Options

Market Indicators Point To Higher Volatility Near-Term

The current weight of evidence continues to suggest a neutral/bearish toward equities as a whole, with short opportunities available in select areas. One of the reasons for this stance is the potential squeeze that’s setting up in the Volatility Index. There are three charts that suggest Volatility could be headed higher…

Options Traders Look For Q2 Upside In Biotech Stocks

Biotech was a sector that was a notable laggard in Q1 with the Nasdaq Biotech Sector ETF (IBB) down nearly 24% and S&P Biotech Sector ETF (XBI) down nearly 28%. The relative weakness started to show in Q3 and Q4 of 2015 after the group became overheated after an 80%…

Weekend Update: Stop Guessing Where Stocks Are Headed

The Big Picture: Does it seem like it’s hard to make sense of what’s going on in the market?  Guess what?  The market has no idea what it’s doing either. Recently I’ve seen numerous headlines saying the market is “complacent” and I don’t think I can take another one. The…

Has The Stock Market Rally Made Investors Complacent?

Data from the volatility market suggests that stock market expectations in the near-term may have finally gotten a bit too complacent.  For the duration of this post-February stock rally, we have been consistent in noting the tepid, or even skeptical, sentiment readings being generated along the way. Along with strong…

Stock Market Recap And Options Review: March 25 Expiry

The March options expiration ended with all three major stock market ETFs ($SPY, $QQQ and $IWM) finishing higher. $SPY closed well over its 200 SMA and is nearing potential resistance levels. While $QQQ also moved higher lethargically, $IWM consolidated well and broke out of a bull flag higher. $TLT showed…

Weekend Update: Exploring Trends In Market Volatility

The Big Picture: Recognizing our biases in the context of what’s playing out is essential for long term success in the markets. For example, I recognize that I almost always believe stocks should decline. At the same time, I understand that historically they’ve moved higher. The entire investment industry is built…

Is The VIX Signaling A Return Of Stock Market Volatility?

The S&P 500 has rallied over 10% since the February low, push the index up to its 50-week Moving Average. Meanwhile the Volatility Index ($VIX) has declined approx. 47%, sending the ‘fear index’ to its lowest level so far this year. Is this signaling a potential return of stock market volatility?…

Stock Options Indicator Flashes Bullish… With A Caveat

Call buying of stock options has been extremely subdued relative to puts recently – typically a bullish contrarian signal; however… We are not the first or only ones to point out that the current post-February stock rally has been less than enthusiastically received by the trading community. While there are…