Tim Bovee, Private Trader: Tuesday's Agenda

Tuesday, May 3, 2016

Tuesday's Agenda

The eight prospects on my desk today all have implied volatility that is too low to support a trade.

I judge volatility as a percentile of its most recent range, and for trades, I require that it be in the 60th percentile or greater.

This is because part of my profit comes from collapsing volatility, especially after an earnings announcement. The lower the volatility, the less the collapse.

The highest volatility among the eight symbols is DVN in the 27th percentile. None are close enough to meeting my standard to have a reasonable chance of improving sufficiently during the day.

So, I plan no analysis today and won't open new positions.

A table of the prospects and their volatility percentiles:

sym	range %ile
DVN	27
SM	37
BIDU	22
CL	22
NWL	13
PPL	21
RSG	1
WM	-3

-- Tim Bovee, Portland, Oregon, May 3, 2016

Fire Your Stock Analyst
by Harry Domash

References

Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.

Elliott wave analysis tracks patterns in price movements. StockCharts has a good explainer. The principal practioner of Elliott wave analysis is Robert Prechter at Elliott Wave International. His book, Elliott Wave Principle, is a must-read for people interested in this form of analysis, as is his most recent publication, Visual Guide to Elliott Wave Trading.

I can be reached via comments on Private Trader posts or by email at datnillc@gmail.com.

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Disclaimer

Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.