This Market Calendar works like clock-work and is your primary basis for trading decisions. It provides the "biggest picture" of what the market is doing, and is to be followed regardless of whether we are in a Bear or Bull market.
As a note: it says late October is a "good time" to buy vault stocks, but the prime time of the year to buy Vault stocks can come as early as late July. Late October is simply the latest in the year you should buy vault stocks, as the market almost always rises from here into January.
January to February
EARNINGS Season. Excellent time of the year to make money in the stock market (to the up side or the down side). A monkey can throw darts at the market and make money. Do not confuse this with talent or ability. Expect profit taking in mid January AND in mid February (ie: if the market was going up, expect a decline, and vice-versa). Look for heavier profit taking at mid February through the end of February.
March
WARNINGS Season. Look for a small pop after sell-off in February very early in the month. Generally a tough, tired stock market. Look for call entry points between the 15th and the end of the month, especially the last few days.
April
EARNINGS Season. Generally good month (to the upside). From the 1st through the 10th look for a rising market. From the 10th to the 20th expect a sell off for tax season (the sell off can last one days or all 10 days, but it will happen during this time frame). From the 20th through the end of the month, most stocks will be stable to up.
May
EARNINGS Season. This is a 50/50 month. From the 1st through the 15th, stocks trend upward as we finish up earnings. From the 15th through the end of the month, expect heavy profit taking.
June
WARNINGS Season. Tough, tired-acting market. Look for call buying opportunities using charts between the 7th and 22nd of the month. The summer months can be very choppy or just plain dead, be prepared for either. The summer months almost always have very low volume; most traders live by the adage of "sell in May and go away." Watch for call buying entry points the last 2 or 3 days of the month.
July
EARNINGS Season. Can be good (to the upside) but look for profit taking mid-month. Another summer month; generally a choppy time in the markets. Use the profit taking in mid month to look for entry points on the charts (especially on stocks with AUG earnings or splits).
August
EARNINGS Season. Earnings ends quickly. Usually a choppy market with a negative bias. Look for heavy profit taking. Look for a sell off in the last 10 days of the month. Watch the charts for buying entry points during the last few days for the post Labor Day bounce.
September
WARNINGS Season. Sometime during the first 10 days look for an upward pop in the market followed by a hard sell off. This pop is the post Labor Day bounce. The moves will usually be dramatic (both the pop and the sell off) and will both usually be intra-day moves, rarely lasting more than one trading day. September usually stinks after the 10th. Look for buying opportunities (for calls OR puts) on the charts the last few days of the month.
October
EARNINGS Season. This is a scary time in the market, as most major crashes happen in October. Part of this is due to the fact that mutual funds must sell their losers by the 30th of October for tax purposes, causing a lot of downward pressure on the market. Play with caution, taking profits quickly. Look for entry points (for calls OR puts) on the charts during the last 3 to 4 days of the month. The last few days to a week are generally a great place to purchase vault stocks (watch the daily and weekly charts for this purchase decision).
November
EARNINGS Season. If there is no October crash, the markets will rise dramatically the first 2 to 3 weeks. Look for HEAVY profit taking from Thanksgiving through the end of the month.
December
WARNINGS Season. Expect HEAVY profit taking from November to continue until between the 5th and 8th of the month. Look for buying opportunities (for calls OR puts) on the charts around the 5th to the 8th. December can be a good month (ie: a rising market). If it is a rising market, it is known as the Santa Clause Effect. The market can be choppy. Look for major buying opportunities (for calls OR puts) on the charts between the 15th to the 22nd. The market suffers Christmas hangover from the 22nd to the end of the month. Lookf or entry points (for calls OR puts) between the last 2 to 3 days of the month.
Friday, October 25, 2013
Monday, October 14, 2013
OEX Trading Rules
Rules for trading the OEX are as follows:
1) Only purchase this month's options - never buy time.
2) Purchase out-of-the-money options for a multi-day play, or in-the-money options if you plan on being in and out of the trade in the same day.
3) Only purchase strike prices ending in zeroes (ex: 600, 610, 620, etc.)
4) Purchase the strike price with the most volume after the open that is one to five strikes out of the money.
As an example, since we only purchase strike prices ending in zeroes: 600, 605, 610, 615, 620 would be 5 strike prices, but we would only consider 600, 610, or 620.
5) Only use the 55 minute or 34 minute charts as the decision chart, and the 8 or 5 minute chart as your action chart.
6) Due to the charts we are using we expect to be in these plays for a matter of minutes, up to a MAXIMUM of 4 days.
