On Thursday, March 31:
Of 492 large-cap stocks and exchange-traded funds in my analytical universe, seven broke beyond their 20-day price channels, six to the upside and one to the downside. None survived initial screening.
There are no prospects for trades coinciding with earnings announcements.
I shall do further analysis on Friday, April 1.
Earnings season begins April 11. The higher pace of announcements will continue for about four weeks.
Thursday, March 31, 2016
Thursday's Outcomes
I placed no trades today.
I posted a list of potential earnings plays that I'll be considering next week, and also an essay on methodology that attempts to bring more rigor to my exit strategies. See "Next week's earnings plays" and "When to Skedaddle".
I posted a list of potential earnings plays that I'll be considering next week, and also an essay on methodology that attempts to bring more rigor to my exit strategies. See "Next week's earnings plays" and "When to Skedaddle".
-- Tim Bovee, Portland, Oregon, March 31, 2016
When to Skedaddle
skedaddle (verb.)
1. To move or run away quickly.
Etymology: 19th century US. Probably an alteration of British dialect scaddle (“to run off in a fright”), from the adjective scaddle (“wild, timid, skittish”), from Middle English scathel, skadylle (“harmful, fierce, wild”).
Synonyms: Flee, vamoose, Scat, take off, make tracks, get lost, high tail
Whether a trader decides to skedaddle, vamoose, or high tail it out of Dodge, the skill behind the words is part of the core of successful trading
Hang on to a position too long -- "It has got to get better, right?" -- and the losses continue to mount as hope flees until, at last, the dread day of reckoning comes, in my case usually when the options expire on a sad, useless losing position that ought to have disappeared long ago.
For winning trades, getting out is easy. I have set a somewhat arbitrary rule that when the profit has reached 50% of its maximum potential or greater, I take the profits and use them for other trades.
Exiting a losing trade is far more ambiguous. There are no objective criteria. The reason for entering the position is in the past and all I'm left with is the buzzing confusion of short-term trends and daily movements that tend to obscure more than they illuminate.
I must confess, that I have never had a really good rule for telling me when it's time to skedaddle from a losing positions.
It's a problem. It needs mending. And so I shall do.
Beginning today I intend to exit any position where the loss is 1.5 times the premium I received or greater. For example, if the premium is 50 cents a share, then the the 1.5 times mark would be $1.25 (75 cents more than the 50 cent premium).
The calculation is to take the premium, multiply it by 1.5 and then add it to the premium in order to get the loss price for the options.
It may be that 1.5 times premium will be too early, leading me to miss many reversals. Or perhaps it will be too late, needlessly increasing my losses. I'll adjust the rule based on my experience.
1. To move or run away quickly.
Etymology: 19th century US. Probably an alteration of British dialect scaddle (“to run off in a fright”), from the adjective scaddle (“wild, timid, skittish”), from Middle English scathel, skadylle (“harmful, fierce, wild”).
Synonyms: Flee, vamoose, Scat, take off, make tracks, get lost, high tail
Whether a trader decides to skedaddle, vamoose, or high tail it out of Dodge, the skill behind the words is part of the core of successful trading
Hang on to a position too long -- "It has got to get better, right?" -- and the losses continue to mount as hope flees until, at last, the dread day of reckoning comes, in my case usually when the options expire on a sad, useless losing position that ought to have disappeared long ago.
For winning trades, getting out is easy. I have set a somewhat arbitrary rule that when the profit has reached 50% of its maximum potential or greater, I take the profits and use them for other trades.
Exiting a losing trade is far more ambiguous. There are no objective criteria. The reason for entering the position is in the past and all I'm left with is the buzzing confusion of short-term trends and daily movements that tend to obscure more than they illuminate.
And there's that pesky creature called Hope, the innate human tendency to hang on in the unfounded expectation that things will improve.
I must confess, that I have never had a really good rule for telling me when it's time to skedaddle from a losing positions.
It's a problem. It needs mending. And so I shall do.
Beginning today I intend to exit any position where the loss is 1.5 times the premium I received or greater. For example, if the premium is 50 cents a share, then the the 1.5 times mark would be $1.25 (75 cents more than the 50 cent premium).
The calculation is to take the premium, multiply it by 1.5 and then add it to the premium in order to get the loss price for the options.
It may be that 1.5 times premium will be too early, leading me to miss many reversals. Or perhaps it will be too late, needlessly increasing my losses. I'll adjust the rule based on my experience.
