And ASPS, as it turns out during second-round analysis, has low open interest on its options, running mainly at none for most strikes in the front month, with the occasional single- and double-digit strike. I can't construct a bear play out of such illiquid options.
I then turned to the supplemental list of large-cap symbols that are potential bear plays. For this list, I don't screen for odds of success but I do eliminate symbols within 30 days of an earnings announcement.
I generate this list of breakouts to the downside because the markets have been in an uptrend for a very long time. Therefore, many symbols have no history of bear signals, a fact that distorts my ability to trade in downtrending markets. Also, bear plays require more liquidity than bull plays do, and restricting the list to large-cap stocks increases of chances finding something I can trade.
The list ensures that I get a more complete picture of potential practical bear plays, despite the factors that make trades in that direction more difficult to find.
The sole survivor of first-round analysis for the supplemental list was JNPR, and it has failed confirmation in the second round, rising back within the 20-day price channel.
I am bereft any symbol from Monday's markets to analyze and trade, so I shall turn my attention to other projects and hope that the morrow will bring more prospects my way.
One symbol from the Roll Shelf, the bear play VOD, broke above its 10-day price channel on Monday and appears to be likely to confirm the signal today. Confirmation, if it persists into the half hour before the closing bell, will require that I end the VOD bear series, remove it from the Roll Shelf, and calculate results.
See "Tuesday's Prospects" for a description of my first round of analysis.
My shorter-term trading rules can be read here. And the classic Turtle Trading rules on which my rules are based can be read here.
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.
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