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All Star Charts

Expert technical analysis of financial markets by JC Parets

[Options Premium] Utilizing Premium Again

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This is starting to become a monthly trade.

I like to keep a few delta neutral trades active in the portfolio at all times (if I can). It’s a good diversifier and also benefits from sleepy or sideways markets that tend to not help any of my directional trades.

So I regularly scan my list of the most active optionable ETFs to pick out the ones with the highest implied volatility and charts that look like the potential for sideways action setting up (ideally). And once again, for the 3rd month in a row, The utilities sector is standing out for me.

The last two strangles worked out. This time, we’re gonna do a slightly different twist.

[Read more…]

[Options] June Positions Review

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As June gets under way, it’s time to review positions with June options that remain open (haven’t already hit profit targets or been stopped out).

Most trades I put on for All Star Options tend to have a minimum duration of 30 days (short premium plays) and often as long as 6-8 months (for long premium plays). As options approach expiration, greeks like theta and gamma start to become my enemy and whipsaw my P/L. Therefore, as options and spreads get into the expiration month, my best practice is to put each position on notice — it’s time to take action. [Read more…]

[Options Premium] Buying the Dip in Strong Names

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In the latest All Star Charts Monthly Conference Call, JC laid out a number of bullish trades. In the week or so since that call, a number of the stocks mentioned have since pulled back. Does that mean the trades are dead?

Not necessarily.

Nothing goes up in a straight line. And if you’re a believer that our current pullback is just a result of sector rotation and a reload for a later resumption higher, then you’ve got to be a lover (as I am) of opportunities to enter the strongest stocks as they pause and/or pull back a bit.

With that in mind, we’re putting a trade on in a Pharma stock that has the wind in it’s sails.

[Read more…]

[Options Premium] A Cautiously Bullish Bet in Retail

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Ok, I have to be honest here. I’m not incredibly bullish at these prices. As much as I try to divorce myself from the news cycle and the fundamentals, its hard to think NOW is the time to get long.

That said, only price pays, and charts and declining volatility in many stocks is telling different stories.

The beautiful thing is I can express bullish trades with options and clearly define my risk. Here’s one that looks like a good risk reward:

[Read more…]

[Options] Bonds Ready to Move?

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In March, the up move and subsequent retracement in Bonds was breathtaking and had the world’s attention.

In April, Bonds spent most of the month “normalizing,” at a newer, higher level.

Here in May, we’re starting to see signs that another move to the upside is materializing. Here’s a quote from JC in a recent email to All Star Chart subscribers:

If you’re looking for an uptrend, it’s in the bond market, NOT the stock market.

…the technical setup in Treasuries looks much better than it does for Stocks right now, over both long and short-term timeframes. TLT is trading just a few percent off all-time highs as price just broke above a confluence of resistance.

And here’s the chart of relative strength between $TLT and $SPY that adds further evidence of a resumption of trend for TLT: [Read more…]

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