March 2007 - Posts

• April tendencies and the current state of the market

  Friday, March 30, 2007 9:44 PM

  Today's price action was practically identical to yesterday's. The trading day starts out strong and fades until mid-day where it hits what has proved to be fairly strong support (1412 area on SPX) and then begins the climb back up into the close. As I stated yesterday, the price action seems to be the typical end of the quarter window dressing especially given the lack of volume during the end of the day ascent Read More Posted by acrowder 0 Comments Go to top

• Intra-day Reversal Window Dressing? Overwhelming Short-Term Seasonal Bias Ahead

  Thursday, March 29, 2007 10:40 PM

  The market moved sharply lower shortly after the open only to reverse itself 90 minutes before the close of the trading day. Was the intra-day reversal just end of the month/quarter window dressing or an early start to the upcoming positive seasonal bias? My guess is the former, but it is just that, a guess Read More Posted by acrowder 0 Comments Go to top

• Short-Term Seasonal and Technical Picture

  Wednesday, March 28, 2007 11:06 PM

  The month of March and the first quarter are finally winding down. As you can see below the major benchmarks are nearing an oversold state. The next two trading days are historically weak with the probability in the S&P of a advancing day at only 33% and 48% Read More Posted by acrowder 0 Comments Go to top

• Iron Condor Strategy

  Wednesday, March 28, 2007 2:41 AM

  Iron Condor Strategy Several successful options-based newsletter services use the Short Iron Condor strategy as their “bread and butter” trading strategy. They disguise it by calling it other names or say it is a proprietary model/formula that they have created, when in fact the Short Iron Condor strategy is mentioned in most of the prominent options strategies texts Read More Posted by acrowder 0 Comments Go to top

• Futures pointing to further declines

  Tuesday, March 27, 2007 10:54 PM

  The anticipated short-term decline finally came today and the major indices we follow (with the exception of the S&P (SPY)) are firmly entrenched in neutral territory. As I write this futures are lower across the board. This will obviously help out our current condor position and should give us some breathing room for the moment Read More Posted by acrowder 0 Comments Go to top

• Short-term bearish bias

  Monday, March 26, 2007 9:38 PM

  A sharp decline occurred immediately following the the surprisingly poor housing news (new home sales fell 3.9%) from the Commerce Department at 10:000 EST. However, the steep decline was recovered by the end of the trading day. As a result, the market is still within the range that established towards the end of last week Read More Posted by acrowder 0 Comments Go to top

• Short-term bias leans towards the bears

  Friday, March 23, 2007 11:55 PM

  The S&P experienced the best one week performance since March 2003. After a nice rally Monday-Wednesday, the market was unable to continue the surge higher during the last two trading days of the week and as a result traded in a very tight range. As I have stated many times in the past, this type of price action (substantial advance followed by tight range-bound price action) typically leads to a short-term reprieve particularly when the market is in an extreme overbought state Read More Posted by acrowder 0 Comments Go to top

• Short-Term Post-Fed Reversal

  Thursday, March 22, 2007 9:32 PM

  After the best three day performance since November 2004 the major benchmarks traded in a fairly tight range and finished the day basically flat. The benchmarks were unable to work off the overbought conditions so I still anticipate that the market will experience a short-term decline over the next few days Read More Posted by acrowder 0 Comments Go to top

• Overbought! Largest three day advance in months.

  Wednesday, March 21, 2007 10:22 PM

  Immediately following the Fed announcement at 2:15 EST the market surged higher which pushed all of the major benchmarks into an "overbought" to "very overbought state". Typically, when the market moves sharply in one direction it is often reversed within a few days Read More Posted by acrowder 0 Comments Go to top

• Be aware of a potential false breakout

  Tuesday, March 20, 2007 9:23 PM

  The market continued to rally today and has pushed the major indices near an overbought state. Our shorter-term overbought/oversold measures are nearing an extreme so more than likely we will see a short-term decline or pause very soon. As I stated yesterday the 141 level of SPY (1410 on the SPX) should prove to be an important area of resistance Read More Posted by acrowder 0 Comments Go to top

• Iron Condor Position and the Rally

  Monday, March 19, 2007 9:25 PM

  We established our SPX short Iron Condor trade with a 140 point range. We were able to get in at the open before too much premium was sucked out. There are many ways to use this strategy and over the course of the next year or so I will randomly (when the situation arrives) talk about various ways to effectively use this strategy Read More Posted by acrowder 0 Comments Go to top

• Premium is back!