-- Tim Bovee, Portland, Oregon, March 31, 2016
Next week's earnings plays
I'm looking at nine potential earnings plays for analysis next week, April 4-8. Here's the list:
| action | sym | earns date | am/mid/pm |
| 4/4/2016 | DRI | 4/5/2016 | am |
| 4/4/2016 | WBA | 4/5/2016 | am |
| 4/5/2016 | GPN | 4/6/2016 | am |
| 4/5/2016 | MON | 4/6/2016 | am |
| 4/5/2016 | STZ | 4/6/2016 | am |
| 4/6/2016 | BBBY | 4/6/2016 | pm |
| 4/6/2016 | CAG | 4/7/2016 | am |
| 4/6/2016 | KMX | 4/7/2016 | am |
| 4/8/2016 | DAL | 4/11/2016 | am |
... where "action" is the date I would analyze the trade and "earns date" is the date when the announcement is made. The "am/mid/pm" column is the time of day earnings are release: before the opening bell for am, after the closing bell for pm, and between the two bells for mid.
The symbols were selected based on two criteria: A price of $30 or greater, and average volume of 1 million shares a day or greater. When there are more prospects than I can reasonably handle I'll narrow the field by raising the average volume criterion, but for next week pickings are slim since we are between earnings seasons.
As the action date approaches I'll apply other tests that will determine whether or not I do a full analysis of the trade. I'll look at the quality of the grid -- sufficient open interest to provide liquidity and high implied volatility, for example.
The final screening considers properties of the trade that can change quickly, so I make my final decisions on action day and discuss the decisions in my morning Agenda post.
-- Tim Bovee, Portland, Oregon, March 31, 2016
Wednesday, March 30, 2016
Thursday's Prospects
On Wednesday, March 30:
Of 492 large-cap stocks and exchange-traded funds in my analytical universe, one broke beyond its 20-day price channel, to the upside. It failed initial screening.
There are no prospects for trades coinciding with earnings announcements.
Lacking prospects, I shall do no further analysis on Thursday, March 31.
Earnings season begins April 11. The higher pace of announcements will continue for about four weeks.
Methodology
The stocks in my analytical universe all have analyst coverage through the stock-ranking company Zacks Investment Research. Not all of the exchange-traded funds are so covered.
I screen the symbols for historical odds of a profitable signal in the direction of the breakout for the past 12 months.
For symbols whose odds of success are in the top or bottom thirds, suggesting a directional or non-directional trade, respectively, I next screen for 1) suitability of the options grid, including open interest of three figures or greater on the strike prices I would need to use to build a position, 2) implied volatility in the 60th percentile or greater of its 12-month range, and 3) the absence of an earnings announcement within the lifespan of the like options series I would trade.
Of 492 large-cap stocks and exchange-traded funds in my analytical universe, one broke beyond its 20-day price channel, to the upside. It failed initial screening.
There are no prospects for trades coinciding with earnings announcements.
Lacking prospects, I shall do no further analysis on Thursday, March 31.
Earnings season begins April 11. The higher pace of announcements will continue for about four weeks.
Methodology
The stocks in my analytical universe all have analyst coverage through the stock-ranking company Zacks Investment Research. Not all of the exchange-traded funds are so covered.
I screen the symbols for historical odds of a profitable signal in the direction of the breakout for the past 12 months.
For symbols whose odds of success are in the top or bottom thirds, suggesting a directional or non-directional trade, respectively, I next screen for 1) suitability of the options grid, including open interest of three figures or greater on the strike prices I would need to use to build a position, 2) implied volatility in the 60th percentile or greater of its 12-month range, and 3) the absence of an earnings announcement within the lifespan of the like options series I would trade.
-- Tim Bovee, Portland, Oregon, March 30, 2016
Tuesday, March 29, 2016
Wednesday's Prospects
On Tuesday, March 29:
Of 492 large-cap stocks and exchange-traded funds in my analytical universe, six broke beyond their 20-day price channels, all to the upside. None survived initial screening.
There are no prospects for trades coinciding with earnings announcements.
Lacking prospects, I shall do no further analysis on Wednesday, March 30.
Earnings season begins April 11. The higher pace of announcements will continue for about four weeks.
Methodology
The stocks in my analytical universe all have analyst coverage through the stock-ranking company Zacks Investment Research. Not all of the exchange-traded funds are so covered.
I screen the symbols for historical odds of a profitable signal in the direction of the breakout for the past 12 months.
For symbols whose odds of success are in the top or bottom thirds, suggesting a directional or non-directional trade, respectively, I next screen for 1) suitability of the options grid, including open interest of three figures or greater on the strike prices I would need to use to build a position, 2) implied volatility in the 60th percentile or greater of its 12-month range, and 3) the absence of an earnings announcement within the lifespan of the like options series I would trade.
Of 492 large-cap stocks and exchange-traded funds in my analytical universe, six broke beyond their 20-day price channels, all to the upside. None survived initial screening.
There are no prospects for trades coinciding with earnings announcements.
Lacking prospects, I shall do no further analysis on Wednesday, March 30.
