Options

Why September OpEx Could Be Very Bullish For Stocks

Next week is options expiration week. From here on out, I’ll just call it September OpEx. Last month, I took a closer look at August OpEx and today I’ll look at what September OpEx has historically done. I’ve long noted how this week tends to go with the overall trend, only it is more magnified. For this reason some of the best weeks the past five years have taken place

Is The Options Market Signaling More Upside For Stocks?

One of my favorite indicators could be flashing a major buy signal here.  I’ve used the 21-day moving average of the CBOE options equity put call ratio a lot the past few months and it has done a good job of predicting things.  Here’s why it could now be sending a bullish signal. First off, to keep this simple, when this equity put call ratio trends lower – it has

Why August Options Expiration Could Bring Some Fireworks

This week is options expiration week, better known as OPEX.  Over the years, I’ve noticed this week tends to go the way of the overall trend, but also tends to be more extreme or magnified.  For example, some of the biggest drops back in 2008 tended to take place during OPEX, while more recently some of the best weeks during this bull market have taken place this week. You could

Chart Flipbook: A Look At Recent Volatility and Sentiment

There were a number of bearish negative divergences emerging in the equity market complex for several weeks. Standing alone, each divergence carries relevance only at the margin, but as they grow the cumulative value becomes a primary market indicator. This may explain the recent volatility in the markets. Below are five examples. For several weeks the micro-cap & small-cap equity indexes were not confirming the new bull market highs of

Blood In The Streets? A Closer Look At Equity Put/Call Spikes

I’ve been talking about the CBOE Options Equity Put/Call Ratio (CPCE) since late June. In fact, I wrote a post about the equity put call chart being one that scares me over at Yahoo Finance last week.  And I continue to think it’s a big near-term concern. First off, to keep this simple, when this ratio trends lower – it has tended to be bullish for the S&P 500 (SPX) and

Why The VIX Could Stay Low For Years

Ah, the VIX.  Everyone’s favorite fear/greed instrument, but in reality it is probably one of the most misunderstood things in all of finance. So many have incorrectly (for years now) said a low VIX is bearish, because it shows everyone is complacent.  This just isn’t true.  The Volatility Index (VIX) is simply a measure of how much traders are willing to pay for various S&P 500 options over the next

What Does The Huge VIX Spike Mean For Stocks?

On Thursday, the S&P 500 dropped 1.18%, ending its streak of days without a 1% move (up or down) at 62 days in a row.  While this streak was significant and worthy of my attention (check out my Tumblr blog), something else occurred that day that caught my eye: the Volatility Index (VIX) spiked. In this piece I want to take a closer look at the VIX and market performance post VIX spikes.

Is Low Volume Signaling An End To The Bull Market?

One of the long used bearish points during this bull market has been volume is light.  The thinking is that low volume is a sign of a lack of participation. And that this will open the door for a big sell-off. The only problem with the low volume argument is we’ve been hearing it for years now. I remember back in September 2009 first hearing this while doing some bull/bear

How Do Stocks Perform The Week After June Options Expiration?

The month of June has been widely cited this year as a seasonally weak period for stocks, particularly because 2014 is a mid-cycle election year. At +1.92% month-to-date, however, June 2014 is hardly measuring up to the calendar’s prescribed pessimism. Stocks may take a turn back toward their historical mean this week, however.  The week following June equity options expiration more than affirms June’s poor reputation, registering average net weekly

What Fed Funds Futures Are Saying About the Aging Bull Market

With the needle buried at 100 since the Fed’s began the Era of Accommodation in late 2008-early 2009 with ZIRP and QE1, Fed Funds Futures have been a worthless point of reference.  But that may be about to change, in more ways than one. Tom McClellan (of the widely-followed McClellan Oscillator and Summation Index) posted a brief analysis (here) on Thursday evaluating the leading relationship between the COT positioning of