There are usually two very opportune areas in each month to play the OEX:
1) The 7 trading days that include the last 4 days of one month and the first 3 trading days of the next month.
2) The 8 trading days leading into expiration Friday. Though a play could be started on Wednesday (first day of the 8) it is generally preferred to begin plays on Monday (5 days before expiration).
General Notes:
1) Only purchase this month's options - never buy time.
2) Purchase out-of-the-money options for a multi-day play, or in-the-money options if you plan on being in and out of the trade in the same day.
3) Only purchase strike prices ending in zeroes (ex: 600, 610, 620, etc.)
4) Purchase the strike price with the most volume after the open that is one to five strikes out of the money.
As an example, since we only purchase strike prices ending in zeroes: 600, 605, 610, 615, 620 would be 5 strike prices, but we would only consider 600, 610, or 620.
5) Only use the 55 minute or 34 minute charts as the decision chart, and the 8 or 5 minute chart as your action chart.
6) Due to the charts we are using we expect to be in these plays for a matter of minutes, up to a MAXIMUM of 4 days.
There are usually two very opportune areas in each month to play the OEX:
1) The 7 trading days that include the last 4 days of one month and the first 3 trading days of the next month.
2) The 8 trading days leading into expiration Friday. Though a play could be started on Wednesday (first day of the 8) it is generally preferred to begin plays on Monday (5 days before expiration).
General Notes:
- All plays should be closed by 1:00 PM on Expiration Friday AT THE LATEST. After 1:00 PM noone cares about options that will expire in 3 hours.
- OEX options move in either direction very quickly - be prepared!
- There can be no "deer in the headlights" in the OEX. If you become a deer in the headlights, you will be run over by the OEX.
Thursday, September 26, 2013
September 26th, 2013
The markets have been down all week until today, posting very small yet still positive gains today. After the Fed's surprise "no taper" announcement last week, the markets irrationally skyrocketed for a day or two. They have been nose diving since, as fear that congress may allow the US to default on it's debts sets in.
Congress is in another debt ceiling debate, where the debate whether to raise the debt ceiling so the US can pay it's bills and honor it's financial obligations. Currently the US will run out of money by early to mid October if the ceiling is not raised, and this would result in the US defaulting on it's loan payments. This would prove catastrophic.
Everything points to congress reaching a decision about this on Monday, September 30th. Considering tomorrow is Friday, I think we'll hang in there on some down-side plays and then pull out by the end of Friday, then wait and see what the markets do on Monday.
In other news, it was revealed today that in the month of September so far, companies have issued a record amount of bonds as rates have been so low that it becomes very financially "advantageous" to do so. A big part of this too could very well be fueled by the Fed's own bond buying program.
Congress is in another debt ceiling debate, where the debate whether to raise the debt ceiling so the US can pay it's bills and honor it's financial obligations. Currently the US will run out of money by early to mid October if the ceiling is not raised, and this would result in the US defaulting on it's loan payments. This would prove catastrophic.
Everything points to congress reaching a decision about this on Monday, September 30th. Considering tomorrow is Friday, I think we'll hang in there on some down-side plays and then pull out by the end of Friday, then wait and see what the markets do on Monday.
In other news, it was revealed today that in the month of September so far, companies have issued a record amount of bonds as rates have been so low that it becomes very financially "advantageous" to do so. A big part of this too could very well be fueled by the Fed's own bond buying program.
Wednesday, September 18, 2013
September 18th
Making this a quickie as I am really REALLY angry with myself right now.
I went AGAINST my own advice... And traded today...and lost my ass at 2:00 when the fed shocked the world by announcing they would not taper! I was in a put option play on the QQQ and when 2:00 hit, my position got cut in half. I am so angry I cannot put into words how angry I am!
Lessons learned: when the Fed is expected to make a huge announcement, EXIT YOUR POSITIONS THE DAY BEFORE. There is too much potential for a massive loss!
Lesson two: I stayed in the trade as long as I did because I was already down on the trade. YOUR FIRST LOSS IS YOUR BEST LOSS. IF THE TRADE IS NOT WORKING, CUT YOUR LOSSES AND GET OUT. If it's not working NOW, WHEN IT'S SUPPOSED TO, the why will it work later? Don't give a losing trade "time to work"... Cut and run!
I'm off to lick my wounds and hopefully not lose my mind. I am a very faithful man and I can say with full confidence yes I was stupid today and yes I need Jesus right now.
