The Lonely Trader


In Journal on July 5, 2015 at 15:53

VIX has spiked to the highest levels since January and #SPX has pushed modestly through near term support. Volume profile analysts are probably cooing about their nodes — 2060 held back the sellers. We shall see this week. (I stand by my theory that support and resistance lines — or supply and demand levels or whatever people like to call them — are just as effective. And cleaner.)

Greece, China, Puerto Rico, and the jobs data that nobody believes anyway: It was all a conspiracy. If you believe in that sort of thing. Whatever the causes, the US indices have had a bit of a reset. Enough of a reset (probably) to pique the near term interest of the BTFD crowd. I’m guessing that they are waiting to see if the above event risks have an outsized impact on the markets.

So I’m staying with the idea that — in the US and Europe at least — three will be no sharp sell-offs of more than a few percent. Maybe a nice stab lower…but nothing alarming for this week…I hope. Having said that, there will probably be no sharp bounces either. Let’s see what happens overnight and on Monday.

This week’s list includes ADP, AGU, EFA, EBAY, EWW, SBUX, SNDK, YELP, YUM, WMT, and WYNN. Depending on the data I pull tomorrow evening, this list could expand to CSCO, DBA, FAST, IWM, LOW, PAYX, PCLN, SPY, TWTR, TZA, V, VXX,  XRT and YCS.

20150705 0 Equities Sht Vol Wkly Rankings

20150705 0 ETFs Sht Vol Wkly Rankings

Again, these instruments are ranked based on statistical patterns and volatility rankings. The real fun begins when hunting for sufficient premium and narrow (-ish) spreads at the right OTM strikes. I never know which stocks or ETFs to select until the day of, which is usually mid-morning or early afternoon on Tuesdays when I can sneak away from my damn desk…

Eniways…comments for each instrument are *below* the chart.

20150705 ADP Wkly

Last week I wrote that I liked ADP from the call side…I still like it from the call side.

20150705 AGU Wkly

I like AGU from the call side.

20150705 EBAY Wkly

I like EBAY from the put side, but concerned about the broad effects of Greece and China on US equities like EBAY. Gotta be careful here.

20150705 EFA Wkly

Last week I liked EFA from the call side. The euro is currently rallying in Wellington…complicates things a bit, but I still like EFA from the call side.

20150705 EWW Wkly

I like EWW from the call side. Generally bearish on Mexico, but not for the same reasons as Donald Trump.

20150705 SBUX Wkly

Going to step back from SBUX, but if I had to pick, I would say from the put side. Coffee futs are in the toilet, but my morning latte isn’t getting any cheaper. Assholes.

20150705 SNDK Wkly

Last week I said I liked SNDK from the call side. Very bearish chart structure. Still staying with that.

20150705 WMT Wkly

I like WMT from both the call and the put side. This might be a good iron condor play, but I would lean toward the call side first.

20150705 WYNN Wkly

I like WYNN from the call side. Been burned on this one before…may stay away.

20150705 YELP Wkly

Very bearish chart structure for YELP. Some interesting price action at this level. I like the call side.

20150705 YUM Wkly

If we leave the Shanghai Exchange thing out of the equation, there is potential for a continuation move. I like the put side, but that’s crazy talk. If I trade YUM this week, it will be from the call side. But I probably won’t trade YUM this week because I am not very good at this game anyway.








By request: #TNA

In Journal on June 29, 2015 at 19:12

Buddy from my USMC days trades TNA almost exclusively. Sells premium in the money on both sides. He’s a rock star.

20150629 TNA Wkly

Given that this week the probabilities favor an expansion and today’s price action was extremely bearish, I would trade from the call side. Having said that, there is a lot of support just below and the longer term structure is still very bullish. Pretty significant support seems to be sitting between $85 and $80.

If I were already short calls — like my buddy is — I would take some profit just above and be ready to exit at any sign of a rejection. Not sure when I would flip to selling from the put side. Greece and China seem to have everyone on edge.

Monday update: #ADP #C #CTXS #EFA #FCX #HPQ #MOS #SNDK #UNP #T

In Journal on June 29, 2015 at 18:54

New stocks (and one ETF) added with a volatility rank above 50%. Premiums will be a challenge with almost all of them. To include the stocks and ETFs on the Sunday list. In some cases, I may have to move closer in on the strikes and/or move out on the calendar.

Will volatility continue to expand through Wednesday / Thursday? Dunno. Tomorrow afternoon, I will be looking at yesterday’s list as well as today’s additions and any other instruments that have a volatility rank above 50%. With all the risk in the markets and with the upcoming US holiday (you know, when we beat the British — with the help of France — and won our independence from a crazy monarchy), this could be an interesting week.

20150629 0 Equities Sht Vol Wkly Rankings

20150629 0 ETFs Sht Vol Wkly Rankings

Individual names and their projections are below — note that these projections are based on the weekly close (last Friday). The volatility rank and beta figures are as of today, Monday.

20150629 ADP Wkly

#ADP from the call side after today’s dive. Ideally I’ll want a bounce early tomorrow and then a failure later in the morning or into the afternoon. Except for the shenanigans back in Sept/Oct/Nov, the ranges on this stock are fairly stable.

20150629 C Wkly

#C from the call side. Lot of risk in financials right now so I just don’t see C spiking to the high side…or at any rate, spiking beyond the extreme range project. The challenge will be to find good premium out past $58. (A challenge with every stock and ETF within this model.)

20150629 CTXS Wkly

#CTXS from the put side. Favoring a continuation higher but would like to see a test lower tomorrow…

20150629 EFA Wkly

#EFA from the call side. Pretty big gap, so let’s see what happens tomorrow. If I can find the premium, this will be a beauty.

20150629 HPQ Wkly

#HPQ from the call side. This chart is unbelievably bearish. May come inside the extreme range level to find good premium.

20150629 MOS Wkly

#MOS from the put side. Bearish structure but that was an impressive rejection of the $44 level. Very strong odds of a contraction, so may come in a bit to find premium.

20150629 SNDK Wkly

#SNDK from the call side. Very bearish structure. Premiums will be a challenge.

20150629 T Wkly

#T from the put side. Some retracement today, but not nearly as much downdraft as in the broader market. Not really excited about this one but if the premium is there I’ll take it.

20150629 UNP Wkly

#UNP from the call side. Very bearish, but with possibility for a bounce at $95. If there is a bounce, I don’t expect much of one.


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