record-high stock prices. Continue reading “DailyWatch8292016”

DailyWatch 8262016

 

Today’s Markets

In Asia, Japan -1.2% to 16360. Hong Kong +0.4% to 22909. China -0.2% to 9743. India -0.1% to 27499.
In Europe, at midday, London +0.1%. Paris -0.1%. Frankfurt -0.2%.
Futures at 6:20, Dow flat. S&P -0.1%. Nasdaq flat. Crude -0.3% to $47.19. Gold +0.4% to $1329.20.
Ten-year Treasury Yield flat at 1.57%

Today’s Economic Calendar

8:30 GDP Q2
8:30 Corporate Profits
8:30 International trade in goods
10:00 Reuters/UofM Consumer Sentiment
10:00 Janet Yellen speech
1:00 PM Baker-Hughes Rig Count

 

Daily Market Summary

The S&P futures are trading at 2173 this morning. Alll eyes will be on Janet Yellen this morning as she speaks at Jackson Hole today.

spx 82616

Fed Chair Janet Yellen is giving her annual Jackson Hole speech today at 10AM EST. Continue reading “DailyWatch 8262016”

Daily Market Summary 8252016

 

Today’s Markets

In Asia, Japan -0.3% to 16556. Hong Kong flat at 22827. China -0.4% to 9761. India -0.8% to 27836.
In Europe, at midday, London -0.3%. Paris -0.7%. Frankfurt -0.9%.
Futures at 6:20, Dow -0.2%. S&P -0.15%. Nasdaq -0.2%. Crude +0.2% to $46.88. Gold -0.2% to $1326.55.
Ten-year Treasury Yield -1 bps to 1.55%.

Today’s Economic Calendar

Monetary policy symposium
8:30 Durable Goods
8:30 Initial Jobless Claims
9:45 Bloomberg Consumer Comfort Index
10:30 EIA Natural Gas Inventory
11:00 Kansas City Fed Mfg Survey
1:00 PM Results of $28B, 7-Year Note Auction
4:30 PM Money Supply
4:30 PM Fed Balance Sheet

 

Daily Market Summary

The S&P futures are trading at 2170 this morning. So far the scenario is playing out as we have written out in previous post, S&P down, crude down, gold down VIX up. We will expect to see some movement over the next couple days. We might see a little support around the 2070 level in the S&P as it is today’s support.

We have discussed the possibilities of severe drops in all major asset classes. I believe we will have a volatile late summer/fall.

Watch the dollar for strengthening that could lead to a drop in oil and gold.

Register for a $10 trial to Key2Options by clicking here $10 Trial 

To learn about State Modeling go to  www.Key2Options.com

Stocks on the Move

TEVA PHARMACEUTCL INDS ADR

  • TEVA- TEVA PHARMACEUTCL INDS ADR
  • STATE 8
  • YESTERDAY’S CLOSING PRICE $51.63
  • TARGET PRICE  $49.59
  • AVERAGE DAYS IN STATE 1- 20 DAYS
  • AVERAGE STATE 8 MOVE- 4%

 

 

DailyWatch 8232016

 

Today’s Markets

In Asia, Japan -0.61% to 16497. Hong Kong +0.2% to 22998. China +0.2% to 3090. India -0.01% to 27972 .
In Europe, at midday, London +0.61%. Paris +0.70%. Frankfurt +0.90%.
Futures at 6:20, Dow +0.3%. S&P +0.2%. Nasdaq +0.3%. Crude -0.80% to $47.03. Gold -0.01% to $1343.30.
Ten-year Treasury Yield flat at 1.56%

Today’s Economic Calendar

8:55 Redbook Chain Store Sales
10:00 New Home Sales
10:00 Richmond Fed Mfg.
1:00 PM Results of $26B, 2-Year Note Auction

 