Monday, September 16, 2013
September 15th, 2013 QQQ Analysis
Chart is below, and as you can see there was a MAJOR gap up in the QQQ followed by a sell off that lasted pretty much the whole session.
The gap up was supposedly caused by Lawrence Summers withdrawing his name from candidacy to become the next Federal Reserve Chairman after Bernanke steps down in January. The hard sell off is a mystery in itself, but it was due for a short term dip anyway, so that's most likely the cause. The gap up probably just gave it extra room (and an extra excuse) to fall.
The futures are down as I type this at 8:25 PM EST. Perhaps this is the "pop" followed by the "hard sell off" I've been waiting for...
The gap up was supposedly caused by Lawrence Summers withdrawing his name from candidacy to become the next Federal Reserve Chairman after Bernanke steps down in January. The hard sell off is a mystery in itself, but it was due for a short term dip anyway, so that's most likely the cause. The gap up probably just gave it extra room (and an extra excuse) to fall.
The futures are down as I type this at 8:25 PM EST. Perhaps this is the "pop" followed by the "hard sell off" I've been waiting for...
21 Minute Chart
It certainly did a good job smashing downward through a key support level (the bold pink line). The StochRSI is currently oversold and the MACD histogram is showing some signs of recovery. Having said that, it's too early to tell if the QQQ will rebound or continue falling.
Check the NASDAQ futures Tuesday morning and use them as your trend chart when making trading decisions for the QQQ.
Oh, and I WILL NOT be trading on Wednesday as that is when the Fed will announce their tapering plans following the FOMC meeting. There's too much potential for a trade to go against me during Wednesday's session, so I won't be participating. I will, however, be actively watching to see how the market responds, and I will be eagerly waiting for an opportunity to take advantage of this!
Saturday, September 14, 2013
QQQ Analysis, September 14th 2013
Wanted to take a moment to look at the QQQ seeing as it's probably my most frequently traded security.
I'll be posting the 21 minute, Daily, and Weekly charts. When trading the QQQ I typically use the Nasdaq 55 minute futures as my trend chart, however I'm doing a more in-depth analysis of the Q's so I'm doing longer term charts.
The 21 minute chart (aka my "Decision" chart) shows that yesterday there was a huge dip in the morning, but the QQQ recovered as the day went on, and pretty much got back to even. Most of the good trades have been to the upside on the Q's lately, and you'll see why when you look at the Daily and Weekly charts.
The QQQ has had a few dips the last couple of months, but for the last week or two it has been going up strong. As you can see, the last few days it seems to have stalled out. A lot of this is indecision over the upcoming Fed meeting, which we'll know more about the Fed's bond-buying tapering plans this coming Wednesday.
The MACD histogram is shrinking, and the stochRSI is topped out in the "overbought" region, so I would suspect some sort of dip coming up here soon. Plus the ADX is showing weakening in the current uptrend. The historical timing of this would coincide with the after-Sept-10th dip that I've been expecting.
The large pink line on the Daily is a trend line drawn off the weekly chart, which is coming up next...
Up, up, and away! The weekly has been going up strongly since about a year ago, and has been holding a steady trend shown by the bold pink line I drew. The weekly MACD histogram is showing some weakness. The stochRSI still has some room to run, and the candles have yet to hit the top bollinger band on the weekly. The weekly shows that, long term, the QQQ still has some room to run to the upside.
In Summary
In summary, there is a lot of indecision headed into the results of the Fed meeting next week. We'll know the results on Wednesday, September 18th. The 21 minute chart is showing choppiness, having sharp/quick downside moves that are brief and more sustained intra-day upside moves. The daily is showing signs of topping out, and may have a brief downside move soon. The weekly is showing that it still has some room to run to the upside.
I would say we're going to experience a dip going into the Fed meeting as investors ponder just what the Fed will do. Then, depending on the results of the Fed meeting, we'll either see the QQQ rocket up or sell-off sharply. There's so much hinging on the Fed meeting that I honestly cannot predict what will happen, only that (from a purely charting standpoint, ignoring the Fed entirely) there should be a short term dip on the daily soon.
I'll be posting the 21 minute, Daily, and Weekly charts. When trading the QQQ I typically use the Nasdaq 55 minute futures as my trend chart, however I'm doing a more in-depth analysis of the Q's so I'm doing longer term charts.
21-Minute Chart
The 21 minute chart (aka my "Decision" chart) shows that yesterday there was a huge dip in the morning, but the QQQ recovered as the day went on, and pretty much got back to even. Most of the good trades have been to the upside on the Q's lately, and you'll see why when you look at the Daily and Weekly charts.
