Expert technical analysis of financial markets by JC Parets
Weekends are great to just take a step back and see what is actually going on. It’s really easy to get caught up in the day to day noise. I talk about the power of Monthly Chart Reviews. This is a similar process, just done more frequently and timeframes are shorter-term. But the taking a step back part follows the same philosophy.
Here are a few things that I’m thinking about this weekend: [Read more…]
I’ve been in the camp that this 20-month consolidation in the U.S. Stock Market is just that, a consolidation within an ongoing uptrend that started in early 2016, or 2013, or even further back depending on who you ask. I already made my case.
When you factor in the global market conditions, which I’ve done here, this is an environment where I believe it’s easier to get paid buying stocks, not selling them. That could certainly change. Energy could roll over again, Small-caps and Transports could lose their former lows and new downside leadership can emerge. While I think that is the lower probability outcome, it’s always an important exercise to consider the other side.
Today we’re making the bear case and presenting the evidence that most points to a bearish environment in Q4 and one where we’re better off selling stocks, not buying them. [Read more…]
In this Episode of Allstarcharts Weekly, Steve and I talk about how the spike in Crude Oil earlier this week is impacting Energy Stocks. When we look specifically at the Oil & Gas Exploration & Production Index, prices broke down below the 2009 & 2016 lows, only to quickly reverse back above. We also saw this happen in the Oil Services Index. Prices of the $OIH broke below the 2001 lows only to get back above it swiftly. I think if we’re above 24 in $XOP and 14 in $OIH, we want to err on the long side. If we are in fact seeing a mean reversion in Energy Stocks, I would image Crude Oil will most likely be flat to up in that environment. The levels are set, now let’s see how this plays out!
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All else being equal, when deciding between two or three viable trades, I’ll often choose the one that offers me the best opportunity to neutralize my “greeks risk.” Meaning, if my overall portfolio is leaning a little long delta, I might favor the new trade that is short delta. If I’m long a bunch of premium and therefore have a high negative theta score for my entire portfolio, I’d likely choose to add the trade that offers me the most positive delta. My thinking being: if I can neutralize as many greeks as possible, then I put myself in position to let the individual edges and risk-reward ratios play out in my favor without getting negatively affected by any sudden changes in the overall market.
This also applies to timeframe.
A quick scan of my open positions today revealed that I have a relatively high number of open positions with October, December, and January expirations. But just a couple with November expirations. So taking an idea from All Star Charts’ September Conference Call, I’ve found an opportunity that we can play in November.
From the desk of Tom Bruni @BruniCharting
Tuesday’s Mystery Chart is one of my favorite charts right now, so thank you all for your feedback and participation.
It seems almost everyone was on the same page here, getting involved in some way, shape, or form on the long side.
With that as our backdrop, let’s get into it.
We are back with another episode of The Money Game Podcast with Phil Pearlman. Today we talk about the inability for some people trade US stocks from the long side due to biases stemming from past experiences. This is a real thing that we see constantly. So we talk about the causes, being aware of these feelings and what can be done to overcome these hurdles. I’m lucky that I’ve been through enough bull market and bear market cycles to not get stuck into betting on just one side or the other. But some people have a real fear of admitting they’re wrong and turning bullish at, what they think might be, precisely the wrong time. Some of this is driven by ego and some is just irrational anxiety. This is a really important conversation and one that I will likely listen to again several times over in the future.
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This is the video recording of the September 2019 Conference Call.
Okay, having a play in mind for Kansas City Southern $KSU made the title of this post low hanging fruit. Captain Obvious, this guy.
Our boy JC here at All Star Charts went shopping this weekend and couldn’t help catching a glimpse of the cover of this week’s Barron’s attempting to instill fear into the hearts of Railroad investors. He, like me, is a natural skeptic of headlines. So he dug into the sector and was not surprised to see price action telling a different story. One of the most compelling charts to me is the one for $KSU and I’m liking the route these tracks are headed. [Read more…]
