Stocks & Bonds

Energy Sector (XLE): Still Digesting 2014 Massive Price Shock

The energy sector is struggling and it’s pretty clear the whole industry needs more time to recover from and (more importantly?) adjust to last year’s massive price shock. And this shows up on the chart for the Energy Sector ETF (XLE) Looking at the chart below, there are a few takeaways that are important to note. Underlying breadth leads price to new lows. Momentum divergences failed to lead to a rally.

Welcome To July: When The VIX Comes To Life

Welcome to July, the month that has seen the highest average VIX return out of the entire year. Honestly, I first noticed this last year and was surprised by it. You’d think the dog days of summer are boring, but July is anything but that. Here is what the Volatility Index (VIX) has done the past 25 years. As you can see, July is up just over 10% on average

Trading Ideas: 5 Stocks To Watch (FB, GOOG, TWTR, MDXG, ZIOP)

It is easy to point the finger at Greece as the culprit behind Monday’s mega sell-off, but it is impossible to deny that there has been an ongoing distribution among select US stock sectors for several months. Viewed from this perspective, yesterday’s price action among the major indices could simply mean the underlying weakness finally made it to the market’s surface. Regardless of what happens with Greece, the US market

High Yield Bond Divergence: Signaling Caution For Stocks Again?

If there is one bonds chart that has signaled trouble in the past its the Pimco High Yield mutual fund (PHDAX). The chart below looks back over the past 25 years and highlights a couple notable bond divergences: 1999 and 2007. Those divergences became market “problems” when the high yield fund broke down below intermediate support. Once the high yield bond market broke support, the broad markets turned weak together.

Professional Trading Insights: When Everything Goes Wrong

Regardless of your investing or trading strategy, prowess or experience, there will be times when everything (and I mean “everything”) goes wrong. I share this experience more as an educational piece on the realities of trading than anything else. For me personally, last week was one of those weeks where nothing worked. While the S&P 500 and the Russell 2000 had fairly mild pullbacks of around -0.4%, my Tactical Alpha portfolio

Market Update: S&P 500 Technical Support Levels In Focus

So as the Greek drama continues to unfold with the looming referendum scheduled for this coming weekend and Greek banks closed until next week, it’s important to get a handle on the markets and where key technical support levels are. Having a plan helps active investors to be more proactive than reactive, and this reduces day to day emotion. Starting with the S&P 500 (SPX), my first level of technical support resided at

Stock Buybacks: Where Is The Incentive?

Stock buybacks have become extremely popular over the last ten years. In our article Corporate Buybacks; Connecting Dots to the F-word we explained the fundamentals behind a traditional share buyback as well as the negative attributes of stock buybacks that are largely being ignored. Investors should be aware that all is not that meets the eye in regards to buybacks. In our opinion, the main driver of stock buybacks resides in

Palladium Correlations: Flashing Caution For Apple (AAPL) And The Nasdaq?

I have done several charts in the past looking at Palladium correlations, and specifically Palladium and it’s correlation to Apple (APPL). If you find correlations and price relationships interesting, do yourself a favor and spend some time starting from the beginning (which is at the bottom of the page in the link) and work through risk management and understanding the dynamics at play. As of Friday June 26, 2015 Palladium has broken

Consumer Discretionary ETF (XLY): Short Put Options Trade – Again

I believe the SPDR Consumer Discretionary ETF (XLY) may be primed for another short put options strategy. Last week, the ETF went on to rally 0.6 percent. Thus, the premium earned selling weekly June 26th 77 puts was kept. Could this work again on XLY? To refresh, in our hypothetical example on June 1, June 5th weekly 76.50 calls were sold for $0.47. At expiration, the calls were in the

Netflix (NFLX): An Options Strategy For Bearish Traders

Netflix (NFLX) stock has had a mammoth run up since early April moving from $420 to just over $700 in under 3 months. That’s an astonishing 68% return. Fantastic if you were able to take advantage of it. However, over the last 3 trading days, the stock has sold off on heavy volume and it makes sense that the stock would pause here or even have a mild pullback. The