I will be relocating this blog to my new website and twitter account where I’ll be posting market commentary and option trades daily on my new twitter account @classicoptions and would greatly appreciate it if you come and follow, like and retweet as I place trades. I will leave all the resources on this blog up for anyone who wishes to continue to use and reference it. Hope to see you there, leave a comment or two and say Hi. Good luck trading!
Percent Buy Index (PBI) – Buy and sell signals on cross over of the 32 EMA.
NYA Bull Market – Watch for upward cross of zero line for a bullish confirmation.
$RHNYA – NYA Record High – When 10 DMA crosses above 60 indicates a new rally. A cross below 20 indicates oversold condition.
$SKEW – According to CBOE, a reading of 100 means that the probability of a black swan event is negligible. At 115, there’s a 6% risk of one. At 135, there’s a 12% risk.
$VIX:$VXV– Low readings produce market declines.
$NYAD:$CPC – Look For +- divergence. Watch for Sell signals when crosses below -400, buy signals crosses up +400.
$CPCE – $SPX DAILY, $CPCE DAILY. The 10-period MA of the put/call ratio usually turns before the market does, forewarning traders of an impending reversal. By monitoring the put/call ratio, we can determine the amount of bullish or bearish sentiment. Low readings mark overbought conditions and levels of complacency. High readings mark oversold conditions and levels of capitulation.
Advance Decline NYAD – An advance with narrow participation is unlikely to keep up with the underlying index and a bearish divergence (chart here) will form. Similarly, a decline with narrow participation is unlikely to keep up with the index and a bullish divergence will form.
$SPXEW:$SPX – Look For +- divergence
!PRBFISH – Bottom Fishing. This indicator is used to locate only bottoms in markets.
!GT20SML – Another indicator for locating potential bottoms in bull markets. Under 30 markets a buy.
$SPXA50R – Stocks above their 50 DMA, look for a break of 25 or 75 for major tops and bottoms.
$NYA200R – Look for divergences forming on stocks above their 200 day moving average.
S&P In Relation to Its P/E – The normal range for the GAAP P/E ratio is between 10 (undervalued) to 20 (overvalued). The following chart shows the S&P 500 Index in relation to this range.