Daily Market Summary

The S&P futures are trading at 2186 this morning.  A speech on Friday by Fed Chair Janet Yellen could settle the matter on if a September rate hike should be priced in. European markets are in positive territory after August PMI readings didn’t show significant Brexit blowback, with the Euro Stoxx 50 up 0.84% in midday trading. Continue reading “DailyWatch 8232016”

Daily Market Summary 8-22-2016

 

 

 

Daily Market Summary

The S&P futures are trading at 2177 this morning. Key2Options is based out of Tampa, Florida. This is the time of year when hurricanes come our way. Prior to the approach of a hurricane, the weather is beautiful, the calm before the storm. It feels very much like that in the markets right now.  S&P futures are trading down .25%. Continue reading “Daily Market Summary 8-22-2016”

DailyMarketSummary 8182016

 

Today’s Markets

In Asia, Japan -1.6% to 16486. Hong Kong +1% to 23023. China -0.2% to 3104. India +0.4% to 28123.
In Europe, at midday, London flat. Paris +0.1%. Frankfurt +0.5%.
Futures at 6:20, Dow flat. S&P flat. Nasdaq -0.1%. Crude +0.3% to $47.64. Gold +0.4% to $1354.50.
Ten-year Treasury Yield -1 bps to 1.55%

Today’s Economic Calendar

8:30 Initial Jobless Claims
8:30 Philly Fed Business Outlook
9:45 Bloomberg Consumer Comfort Index
10:00 Fed’s Dudley Speech
10:00 Leading Indicators
10:30 EIA Natural Gas Inventory
4:00 PM Fed’s Williams: Economic Outlook
4:30 PM Money Supply
4:30 PM Fed Balance Sheet

 

Daily Market Summary

The S&P futures are trading at 2177 this morning. We have not seen to much change in the markets since Tuesdays update. S&P futures are in a range between 2120 and 2190. As i wrote on Tuesday, we could see a possible rally to higher levels and possible even create a short squeeze. The S&P is in State 1. Continue reading “DailyMarketSummary 8182016”

Daily Market Summary 8-16-2016

 

Today’s Markets

In Asia, Japan -1.6% to 16596. Hong Kong -0.1% to 22910. China -0.5% to 3110. India -0.3% to 28064.
In Europe, at midday, London -0.3%. Paris -0.5%. Frankfurt -0.7%.
Futures at 6:20, Dow -0.1%. S&P -0.1%. Nasdaq -0.1%. Crude +0.4% to $45.90. Gold +0.7% to $1356.70.
Ten-year Treasury Yield -2 bps to 1.52%

Today’s Economic Calendar

8:30 Consumer Price Index
8:30 Housing Starts
8:55 Redbook Chain Store Sales
9:15 Industrial Production
10:00 E-Commerce Retail Sales
12:30 PM Fed’s Lockhart speech

 

 

Daily Market Summary

The S&P futures are trading at 2182 this morning. At Key2Options,  we look at price movement and time. Our thesis has been going as planned, the S&P is now getting close to ending its State 1 cycle. The average State 1 cycle is 35 days for the S&P. We are now 30 days into the cycle. Continue reading “Daily Market Summary 8-16-2016”

Volatility and Directional Trading Strategies

What type of Options Trader are you?

In options trading there are two types of traders: Directional traders and Volatility traders.

What does it mean? In short, if you are a directional options trader, you are basing your buys/sell decisions on the price direction of the underlying stock or index. A person who buys and sell stocks are also considered directional traders. Directional trading is the most common trading in the markets. You have two basic possibilities. You can speculate on an increase in an asset’s price – in this case you say you are bullish. Or you can speculate on a fall in an asset’s price and you say you are bearish. If you are a volatility trader, you are selling options to directional traders. Volatility traders want to sell options when they are overvalued. We will discuss how we know whether an option is overpriced later!

