Posted by sonofrebel on 7th of Aug 2019 at 10:21 am
Gold is a small market - GLD has market cap of $40bn, about same
as either TGT or WDAY.
GDX is $10bn, GDXJ $5bn
According to MarketSmith, whole Mining Precious Metals group
has market cap of $172bn; about same as a couple of FANGs cash
balances
Posted by sonofrebel on 30th of Jul 2019 at 03:37 pm
I stared at that for some time wondering how much that meant - I
then used
Sentimentrader.comback-test over
same period to see what happens. Results are 50/50 at best.
I have tested lots of these so called predictors and very few
work better than a coin toss - does not stop Twitter filling up
with them. Chart reading seems to be superior to me (hence
BPT).
Posted by sonofrebel on 24th of Jul 2019 at 12:38 pm
Took data from Matt on SPY Pro and looked at compounding it each
year. i.e. raise equity at year end to add in all profits from
trades in that year - compounds at about 30% per annum. Data
and equity curve below. 10k becomes 3.9mn - enough for 6,420
years of BPT (unless Matt raises the price in that timeframe of
course).
Posted by sonofrebel on 18th of Jul 2019 at 02:55 pm
I have bought puts on BYND ahead of earnings;
30 min chart shows 62% retracement of last swing on declining
volume (blue)
Valuation is off the charts
1:1 ABC extension would take it back into the gap up which
starts at 110 area (green)
Plan to add if breaks 9 ema
IV rank is lowest it has been and will ramp into earnings due
7/29
Posted by sonofrebel on 8th of Jul 2019 at 09:19 am
2nd Half Outlook
Thanks for newsletters this weekend.
On the subject of the second half of the year, Ciovacco did
an interesting video this weekend where he discussed that in depth
(on YouTube).
He noted the same data Matt did that the second half is
typically weak after the strong first half we had, but then goes
into depth on each of the prior occassions and sugests the
precedents may not be applicable at the presnt time. The
basic reason he suggests that is that we have only just broken out
of a very long conslidation period in the present situation whereas
the prior occasions the market was quite extended from any base or
support level and so was "tired" and due for a pullback.
Cannot do justice to his video so check it out if it sounds
interesting - long video so you may have to hunt around to find
that section.
Posted by sonofrebel on 5th of Jul 2019 at 01:02 pm
Yield curve; this will be a test...
Everyone isnow looking at 3 month 10 year spread (now inverted)
- traditionally, I havefollowed the more usual 2-10 spread (not
inverted).
So, does itmatter - chart below is from FRED data and compares
the two as far back as the data goes - the shaded areas are
recessions that follow an inversion (with a considerable lag, so no
need to panic, yet).
The 3 month inversion has led to a 2 year inversion EVERY time
so far - EXCEPT now. So will it confirm or is the 2-10 the real
signal and the 3 month is a distraction in aFed/ZIRP mad,mad world
- we will know soon.
I would not favor going too short - I don't like to start
anything less than 30 days and your choice seems about right to me.
Less of an issue with delta 85's but even at delta 70's, the
time decay which really kicks in at 30 days starts to bite. See
general chart below - I assume this is at the money mmodel (delta
50).
It makes little difference to price (and hence leverage) once
you go past 30 days - see attached for comparison of Aug and Sept
delta 85 options - 17.10 vs 21.70. Also note that short term
options are much cheaper.
But here are the time decay calculations:
July @ 11.71, theta is 10.7 c per day - 0.91% per day (which
increases with time as do all the numbers below)
Aug @ 17.10, theta is 7.37 c per day - 0.43% per day
Sept @ 21.70, theta is 6.45 c per day - 0.30% per day
I have attached risk graphs for the three dates using roughly
the same $ invested - as you can see there is little difference
between Aug and Sept but July has much higher risk of losing and
making money quickly. I have also included 2 screen shots of
data behind this comment.
My summary would be that people should look at increasing
their risk in steps with SPY Pro system and pick which level they
are most comfortable with;
1. SPY
2. 2 or 3 x SPY ETFs
3. Spy in the money high delta options - 60 days out - this
level is where you are really using options as stock substitute
rather than making an option trade
4. Spy in the money options closer in time
5. Spy at the money options
6. Spy out of the money options etc.
My advice would be to start with 1 and then increase as you
get comfortable with the high probabilities and are willing to take
more risk (so I agree with your suggestion on this approach)
- recall with an option, you can be right and still loose
money!
Posted by sonofrebel on 27th of Jun 2019 at 03:42 pm
I trade alot of options - let me illustrate how I make the
choice with SPY Pro.
I use OptionVue as an analytical platform; there is a feature
called TradeFinder. I set a target (in this case SPY up 5% in
20 calendar days) to look for optins that will have the highest
return. In this case the scan came up with a 4:1 return for
optins around 305/306 strike. These are only delta 20 as it
turns out (for most stocks the program selects delta 30 or so).
I also assume no change in volatility - it may fall with an
increase in price. In any event, this owuld change the
numbers to be a little less, but will make littel differnce in
ranking.
The issue with going out of the money as far is you suffer
time decay; the 85 delta options Matt picks are really a stock
substitute and have little theta.
