The Lonely Trader

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.

Weeklies: #AGU, #FCX, #FXE, #FXI, #HUM, #IYR, #MON, #NFLX, #NTES, #POT, #TBT, #TLT

In Journal on June 27, 2015 at 20:28

So spot #VIX was slightly up this past week but the futures were lower in all months going out to February 2016. Looks like the markets are also saying volatility will stay relatively quiet over the next month or so and increase going into the fourth quarter. This isn’t very surprising. With #VIX relatively low today, the notion of selling options for instruments above a volatility rank of 50% should come with strong caveats.

Event risks are, obviously, Greece and China. I won’t parrot what I’ve read at all the usual places because everyone else has read the same swill and tweeted and re-tweeted a hundred times. I’ll just keep an eye on the headlines for anything meaningful. Chatter in the US markets is not really unusual, so as of now I don’t anticipate any great upset to the stability of the model. Talk of gap opens in spot FX and futs on Sunday, and in equities on Monday am. I’m agnostic.

Looking at the lists, there are a handful of possibilities this week:

20150628 AGU Wkly

#AGU needs to perk up a bit in the premiums to get me interested. I like it from $111.

20150628 FCX Wkly

#FCX is not looking very promising as of the Friday close. I’ll set a limit order at a price that probably won’t trade. If it does, good for me. I like it from the call side because sentiment in the sectors this issue trades in will likely not change in the next week or two and the chatter around spin offs and IPOs hasn’t created any notable price action. CAVEAT: The ranges have been fairly narrow over the past two months, so a price spike isn’t out of the question. I don’t know this stock.

20150628 FXE Wkly

#FXE looks promising from the call side. Unless something happens with Greece in the next week. Everybody is talking about gaps in the euro come the Wellington open, or “interesting” price action. I can’t predict what will happen. From the chart structure, I favor selling call spreads above $112 — which is inside the extreme range high projection but still okay by me.

20150628 FXI Wkly

#FXI could see a bounce but fresh headlines about China’s bear market have me looking at the call side. Need premiums to perk up a bit at the levels I prefer, so may set a limit order and let the market come to me on Tuesday. Test of $44 looks imminent.

20150628 HUM Wkly

#HUM looks promising in the premiums. Not liking the spreads. And the price action is a little crazy…kinda like #NFLX at the moment. I will go in light if I trade this stock. Prefer the call side. That price action is bearish — a retest of last week’s lows is likely. Support just below.

20150628 IYR Wkly

#IYR is probably going to retest $68 in the next couple of months. I just signed a contract for 9.5% below asking. Seller tried to negotiate, but ultimately took my price. This anecdotes further convinces me that I need to stay on the call side of this ETF. My realtor does not share my view, however. The only problem I have is that the premiums are shite at the levels I want. Will monitor.

20150628 MON Wkly

#MON spreads…someone needs to slap the market makers around a little. There’s a free beer in it for anyone who can narrow them. I’ll let the two people who are reading this guess what side I want to be on. The model engine says there are **NO** expansionary ranges in Monsanto’s trading history after last week’s pattern. So that means the extreme H/L levels are “safe” and that I should trade from both sides. Problem is, that levels are safe until they aren’t. This stock can be scary. I like the call side above $110 and a reduced position size.

20150628 NFLX Wkly

#NFLX looks scary every day. That last weekly candle is trying to lull me into a false sense of contrarian security. I won’t let it. The price action on Tuesday will have to be perfect for me to enter. Otherwise, I will run like hell from this one.

20150628 NTES Wkly

#NTES doesn’t look to be worth it, but will monitor. I don’t know this stock. I don’t like the price action at this level. I like the range projects even less.

20150628 POT Wkly

#POT needs to perk up. The premiums suck balls.

20150628 TBT Wkly

#TBT is presenting some opportunities. I like it from the put side – $47 and below. But honestly I am comfortable with trading this from either side…or both…odds aren’t great for a range contraction, but they are even worse for an expansion.

20150628 TLT Wkly

#TLT. See #TBT above.

If I’ve made some mistakes in the analysis, help a brother out.


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