Stock pricing is cut and dry. The price of XYZ is $50 a share. Option pricing is a little more complicated. The primary drivers of the price of an option: current stock price, intrinsic value, extrinsic value (time to expiration or time value, and volatility). The current stock price is fairly obvious. The movement of the price of the stock up or down has a direct – although not equal – effect on the price of the option. As the price of a stock rises, the more likely the price of a call option will rise and the price of a put option will fall. If the stock price goes down, then the reverse will most likely happen to the price of the calls and puts.

As we noted, options prices are comprised of intrinsic value and extrinsic value. Intrinsic value is how much the option is worth regardless of other factors (extrinsic value). If you have a $25 call option and the price of the stock is $30, then you have $5 of intrinsic value. Extrinsic value is comprised of time and volatility. Option contracts have a specified time period. The shorter the duration of the option, the less that will be charged. The second component of extrinsic value is volatility. Every quarter, companies come out with earnings. This creates uncertainty because it is unknown what the company will announce. Because of this, option sellers raise the price of options due to the possible news associated with their earnings announcement.

Think of options as insurance. If I sell you car insurance for one day, it will be cheaper than for a whole year. Why, because you have a shorter period of time in which an accident can occur. As for the volatility aspect, the car insurance company charges more for a sports car than a minivan. The sports car goes faster and therefore is considered more likely to get in an accident and therefore more volatile.

Three economist created a mathematical formula called the Black-Sholes model for determining a theoretical value for option. Option prices can be priced higher or lower than theoretical value. In times of unrest, option sellers will raise the cost of options so high, that it is nearly impossible to make money buying options.

trader-type-ss

With our Key2Options Platform, we can scan for stocks that have high implied volatility (expensive) or that have low volatility (inexpensive). When Options are expensive, we want to be sellers of options (Volatility trader). When options are inexpensive during times of low volatility, we want to be buyers of options (directional trader).

Sometimes it’s better to be a directional trader, sometimes a volatility trader. It just depends whether the option is under or overpriced. Learn how to trade both ways with the Key2Options platform.

Always remember to Plan your Trade and Trade your Plan with Key2Options.

DailyMarket Sumary 8-10-16

Key2Options Market Summary

August 10, 2016

 

Dear Traders,

 

Fact or Fiction?

 

The S&P continues its grind higher. It is within a few points of our most aggressive target. Fact

 

The VIX is historically low. It is in State 8 and has reached our aggressive target. Fact

 

The markets has to go down because it’s overvalued. Fiction- Markets can go up and down without “proper reasoning.”

 

As you know at Key2Options, we deal with mathematics and do not listen to headlines as we believe that the prices are reflected in the underlying price. While we our reaching our targets in most of our major averages, the market can defy the “normal” ranges it typically trades in. So if you tell me the market goes past our aggressive targets, I would not be shocked. Continue reading “DailyMarket Sumary 8-10-16”

DailyWatch 8-8-2016

 

 

 

Today’s Markets

In Asia, Japan +2.4% to 16651. Hong Kong +1.6% to 22495. China +0.9% to 3004. India +0.4% to 28183.
In Europe, at midday, London +0.1%. Paris +0.6%. Frankfurt +0.9%.
Futures at 6:20, Dow +0.2%. S&P +0.2%. Nasdaq +0.3%. Crude +1.4% to $42.40. Gold -0.6% to $1337.
Ten-year Treasury Yield flat at 1.57%

Today’s Economic Calendar

10:00 Labor market condition index
12:30 PM TD Ameritrade IMX

 

Daily Market Summary

 The S&P futures are trading at 2180 this morning.

My last post from 8/3/2016:

The S&P futures are trading at 2149 this morning. We finally saw the first signs of a breakout on the downside yesterday. Futures traded down to 2141 before reversing in the afternoon and coming back to close right at its  previous support.
As i noted in previous post, often you will see a false breakout. Today and tomorrow should be interesting days to see whether the Bulls or the Bears are in charge.
Continue reading “DailyWatch 8-8-2016”