Tim Bovee, Private Trader: Tuesday's Agenda

Tuesday, May 10, 2016

Tuesday's Agenda

Of the three prospects on my desk today, none has passed final screening, each because of low implied volatility. The condition has become so common during this earnings season that I am starting to sound like a broken record.

And it is an unusual condition. This is the ninth earning season I have traded using my volatility-based strategy, and I have never before encountered such consistently low volatility.

I assess the volatility level as a percentile of its most recent range. In the case of DIS in the table below, volatility has moved below the starting point of the recent range, resulting in a negative percentile.

I require volatility in the 60th percentile or higher in order to do a full analysis and, potentially, a trade. That condition has not been met, and so I shall do no full analyses and anticipate entering no new positions today.

sym	range %ile
DIS	-3
HES	22
SLB	13

-- Tim Bovee, Portland, Oregon, May 10, 2016

Supply and Demand Investing
by Clair Edward Leedom III

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.