For the fifth straight day the market has traded in an extremely narrow range (less than 10 points to be exact). The index hasn’t seen a trading range this tight, for this long, in quite some time. As I have stated over the past few days, extended, low-volatility trading typically leads to sharp moves. My stance hasn’t changed over the past week or so. Given the recent short-term bearish indicators that have piled into the market, the seasonal bearishness that occurs during the middle of October and what seems to be very strong resistance that lies overhead, I can’t help to side with the bears over the short-term. Low-volatility leads to a boring market and repetitive commentary so I will spare you with all of the details that I have mentioned over the past few days. I encourage those of you have not my two prevoius posts to go back and read them. I think you will find them quite useful and interesting during this time of monotonous trading. Also, check out my our new White Paper. Learn the secrets to some of our favorite options strategies. We are very proud to announce the release of our new report “Simple Investment Strategies and Techniques: A Guide to Several Unique Options Strategies that have passed the Test of Time”. Topics include:
- Brief description of Greeks
- Black-Scholes option pricing model (includes Excel model)
- Risk management – Capital Preservation/Position Sizing
- Step-by-step trading guidelines using RSI Wilder (5)
- Step-by-step trading guidelines to our Gap Fade strategy
- Step-by-step trading guidelines to our Short Iron Condor strategy (learn the strategy used by many options professionals and online advisory services)
If you like what you read on a daily basis, you should check out our service! We offer educational tools, research, a semi-monthly newsletter and best of all, detailed trading guidelines to our strategies at Crowder Investment Research, LLC.
RSI Wilder (5) for October 11, 2006
- SPY - 71.0 (overbought)
- DIA - 80.7 (very overbought)
- IWM - 62.6 (neutral)
- QQQQ - 70.0 (overbought)