Monday's Agenda update

Having gotten my earnings plays out of the way (see "Monday's Agenda"), I now turn toward the trading signals from Friday.

BAC, BBT, SCHW and USB all gave bull signals on Friday by closing above their 20-day price channels. All have low implied volatility relative to their respective one-year ranges, making them candidates for covered calls or some other time spread, such as a diagonal or calendar spread.

I'm looking for neutral trades, so my first screening is reject symbols that have a Zacks score other than a neutral 3. SCHW has a bearish score and so out it goes.

The final three are excellent prospects. Without the full analysis, there is little to choose among them.

Like all speculators, I live within limited resources. There are always too many opportunities and too little free cash to take advantage of them all.

My goal is to find one time spread out of this group. So what's a trader to do?

In this case, I'll do the obvious. A truism of trading is the the higher the volume, the narrower the bid/ask spread, and narrow spreads are considered to be a very good.

I've sorted the symbols in descending order by volume -- BAC, USB and BBT -- and shall analyze in that order. The first one to produce the trade ends the sequence, and the other symbols head for the shredder.

-- Tim Bovee, Portland, Oregon, Oct. 26, 2015

References

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

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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.

License



All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at www.timbovee.com.