Friday, January 23, 2015

Fridays Finalists: Full universe

Sometimes the Guardian Angel of Analysis (also known as the Power Company) plays a dirty trick as the analytical routines I wrote grind their way through eight hours of work.

That happened last night, as a power failure, forcing me to go to Plan B: A quick analysis of a smaller universe of symbols -- the large caps. I've now completed the full analysis, and is is a retrospective report on what happened to the survivors in today's trading.

DAL confirmed its bull signal by trading above its 20-day price channel. Its options are liquid and it is a candidate for a trade under my short-term rules. Analysis over the weekend or on Monday.

BBL with a bull signal. That signal comes along with an illiquid options grid, with open interest in the double digits. I'm looking for the liquidity and hedging abilities that options bring, so I've voted BBL off of the island, leaving me without anything to analyze from Thursday's markets.

XLV failed to confirm its bull signal by trading below the upper boundary of the 20-day price channel.

By best chance for a volatility play coinciding with an earnings announcement was DHI, which announces Monday prior to the opening bell. However, the bid/ask spread on at-the-money calls in the JAN5 series of Weeklys, the series I would trade, is in the double digits, too wide for my taste.

-- Tim Bovee, Portland, Oregon, Jan. 23, 2015


My shorter-term trading rules can be read here. My longer-term trading rules can be read here. And the classic Turtle Trading rules on which my rules are based can be read here. My volatility trading rules can be read here.


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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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