Daily Chart
The QQQ has had a few dips the last couple of months, but for the last week or two it has been going up strong. As you can see, the last few days it seems to have stalled out. A lot of this is indecision over the upcoming Fed meeting, which we'll know more about the Fed's bond-buying tapering plans this coming Wednesday.
The MACD histogram is shrinking, and the stochRSI is topped out in the "overbought" region, so I would suspect some sort of dip coming up here soon. Plus the ADX is showing weakening in the current uptrend. The historical timing of this would coincide with the after-Sept-10th dip that I've been expecting.
The large pink line on the Daily is a trend line drawn off the weekly chart, which is coming up next...
Weekly Chart
Up, up, and away! The weekly has been going up strongly since about a year ago, and has been holding a steady trend shown by the bold pink line I drew. The weekly MACD histogram is showing some weakness. The stochRSI still has some room to run, and the candles have yet to hit the top bollinger band on the weekly. The weekly shows that, long term, the QQQ still has some room to run to the upside.
In Summary
In summary, there is a lot of indecision headed into the results of the Fed meeting next week. We'll know the results on Wednesday, September 18th. The 21 minute chart is showing choppiness, having sharp/quick downside moves that are brief and more sustained intra-day upside moves. The daily is showing signs of topping out, and may have a brief downside move soon. The weekly is showing that it still has some room to run to the upside.
I would say we're going to experience a dip going into the Fed meeting as investors ponder just what the Fed will do. Then, depending on the results of the Fed meeting, we'll either see the QQQ rocket up or sell-off sharply. There's so much hinging on the Fed meeting that I honestly cannot predict what will happen, only that (from a purely charting standpoint, ignoring the Fed entirely) there should be a short term dip on the daily soon.
September 14th, 2013
Today is a Saturday, but I figured I'd post some thoughts I have on the market as of late.
I keep expecting the market to make a down move just because A) September is historically the worst month on the stock market and B) According to the "market calendar" I follow, September is supposed to be a down month after the 10th with some buying opportunities presenting themselves toward the end of the month.
So far things have been up, up, and up some more. The Fed is expected to announce their tapering plans for their bond buying program at the conclusion of a 2 day meeting on Wednesday, September 18th. Given how the markets reacted to even slight whispers of Fed plans back in the summer, I'm sure the markets will have some sort of reaction. Whether this reaction is up or down, though, depends on what the Fed announces and how they announce it.
I think it's good long term, because they've been pumping so much "heroin" into the market with this bond buying that the market has become high and addicted to it.
Additionally, the US has come to an agreement with Russia for a peaceful resolution to the disarmament of Syria's chemical weapons cache, at the behest of Vladimir Putin. One week ago we were beating the drums of war, and now we've reached a peaceful resolution. This will certainly bode well for the market, seeing as it was showing some weakness at the mention of war a few weeks ago.
On the whole not a whole lot else going on. There are some signs of economic weakness popping up such as weakening consumer sentiment, and also weakening in job creation. We continue to create low paying "hamburger flipper" jobs, while good paying jobs seem to be getting more and more scarce. This is quickly turning into a nation of kings and paupers.
I keep expecting the market to make a down move just because A) September is historically the worst month on the stock market and B) According to the "market calendar" I follow, September is supposed to be a down month after the 10th with some buying opportunities presenting themselves toward the end of the month.
So far things have been up, up, and up some more. The Fed is expected to announce their tapering plans for their bond buying program at the conclusion of a 2 day meeting on Wednesday, September 18th. Given how the markets reacted to even slight whispers of Fed plans back in the summer, I'm sure the markets will have some sort of reaction. Whether this reaction is up or down, though, depends on what the Fed announces and how they announce it.
I think it's good long term, because they've been pumping so much "heroin" into the market with this bond buying that the market has become high and addicted to it.
Additionally, the US has come to an agreement with Russia for a peaceful resolution to the disarmament of Syria's chemical weapons cache, at the behest of Vladimir Putin. One week ago we were beating the drums of war, and now we've reached a peaceful resolution. This will certainly bode well for the market, seeing as it was showing some weakness at the mention of war a few weeks ago.
On the whole not a whole lot else going on. There are some signs of economic weakness popping up such as weakening consumer sentiment, and also weakening in job creation. We continue to create low paying "hamburger flipper" jobs, while good paying jobs seem to be getting more and more scarce. This is quickly turning into a nation of kings and paupers.
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