We continue to get questions regarding why the $VIX futures are priced as they are, and how one should interpret that information. This is a subject that we have discussed many times in the past, but it is probably worthwhile to review it again.
There are two significant pieces of data that one should always be aware of, when evaluating $VIX futures: 1) the relationship of the futures to $VIX itself,
The market action in the last 10 days has been a complete whipsaw. Now, the chart of the Standard & Poors 500 Index ($SPX) shows the index to be in a trading range -- bounded by resistance at 1880+ (the all-time highs) and support at 1840 (last Friday's lows).
Equity-only put-call ratios remain on sell signals, even though the market has bounced back this week.
There will be a very slight alteration of our publishing schedule. The second issue in March will be published one day early, on Wednesday, March 26th. This is because of the AAPTA Conference in Austin, to which I will be traveling on Thursday, March 27th (the usual publishing day).
When one is using technical systems for trading, it seems logical to expect that when two or more systems are giving similar signals, the result should be better than when a lone system is generating a signal. But does an analysis of the results confirm that fact? In this article, we’re going to look at a couple of our own systems and determine when they had coinciding signals.
We are proud to announce the release of Option Workbench 3.0. This upgrade to Option Workbench puts even more power in your hands with these new features:
This stock market has been able to ward off even a modest correction since the fall of 2012. However, we are now seeing a chart breakdown accompanied by sell signals from some of our most trusted indicators. If the bears can't make some hay with this environment, I would be surprised.
Equity-only put-call ratios have rolled over to sell signals.
And so it begins. Sell signals have been registered, and it is possible that more will follow. $SPX closed off nearly 10 points yesterday, as attempts to rally all afternoon eventually failed, and the index closed near its lows. S&P futures have traded another 5 points lower overnight. This activated the “modified Bollinger Band” sell signal.
Often at expiration, an option trader will have in-the-money options that need to be either exited or rolled. Market makers know this and purposely widen the spreads in the market so that the bid for the option is below parity. On expiration day, the option has a value of at least parity so the astute trader must always make sure he exits the position at parity or higher. For a put, parity is the strike price minus the underlying price.
This week's action makes the $SPX chart bullish (how could it be anything else when trading at new all-time highs?).
There is no technical resistance for a chart at new all-time highs. There is support at 1850 (which had been resistance), then at 1825- 1835 below that. It is our opinion that a close below 1825 would be quite negative.
Equity-only put-call charts continue to be bullish.