McMillan Analysis Corp. is pleased to announce a series of informative webinar/chat sessions with Lawrence G. McMillan, author of Options As A Strategic Investment.
Join us online at 9:30 am (Eastern time) on specific Saturday mornings for a couple of hours of market discussion and option strategy.
Attendees will have full access to Lawrence McMillan’s extensive experience and knowledge of the option markets; questions will be welcome.
This article was originally published in The Option Strategist Newsletter Volume 13, No. 4 on February 26, 2004.
As we’ve mentioned before, the CBOE is about to offer us the ability to trade volatility. We expect this to be a very successful product – perhaps the most successful new listed derivative product since the introduction of index options over 20 years ago. We want you, our readers, to be prepared for this event. Hence, we will run a series of short articles prior to their introduction, to ensure that everyone knows the facts and understands the basic strategies.
This article was originally published in The Option Strategist Newsletter Volume 14, No. 16 on August 25, 2005.
Most traders realize that leverage is available through margin accounts, futures, and options, but give it little thought in terms of constructing strategies or even in terms of developing broader trading plans – i.e., business plans.
...The market seems a little tired, but there are no confirmed sell signals at this time. As an aside, though, we have always kept track of the Arms Index (named for the late Dick Arms, its inventor, but sometimes also called the TRIN). It seems to have lost some relevance in recent years, but there is one thing that is noticeable: when the 10-day moving average of Arms gets down to 0.81 or lower, a tradeable market correction is not far off. The last few times this has happened, the 10-day MA of Arms fell to that level and then rebounded sharply, leaving a “V” on its chart. It is at that level now. It is rare for the Arms Index 10-day MA to drop this low. The last few times it was this low are listed below, along with a quick summary of what happened next.
Once $SPX broke out over resistance at 2940, especially considering that it was a strong gap breakout, it has not looked back. There was a slight consolidation in the 2960-2980 range, and now the Index is apparently on its way to challenge the all-time highs at 3025. The chart will be bullish as long as $SPX continues to close above 2940.
Equity-only put-call ratios continue to drop and thus they remain on the buy signals that were generated in late August.
$SPX has broken out above resistance at 2950, and that has changed the picture to a bullish one. There is now strong support at 2940 the top of the previous trading range that $SPX traversed six times (three up, three down) during the month of August. A close back below 2940 would be negative, because that would bring $SPX back into the trading range once again.
Teh equity-only put-call ratios remain on buy signals, and now the Total put-call ratio has joined in with a buy signal as well.
I’ve just finished putting together a free Special Market Report with some of my fellow traders and investors. Inside, it’s loaded with 19 detailed strategy guides explaining our favorite techniques for leveraging today’s highly volatile markets, including my chapter on Trading the $VIX Futures Term Structure.
Once again, $SPX has traversed the 2825 to 2950 range twice in the past week. First, it fell nearly the entire length of the range in one day (August 23rd) and then has come all the way back to the top of the range in the remaining four days. A breakout above 2950 would be bullish, but a breakdown below 2825 would be very bearish.
In a somewhat major new development, both equity-only put-call ratios have rolled over to buy signals in the last two days.
Capital Trading Group, LP (“CTG”), an investment firm specializing in execution and account management for commodity trading advisors, has announced the release of its new Managed Futures Podcast hosted by firm principal and alternative investments specialist, Nell Sloane.