Bank Bailouts Explained
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How to Tell if a Rally is Real
Needless to day, I am a bit skeptical to this last break of highs on the S&P500 why might you ask? Because of the VIX. The VIX is a measure of volatility in the markets, when volatility is high the VIX rises, when volatility is low, the VIX falls. As the old saying goes, “when the VIX is low, lookout below.” This is because we see the biggest crashes in the context of a bull market (low VIX) and the…
The Short Squeeze
Short squeezes are something that happen A LOT and they define the professional trader from the inexperienced trader. Once a stock starts to break out or make a move the retail traders begin to chasing the move (because they feel they “missed out”), but the professionals are already in the move. At the point that the professionals are selling, the stock is just making news in the media and CNBC is talking about how this stock is a “great time…
How Do You Know When to Stop Trading for the Day?
We’ve all asked this question, so what’s the answer? Should you stop when a specific $ amount is reached? When a specific # of points have been tallied? When you have 2 losers in a row? Well I can’t tell you what’s right for you, but I CAN tell you what I do. Over the years I have noticed that there are a handful of great days in the month and the rest are simply average. Therefore when I begin…
The Super Bowl Indicator
It has been deemed a Steelers/Packers showdown in Super Bowl XLV. As economists and authors struggle to find a relationship for even the most unrelated items, such as in the book Freakonomics, and Outliers it shouldn’t surprise you that a relationship between the Super Bowl winner and the stock market has emerged over the past 50 years. What Does Super Bowl Indicator Mean? This indicator is based on the belief that a Super Bowl win by the old AFL (AFC division) leads to a…
Economics in One Lesson
The shortest and surest way to learn economics. This book is a great framework for expanding your knowledge of economics.
Options Expiry Week
Week 3 of 2011 kicks off remembering Martin Luther King Jr. We have a shortened week this week and options expiry on Friday along with some big earnings from AAPL on 1/18 and GOOG on 1/20. For those traders who play gaps, options expiry Friday is a day to skip. Trader’s who usually trade the first 30-mins, be extremely cautious on option’s X as market orders are higher than usual during this time. We’re expecting a fairly volatile week for intraday trading.…