« July 2017
SunMonTueWedThuFriSat
      
1
2
3
4
5
6
7
8
9
11
12
13
14
15
16
18
19
20
21
22
23
24
25
26
27
28
29
30
31
     
Today


IVolatility Trading Digest™ Blog


Volume 17 Issue 28
Bulls Still in Charge [Charts]

Bulls Still in Charge [Charts] - IVolatility Trading Digest™

Trade selection using volatility as the primary criteria. Different trades for different volatility opportunities.
Please read IVolatility Trading Digest™ Disclaimer at the very bottom of this page

To add comments or to ask questions please click here (or use the blog "COMMENTS" link at the very bottom of the blog page).

Review NotesRotation away from previous tech leaders into select laggards such as materials and industrials helped propel the S&P 500 Index to a new closing high. The market review below explains and includes an update for WTI crude oil from the perspective of the Commitments of Traders Report from the CFTC.

Review NotesS&P 500 Index (SPX) 2459.27 advanced 34.09 points or 1.41% for the week breaking out to make another new closing high on modest volume thereby redrawing the upward sloping trendline, USTL from the November 4 low at 2083.79 as it merges with the 50-day moving average once again. While there is support at 2400 on any decline it would have to first close below both the USTL and the 50-day moving average.

table

StrategySupporting the bullish view both the iShares Transportation Average (IYT) 175.40 and the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) 88.53 made confirming new highs as well. Although breadth remains rangebound it reflects sector rotation and can be forgiven for not advancing, unless it begins deteriorating. As for the challenge of keeping up with sector rotation one alternative is to focus on the SPX or SPY but this risks missing a major leadership change with potentially dire consequences. The previous leaders, the PowerShares Nasdaq 100 ETF (QQQ) 142.12 and the Technology Sector Select SPDR (XLK) 56.86 have yet to make new confirning highs and should they fail at their previous June 9 highs bullish market sentiment could be challenged. For QQQ watch 143.51, for XLK it's 57.39.


You Know What You Want.

To keep more of your own money. Make better than average returns... and fewer mistakes. VectorVest makes it easy to make better decisions. To stay in control as the markets move up and down, with at-a-glance guidance on what and when to buy, sell and hold.

Analyze any stock free. Get your free report.


Crude Oil Update

Crude OilWTI Light Sweet Crude Oil (CL) 46.54 basis August futures advanced 2.31 points or 5.22% for the week, now up against resistance once again at the 50-day moving average the level where it failed July 5after reaching 47.32.

From the Disaggregated Commitments of Traders - Options and Futures Combined report as of July 11 "Managed Money," the group that best correlates with crude oil price changes and arguably the most important, reduced their long position -6,547 contracts and decreased their shorts +35,251 for a net position increase of +28,703 contracts representing 6.25% of the of the open interest up from 5.17% the week before and up from 4.73 % on June 27at the last pivot.

table

Although "Managed Money" added modestly to their net long position for the last two weeks the price chart shows August futures testing the downward sloping 50 -day moving average again, the red line below.

table

From a seasonal perspective, because July is one of the weakest months resistance at the 50-day moving average makes tempting place for speculators to press the short side once again until the end of the month. Then since August is seasonally one of the better months they could begin covering their shorts in an effort to push the price up to the operative downward sloping trendline, DSTL in the price chart above, to about 48.50 by the end of August.

In the meanwhile, the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) September long 33/35 call spread and short 29 put combination idea in Digest Issue 24 "Rotation Hammer [Charts]," could still work if the anticipated August advance happens.

Summary

While the bulls are clearly in charge of the equity markets the advance appears orderly, making new highs and then pulling back to support around the 50-day moving average then advancing once again. Confirmation of the new SPX high by both the iShares Transportation Average (IYT) and the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) adds confidence , however tech and semiconductors are lagging and could become an issue if they are unable to exceed their June 9 highs. For now reasons to consider hedging portfolio risk seem few and far between.

Twitter Follow us on twitter for more ideas from our scanners and other developments.

Actionable Options™
We now offer daily trading ideas from our RT Options Scanner before the close in the IVolatility News section of our home page based upon active calls and puts with increasing implied volatility and volume.

"The best volatility charts in the business."

Next week will include trade suggestions along with another market review and another look at crude oil.

Finding Previous Issues and Our Reader Response Request

PreviousIssuesAll previous issues of the Digest can be found by using the small calendar at the top right of the first page of any Digest Issue. Click on any underlined date to see the selected issue. Another source is the Table of Contents link found in the lower right side of the IVolatility Trading Digest section on the home page of our website.

CommentAs usual, we encourage you to let us know what you think about how we are doing and what you would like to see in future issues. Send us your questions or comments, or if you would like us to look at a specific stock, ETF or futures contract, let us know at Support@IVolatility.com or use the blog response at the bottom of the IVolatility Trading Digest™ page on the IVolatility.com website. To receive the Digest by e-mail let us know at Support@IVolatility.com

 

Comments:


Permalink Comments [0]

Post a Comment:

Name:
E-Mail:
  Email (will not be shown)
URL:

Your Comment:

HTML Syntax: Off


IVolatility Trading DigestTM Disclaimer
IVolatility.com is not a registered investment adviser and does not offer personalized advice specific to the needs and risk profiles of its readers.Nothing contained in this letter constitutes a recommendation to buy or sell any security. Before entering a position check to see how prices compare to those used in the digest, as the prices are likely to change on the next trading day. Our personnel or independent contractors may own positions and/or trade in the securities mentioned. We are not compensated in any way for publishing information about companies in the digest. Make sure to due your fundamental and technical analysis homework along with a realistic evaluation of position size before considering a commitment.

Our purpose is to offer some ideas that will help you make money using IVolatility. We will also use some other tools that are easily available with an Internet connection. Not a lot of complicated math formulas but good trade management. In addition to Volatility we use fundamental and technical analysis tools to increase the probability of success and reduce risk. We prepare a written trade plan defining why the trade is being made, what we call the "DR" (determining rationale) and the Stop/unwind, called the "SU".