September has been a month where the market's experienced some sharp moves to the downside, so I want to use this post to review what we spoke about last month and provides some context around any changes that have occurred since then.

Kim Sokoloff is a trader's trader. Whenever I see her she is always telling me about her trading day, what she was buying and what she was selling. I have a huge appreciation for the passion she brings to the markets on a daily basis. We all have different time horizons, some longer-term and some shorter-term. Kim is concerned with what stocks are doing over a a few days. For her, "long-term" is only a couple of weeks. In this episode, Kim walks us through her morning routine and thought process throughout the trading day. We've had analysts, money managers and traders on the podcast, but in this conversation we really dive deep into what it's like trading every day from an apartment in lower Manhattan. I really enjoyed this discussion with a very active swing trader and practicing technician.

As the Technology sector goes, so often goes the market. And the Tech Select Sector ETF $XLK has been going nowhere -- increasingly so -- over the past several weeks.

Does anybody here think broader market indices go sideways from now until the end of the year?

Yeah, I didn't think so.

If, or rather when, indices start busting a move, we're pretty confident that the technology sector will have a major say in the direction and pace. And we've got a plan to participate, whichever way it goes.

In life we have the saying "Make hay while the sun shines", suggesting that we take advantage of something while conditions are favorable because we don't know when those conditions will end or when they will be favorable again. In markets it's similar in that we want to be our most aggressive when the majority of the evidence is pointing in one direction or another.

Sticking with a theme we’ve been discussing with All Star Options subscribers for the past month or so, we expect to continue keeping things simple around here until the market tells us it’s time to change.

One way we’ve been keeping things simple is to be buyers of straight long call options. It’s still a bull market in spite of what gets shouted to you on TV, and volatilities continue to be low — pricing options relatively cheaply. So as long as the volatility in any individual name is still cheap, we’re always going to be looking at long slightly out-of-the-money call options to participate in bullish plays while affordably limiting our risk.

One variant of this play that also holds a lot of interest for me — especially in higher priced names where I might wish to limit my risk a little bit more — is the long call calendar spread which consists of a short call in a near month combined with a long call at the same strike in a further out month for a net debit. It gives us three ways to win!

There's always a tell. Before the most recent rally we've seen in U.S. stocks since August, Aerospace & Defense stocks were breaking out. It was hard to be bearish equities with this A&D group, an important part of the Industrials sector, and a leader among leaders, coming out of an 8-month base to new all-time highs. Also, this came within the context of a tremendous uptrend, so an upside resolution was perfectly normal. That breakout was telling for stocks as an asset class. Today I think it's Technology. What this sector does here should tell us a lot about this market.

After the new weightings, Technology is going to represent 20% of the S&P500, which is still a large chunk, despite being cut from 26% of the S&P500 pre-adjustments. It's funny, strong markets do splits, not reverse splits. I'll take this as a positive for Tech. And if it's not, then I think we have a problem. That's what we're looking at here today.

To be clear, I believe the higher probability...

We have been pounding the table to be buying U.S. stocks and ignoring the bearish rhetoric coming from almost everyone these days. I have never seen a stock market crash where people have been this prepared for it. I get an email a day warning me about this coming historic crash. We've happily taken the other side of this nonsense and continue to believe the path of least resistance is higher, much higher in fact.

However, the market doesn't care what JC thinks and is going to do whatever the heck it wants. That's life. So ahead of any serious correction, we want to identify levels where we would start to become much more neutral towards equities. Tightening stops, being less aggressive from the buy side, owning put protection and strategies like these are most appropriate under these conditions. Today, I'm going to lay out what it's going to take for us to approach the market from a more neutral to bearish perspective:

This is the monthly conference call for Members of All Star Options. In this call we will discuss the current market environment and focus on price and volatility behavior. Throughout the session, J.C. Parets will add commentary on the technical outlook moving forward, and Sean McLaughlin will discuss the options strategies available to profit from the market activity.

This month’s Conference Call will be held on Tuesday October 2nd at 7PM ET. Here are the details for the call:

Sometimes I think I have a little too much fun writing headlines. But, when we're looking into opportunities in the gaming space, I guess it comes with the territory.

We recently took a look into the newly configured Communications Services Sector and highlighted some component stocks that stand out as notable opportunities. From an options trading perspective, Take-Two Interactive $TTWO offers us the best chance for a profitable play.

Last week was our Members-Only Conference Call, where we discussed what we're seeing in Equities, Commodities, and Currencies. During our discussion around Equities there were two themes that came up over and over again due to their impact on the overall market's direction: weakness in the Financial Services sector and small-cap under-performance.

Given the mixed signals we continue to get from this market, I wanted to share my thoughts on these themes and get feedback on what you all are seeing out there.

During last week's Members-Only Conference Call we discussed a lot of themes, including some potential improvements in the price action of Gold and other metals. However, in this quick post I want to highlight some opportunities that may potentially emerge in the Base Metal space over the next few weeks and months.