Elsewhere on the home page, I’ve made much of the fact that the Dow Industrials mechanically tripped a ‘buy’ signal last week. This seems incredible, given the blowback U.S. stocks are getting from a weakening global economy and a domestic downturn that threatens to turn boom to bust in housing and autos. Putting all that aside and focusing simply on the visual picture shown in the chart — the most recent phase of the long bull market — what do you see? Personally, I have little difficulty extending an imaginary rally to the 26,996 target. Harder to envision — and this is speaking from a purely instinctual point of view rather than a technical one — would be a serious slide down to 23,000 and beyond. I’ll remain open to any and all possibilities nonetheless, relying solely on impulse legs to instruct me concerning the mood of investors, and of America.
Believing Our Lying Eyes
- November 19, 2018, 9:42 am
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November 19, 2018, 9:09 am
Interest rates have risen 1000% in this FED hiking period, and to date this hiking cycle is double in length in time then those of over 2 decade and better. The DXY from the start during this phase in the FED hiking cycle is pricing ‘lower’ on todays pricing.
Contract ‘low’ and or ‘high’, is an area to observe with each back month that drops off. Pricing become a process which to act, strategy base on trading ranges or tight pricing causes sentiment towards collecting ‘premium’ (or moving naked) on a monthly basic.
Now, observe major markets with their futures pricing spot points ‘contract high’ and ‘contract low’ points. Several of these major causes one eyes to roll in back of the head, as to what the trading ranges having been creating over the last few years. Indexes in the stock market, Currency, Metal markets suggest such is and has been in play, big time.
Have a great day Rick.
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November 18, 2018, 10:01 pm
Who knows about the Dow.
My question to Rick, is as a pro options trader, what is your opinion of the optionsellers.com NG implosion?
NG was bumping along the bottom for almost three years. Do you think those guys got a bad case of Normalcy Bias and kept selling tons of naked call options, and eventually just quit maintaining a hedge to break even if it hit the fan with that trade?
It seems you had to ante up one million to sit down at their table, so it was not “Widows and Orphans” this time. It is not over yet either.
Will those Call option buyers wind up getting screwed in a bankruptcy filing?
Do tell, Rick!&&&&&&&
They were a factor, John, for sure. It’s easy to lose sight of the fact that each short contract makes one liable for delivery of, what? a bazillion cubic feet of natural gas. RA
I think someone with an eye on the book at the NYMEX saw optionsellers was not properly hedged and slowly started tripping stops of the weak hands to get a trend going. Exchange margin on a NG contract was only $1000 before this blow off. A desk with the working capital, patience, and trading chops seems to have made it happen. Same thing happened in January last year but it died at 3.657. Maybe optionsellers was hedged last year? Lawsuits will reveal who that was. I lean towards one desk because a Wolf Pack approach would risk someone ratting the whole crew out. Time will tell!