  Friday, March 16, 2007 10:05 PM

  Volatility has finally made its way back into the market. For months the market had been lulled into a period of complacency and as a result, option premium suffered. The VIX, often referred to as the "investor fear gauge" touched historical lows months ago and remained there for what seemed like an eternity for option sellers Read More Posted by acrowder 0 Comments Go to top

• Short-term Seasonal Weakness Lies Ahead

  Thursday, March 15, 2007 11:20 PM

  I am going to keep it very brief tonight. Short-term seasonal weakness lies ahead. Every month around options expiration I state that the trading day following options expiration is bearish and I do not expect price action to be much different this time around Read More Posted by acrowder 0 Comments Go to top

• Today's Reversal and Extra Premium

  Wednesday, March 14, 2007 9:33 PM

  The "potential short-term bounce in the making" that I talked about yesterday occurred as expected. SPX hovered above the 1374 support area that I mentioned yesterday for the first half hour of the trading day before fall ing back to the 1374 support area that I have talked about over the last few days Read More Posted by acrowder 0 Comments Go to top

• Spike in premium should bode well for the SPX Short Iron Condor Strategy. Potential short-term bounce in the making.

  Tuesday, March 13, 2007 9:32 PM

  The heavily anticipated short-term decline came today. Our measures are now oversold (SPY) to near oversold. Ideally, I would like to see an additional push lower before taking a position so until then, as always, I will wait patiently on the sidelines Read More Posted by acrowder 0 Comments Go to top

• How long before the bears reappear?

  Monday, March 12, 2007 9:34 PM

  The market managed to squeak out a small advance today. The advance over the last few trading days seems to be running out of steam. Our daily overbought/oversold readings on the major benchmarks (below) are currently in a neutral state, however, our shorter-term overbought/oversold measures are nearing an extreme state Read More Posted by acrowder 0 Comments Go to top

• Will the market test the recent lows?

  Friday, March 09, 2007 11:33 PM

  The bulls had a decent week, but it seems as though there is a lack of conviction in the attempted push higher. This often leads to struggles, at least in the short-term, going forward. So obviously I do not think the bulls are out of the woods yet. Historically, the week of options expiration is fairly strong with Tuesday being the best performing day on average Read More Posted by acrowder 0 Comments Go to top

• SPX Iron Condor

  Friday, March 09, 2007 4:19 PM

  Several successful options-based newsletter services use the Short Iron Condor strategy as their “bread and butter” trading strategy. They disguise it by calling it other names or say it is a proprietary model/formula that they have created, when in fact the Short Iron Condor strategy is mentioned in most of the prominent options strategies texts Read More Posted by acrowder 0 Comments Go to top

• Introducing the New SPX Short Iron Condor

  Thursday, March 08, 2007 10:19 PM

  Several successful options-based newsletter services use the Short Iron Condor strategy as their “bread and butter” trading strategy. They disguise it by calling it other names or say it is a proprietary model/formula that they have created, when in fact the Short Iron Condor strategy is mentioned in most of the prominent options strategies texts Read More Posted by acrowder 0 Comments Go to top

• Where will the consolidation lead?

  Wednesday, March 07, 2007 9:57 PM

  Will the recent consolidation lead to another test of the recent lows? As I have stated over the past few days, I think so. While the market moved notably higher yesterday it still was unable to move our overbought/oversold significantly higher. Furthermore, our shortest-term overbought/oversold indicators still have plenty of room until the probability for a short-term decline is significant Read More Posted by acrowder 0 Comments Go to top

• Anticipated Short-term bounce occurs. What next?

  Tuesday, March 06, 2007 9:44 PM

  The anticipated bounce off very oversold levels occurred today. The move was sharp, yet it still was unable to bring the major benchmarks above 50 which is often a sell signal for many traders. I expect to see the push higher continue until weeks end, but I am still somewhat leery about the sustainability of the move Read More Posted by acrowder 0 Comments Go to top

• A surge in the VIX

  Monday, March 05, 2007 10:43 PM

  Volatility has picked up at an alarming rate. On Feb. 22 the VIX hit 10.01 and today it had a high of 20.41. A 100% gain in just seven trading days. The market hasn't seen a surge in volatility like that in years. Is this the beginning of a seller's market Read More Posted by acrowder 0 Comments Go to top

• SPX is back near Tuesday's low. The VIX back near Tuesday's high.

  Friday, March 02, 2007 9:23 PM

  The near Tuesday's low today. The push lower moved the major benchmarks into "very oversold" territory" which in most cases creates a good opportunity for a short-term play. However, our shortest-term indicators still have a bit of room left on the downside which makes me somewhat hesitant to step in at this juncture Read More Posted by acrowder 0 Comments Go to top

• Macey Returns! Patience is the key!

  Thursday, March 01, 2007 10:23 PM

  I am going to keep this very short tonight as my daughter of 6 months, Macey, returns from her first extended trip away from dad. The market is currently working through the last three days of crazy trading. I stated this week would be pivotal for the market and indeed my thoughts have come true Read More Posted by acrowder 0 Comments Go to top

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