Stocks have traded in a tight range for several days. While there's some divergence between $SPX and the broader market, the trend remains upward with $SPX hitting new highs. Support levels are at 5400, 5350, 5260, and possibly 5450.
Equity-only put-call ratios are moving sideways near the lows of their charts. This is an overbought condition but not a sell signal. These ratios need to rise sharply to confirm a sell signal.
In this article from our archives, we delve into the intricacies of option decay, focusing on the differences in how in-the-money (ITM), at-the-money (ATM), and out-of-the-money (OTM) options lose value over time. Recognizing these decay rates is crucial for traders to make informed decisions and develop effective strategies. Here are the key highlights:
Key Points
Decay Rates:
Join Larry McMillan as he discusses the current state of the stock market on June 10, 2024.
We all know there are risks to 0DTE trading – mostly the swift time decay, changing delta and gamma, and potentially violent price moves by the underlying. But serious option traders are not deterred by those things; they can avoid most of them by merely paying attention. It then becomes a matter of how much time do you want to devote to a daily trading strategy. But this week, I read about a different kind of risk – one that I was not aware of, but which is apparently very real. To give credit where it’s due, the following article is based on this article by Cabot Wealth.
Just a week ago, $SPX had broken down below support at 5260, and it seemed like the bears might be flexing their muscles. But it was a weak decline, which abruptly turned around on May 31st. $SPX quickly reached new all-time closing and intraday highs above 5340, and has been able to hold the new highs for two consecutive days. Thus, the $SPX chart is bullish, and that calls for a "core" bullish stance.
Back in 2014, we published an article entitled “Sell In May and Go Away...or don’t.” At this time, we’re going to update the data in that article and discuss what it means. It was in the double issue, TOS Volume 23, Nos. 9 & 10, published on May 23, 2014.
Join Larry McMillan as he discusses the current state of the stock market on May 28, 2024.