For the same dollar investment though, you can have 25
contracts and, if right, htte upside is quite a bit more. If
you are doing this, I would suggest you assume a complete loss of
premium to set you risk level.
Attached are three screen shots as of close of day on Tuesday
(OptionVue can go back in time to the prices at that time).
1. The run of option returns for a $1,000 investment ranked
by expected return if SPY gains 5% in 15 days.
2. The risk graph of 1 option at 266; differnet timeframes
are very close as there is little theta.
3. The risk graph of 25 options at 305; timeframes are widely
spaced relfecting the theta.
The solid vertical line is the target - I have highlighted
the 27 day line in these graphs - the reward from 1 option is 50%
and from 25 OTM options it is over 300%.
Dont be seduced by the extra returns - you risk losing money
a lot faster as well! Hence my comment on sizing risk
above.
Posted by sonofrebel on 4th of Jun 2019 at 08:16 am
I was thinking of another sub system when I posted that - more
to the point, the current entries are included in the systems
section and so there is no need to ask here.
I do not listen to all of the updates, especially the
"routine" ones on the systems as I trust the systems section and
your alert emails to keep me up to date.
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Wow - wish my RIG
FCX triple bottom?last time it undercut the prior low, it ...
Posted by sonofrebel on 13th of Aug 2019 at 10:31 am
Wow - wish my RIG chart really did this - false print in MarketSmith!
FCX up 5% and back
FCX triple bottom?last time it undercut the prior low, it ...
Posted by sonofrebel on 13th of Aug 2019 at 10:27 am
FCX up 5% and back inside range - also added OIH and RIG on open - final lows? No reference levels like FCX to help though
FCX triple bottom? last time it
Posted by sonofrebel on 12th of Aug 2019 at 12:53 pm
FCX triple bottom?
last time it undercut the prior low, it had a 20% plus run up - now a further low with divergence here
PS Good luck Matt with sorting out the home
Gold at all time highs
Posted by sonofrebel on 7th of Aug 2019 at 03:40 pm
Gold at all time highs in Sterling, Euro and Yen
Gold is a small market
GLD getting way overdone here .......everyone piling in the trade ...
Posted by sonofrebel on 7th of Aug 2019 at 10:21 am
Gold is a small market - GLD has market cap of $40bn, about same as either TGT or WDAY.
GDX is $10bn, GDXJ $5bn
According to MarketSmith, whole Mining Precious Metals group has market cap of $172bn; about same as a couple of FANGs cash balances
I stared at that for
Big Time Call Buying on the VIX
Posted by sonofrebel on 30th of Jul 2019 at 03:37 pm
I stared at that for some time wondering how much that meant - I then used Sentimentrader.comback-test over same period to see what happens. Results are 50/50 at best. I have tested lots of these so called predictors and very few work better than a coin toss - does not stop Twitter filling up with them. Chart reading seems to be superior to me (hence BPT).
Took data from Matt on
Market selling down on Anti-trust probe of Big Tech
Posted by sonofrebel on 24th of Jul 2019 at 12:38 pm
Took data from Matt on SPY Pro and looked at compounding it each year. i.e. raise equity at year end to add in all profits from trades in that year - compounds at about 30% per annum. Data and equity curve below. 10k becomes 3.9mn - enough for 6,420 years of BPT (unless Matt raises the price in that timeframe of course).
Just stick to the rules
SPY System exiting at the close
Posted by sonofrebel on 23rd of Jul 2019 at 04:16 pm
Just stick to the rules you have worked so hard on - and leave it to us to break them!
I have bought puts on
BYND breaking out
Posted by sonofrebel on 18th of Jul 2019 at 02:55 pm
I have bought puts on BYND ahead of earnings;
30 min chart shows 62% retracement of last swing on declining volume (blue)
Valuation is off the charts
1:1 ABC extension would take it back into the gap up which starts at 110 area (green)
Plan to add if breaks 9 ema
IV rank is lowest it has been and will ramp into earnings due 7/29
2nd Half Outlook Thanks for newsletters
Posted by sonofrebel on 8th of Jul 2019 at 09:19 am
2nd Half Outlook
Thanks for newsletters this weekend.
On the subject of the second half of the year, Ciovacco did an interesting video this weekend where he discussed that in depth (on YouTube).
He noted the same data Matt did that the second half is typically weak after the strong first half we had, but then goes into depth on each of the prior occassions and sugests the precedents may not be applicable at the presnt time. The basic reason he suggests that is that we have only just broken out of a very long conslidation period in the present situation whereas the prior occasions the market was quite extended from any base or support level and so was "tired" and due for a pullback. Cannot do justice to his video so check it out if it sounds interesting - long video so you may have to hunt around to find that section.
Yield curve; this will be
Posted by sonofrebel on 5th of Jul 2019 at 01:02 pm
Yield curve; this will be a test...
Everyone isnow looking at 3 month 10 year spread (now inverted) - traditionally, I havefollowed the more usual 2-10 spread (not inverted).
So, does itmatter - chart below is from FRED data and compares the two as far back as the data goes - the shaded areas are recessions that follow an inversion (with a considerable lag, so no need to panic, yet).
