Every so often I like to put on some delta neutral credit spreads to balance out the portfolio a bit. It's all about diversifying the books so that I'm not solely reliant on direction or volatility. We've got positions on currently that will benefit from big moves in either direction, but what if the market just grinds sideways for a bit?
This is where some delta neutral credit spreads can help out.
And my preference is to initiate these trades in liquid ETFs that are exhibiting relatively high implied volatilities.
This week I popped into Yahoo Finance to chat with their Technical Analyst Jared Bilkre.
We discussed the potential bottom in Bitcoin earlier this week. If Bitcoin is above 30,000 then a long position makes sense. But if it doesn't, I think there's probably good support at zero. Who knows how low it can go from there. But I won't be in it, so it's not my problem.
With the Nasdaq100 Equally-weighted Index flirting with a breakout near 110 and the ARKK ETF near 130, these are the critical levels we're watching.
The Dow Jones Industrial Average, Dow Jones Transportation Average, Russell2000 Small-caps and Russell Micro-cap Indexes are all below overhead supply.
Messy for longer has been the pain trade and I think European Banks could be a big tell for the next direction of markets. We're watching that $20 level on $EUFN.
From the desk of Steve Strazza @Sstrazza and Ian Culley @Ianculley
Earlier in the week, we held our June Monthly Conference Call, which Premium Members can access and rewatch here.
In this post, we’ll do our best to summarize it by highlighting 5 of the most important charts and/or themes we covered, along with commentary on each.
From the desk of Steven Strazza @Sstrazza and Ian Culley @IanCulley
There’s no question the landscape in the currency market has dramatically changed with the US Dollar reasserting its dominance in recent weeks.
You can read more about this in our weekly currency post, but here’s an excerpt with the long and short of it:
King dollar is definitely back in the driver’s seat from a tactical viewpoint as we’ve seen a significant shift in favor of USD over the near term. But even the intermediate and long-term trends for most major FX pairs have flipped in the direction of the Dollar over the past month or so.
Considering this broad-based strength, it’s clear that bulls are back in control of the Dollar… at least from a near-term perspective.
So, earlier in the week we analyzed the US Dollar Index $DXY and outlined some critical levels to watch over the short run.
There's nothing more gratifying than watching our youngsters graduate to the next level, cheering on athletes who advance through the ranks, or enjoying the ride of our investments moving from "small cap" to "large cap" during our hold.
The 2 to 200 Club report that the All Star Charts team produces attempts to give us the heads up on the next companies that are likely to make the step up to the next level. You can read our latest report here.
One of the names that caught my attention is one involved in data analytics utilizing Artificial Intelligence to drive performance.
Following Bitcoin's bounce back these last few days after some sustained selling, there's plenty of failed breakdowns out there in the Crypto space right now.
In essence, when price undercuts its former lows, stop losses get hit, and longs throw in the towel. At the same time, bears heavily jump in and enter short.
Then as the market begins to rally back above those former lows, shorts are now underwater, and they're forced to cover. While they're buying back their positions to unwind the trade, longs see price on a tear higher and fold into buying back their old position. Momentum traders see these gains and jump on the bandwagon too, forcing even more shorts to cover.