The 3 month inversion has led to a 2 year inversion EVERY time so far - EXCEPT now. So will it confirm or is the 2-10 the real signal and the 3 month is a distraction in aFed/ZIRP mad,mad world - we will know soon.
I mentioned FCX when it
Worth watching FCX here - bought some long dated calls ...
Posted by sonofrebel on 1st of Jul 2019 at 03:03 pm
I mentioned FCX when it undercut the low on 9.60 - since them moved up 20% and now having a very high volume support day over 50 DMA
Did gap - so I
EA has flat level at nice 100 round number inside ...
Posted by sonofrebel on 28th of Jun 2019 at 04:02 pm
Did gap - so I bought on limit order at 100.01 and it closed at 101.26 so am keeping it
It wont make a lot
SPY system trade update
Posted by sonofrebel on 28th of Jun 2019 at 01:27 pm
It wont make a lot of difference - here is a comparison of same dollar investments in the two options based on current prices
I posted a detailed follow
Just to clarify on the SPY system around the leverage ...
Posted by sonofrebel on 28th of Jun 2019 at 09:10 am
I posted a detailed follow up here with screen shots but seems tohave disapeared? If so, can repost later - if it re-appears, it would be nice
EA has flat level at
Posted by sonofrebel on 28th of Jun 2019 at 09:09 am
EA has flat level at nice 100 round number inside a base
SPY
Just to clarify on the SPY system around the leverage ...
Posted by sonofrebel on 28th of Jun 2019 at 08:24 am
I would not favor going too short - I don't like to start anything less than 30 days and your choice seems about right to me. Less of an issue with delta 85's but even at delta 70's, the time decay which really kicks in at 30 days starts to bite. See general chart below - I assume this is at the money mmodel (delta 50).
It makes little difference to price (and hence leverage) once you go past 30 days - see attached for comparison of Aug and Sept delta 85 options - 17.10 vs 21.70. Also note that short term options are much cheaper.
But here are the time decay calculations:
July @ 11.71, theta is 10.7 c per day - 0.91% per day (which increases with time as do all the numbers below)
Aug @ 17.10, theta is 7.37 c per day - 0.43% per day
Sept @ 21.70, theta is 6.45 c per day - 0.30% per day
I have attached risk graphs for the three dates using roughly the same $ invested - as you can see there is little difference between Aug and Sept but July has much higher risk of losing and making money quickly. I have also included 2 screen shots of data behind this comment.
My summary would be that people should look at increasing their risk in steps with SPY Pro system and pick which level they are most comfortable with;
1. SPY
2. 2 or 3 x SPY ETFs
3. Spy in the money high delta options - 60 days out - this level is where you are really using options as stock substitute rather than making an option trade
4. Spy in the money options closer in time
5. Spy at the money options
6. Spy out of the money options etc.
My advice would be to start with 1 and then increase as you get comfortable with the high probabilities and are willing to take more risk (so I agree with your suggestion on this approach) - recall with an option, you can be right and still loose money!
I trade alot of options
Just to clarify on the SPY system around the leverage ...
Posted by sonofrebel on 27th of Jun 2019 at 03:42 pm
I trade alot of options - let me illustrate how I make the choice with SPY Pro.
I use OptionVue as an analytical platform; there is a feature called TradeFinder. I set a target (in this case SPY up 5% in 20 calendar days) to look for optins that will have the highest return. In this case the scan came up with a 4:1 return for optins around 305/306 strike. These are only delta 20 as it turns out (for most stocks the program selects delta 30 or so). I also assume no change in volatility - it may fall with an increase in price. In any event, this owuld change the numbers to be a little less, but will make littel differnce in ranking.
The issue with going out of the money as far is you suffer time decay; the 85 delta options Matt picks are really a stock substitute and have little theta.
For the same dollar investment though, you can have 25 contracts and, if right, htte upside is quite a bit more. If you are doing this, I would suggest you assume a complete loss of premium to set you risk level.
Attached are three screen shots as of close of day on Tuesday (OptionVue can go back in time to the prices at that time).
1. The run of option returns for a $1,000 investment ranked by expected return if SPY gains 5% in 15 days.
2. The risk graph of 1 option at 266; differnet timeframes are very close as there is little theta.
3. The risk graph of 25 options at 305; timeframes are widely spaced relfecting the theta.
The solid vertical line is the target - I have highlighted the 27 day line in these graphs - the reward from 1 option is 50% and from 25 OTM options it is over 300%.
Dont be seduced by the extra returns - you risk losing money a lot faster as well! Hence my comment on sizing risk above.
NASI cross up here
NASI chart
Posted by sonofrebel on 7th of Jun 2019 at 03:51 pm
NASI cross up here
I was thinking of another
Are we still in the SPY System trades?
Posted by sonofrebel on 4th of Jun 2019 at 08:16 am
I was thinking of another sub system when I posted that - more to the point, the current entries are included in the systems section and so there is no need to ask here.
I do not listen to all of the updates, especially the "routine" ones on the systems as I trust the systems section and your alert emails to keep me up to date.