Earnings season begins April 11. The higher pace of announcements will continue for about four weeks.
Methodology
The stocks in my analytical universe all have analyst coverage through the stock-ranking company Zacks Investment Research. Not all of the exchange-traded funds are so covered.
I screen the symbols for historical odds of a profitable signal in the direction of the breakout for the past 12 months.
For symbols whose odds of success are in the top or bottom thirds, suggesting a directional or non-directional trade, respectively, I next screen for 1) suitability of the options grid, including open interest of three figures or greater on the strike prices I would need to use to build a position, 2) implied volatility in the 60th percentile or greater of its 12-month range, and 3) the absence of an earnings announcement within the lifespan of the like options series I would trade.
-- Tim Bovee, Portland, Oregon, March 29, 2016
Tuesday's Outcomes
RH Analysis
Update 5/3/2016: RH moved to the top of its profitable range oafter earnings were published and stayed there ever since. I took advantage of a sudden dip deep into the range and exited at 64% of potential profit. My standard is 50% or better.
Shares rose by 4.9% over 35 days, or a 52% annual rate. The otpions position produced a 177.8% yield on debit for a +1,854% annual rate.
The home furnishings company Restoration Hardware Holdings Inc. (RH), headquartered in Corte Madera, California, publishes earnings on Tuesday after the closing bell.
RH
I shall use the MAY series of options, which trades for the last time 52 days hence, on May 15.
Ranges
Implied volatility stands at 74%, which is 4.8 times the VIX, a measure of volatility of the S&P 500 index. RH’s volatility stands at the peak of its most recent range. The price used for analysis was $38.68.
Ranges implied by options and earnings
Implied volatility 1 and 2 standard deviations; central tendency earns move
Shares rose by 4.9% over 35 days, or a 52% annual rate. The otpions position produced a 177.8% yield on debit for a +1,854% annual rate.
The home furnishings company Restoration Hardware Holdings Inc. (RH), headquartered in Corte Madera, California, publishes earnings on Tuesday after the closing bell.
[RH in Wikipedia]
RH
I shall use the MAY series of options, which trades for the last time 52 days hence, on May 15.
Ranges
Implied volatility stands at 74%, which is 4.8 times the VIX, a measure of volatility of the S&P 500 index. RH’s volatility stands at the peak of its most recent range. The price used for analysis was $38.68.
| Week | SD1 68.2% | SD2 95% | Earns |
|---|---|---|---|
| Upper | 49.43 | 60.18 | 52.11 |
| Lower | 27.93 | 17.18 | 25.25 |
| Gain/loss | ±$10.75 | ±$21.50 | ±$13.43 |
Tuesday's Agenda
I have four prospective trades in my pocket this morning. Two changeable characteristics that can be read only on the day of the trade will determine whether or not each is worth a full analysis.
The first characteristic is where implied volatility stands in relation to its most recent move from the most recent significant low to high, expressed as a percentile of the range. I trade symbols whose volatility is in the 60th percentile or greater.
LULU in the 29th percentile and CCL in the 57th percentile fails to make the grade. I won't proceed with further analysis of either.
The second characteristic is open interest -- the number of contracts that are out there as potential trades -- at strike prices in the areas I would need for a trade. By tradable areas I mean roughly those strikes with a 65% to 85% chance of expiring out of the money for maximum profit. I require open interest of 100 or more at those strikes.
CCL, LULU and PAYX all have insufficient open interest to meet my requirement.
That leaves RH as the one symbol that meets both requirements. I shall post a full analysis of RH this morning.
References
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
Alerts
Two social media feeds provide notification whenever something new is posted.
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.
The first characteristic is where implied volatility stands in relation to its most recent move from the most recent significant low to high, expressed as a percentile of the range. I trade symbols whose volatility is in the 60th percentile or greater.
LULU in the 29th percentile and CCL in the 57th percentile fails to make the grade. I won't proceed with further analysis of either.
The second characteristic is open interest -- the number of contracts that are out there as potential trades -- at strike prices in the areas I would need for a trade. By tradable areas I mean roughly those strikes with a 65% to 85% chance of expiring out of the money for maximum profit. I require open interest of 100 or more at those strikes.
CCL, LULU and PAYX all have insufficient open interest to meet my requirement.
That leaves RH as the one symbol that meets both requirements. I shall post a full analysis of RH this morning.
-- Tim Bovee, Portland, Oregon, March 29, 2016
References
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
Alerts
- On Twitter: Follow Tim Bovee: https://twitter.com/TimBovee
- On Facebook, Like Private Trader: https://www.facebook.com/PrivateTrader
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 decision 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.
Monday, March 28, 2016
Tuesday's Prospects
On Monday, March 28:
Of 492 large-cap stocks and exchange-traded funds in my analytical universe, none broke beyond their 20-day price channels.
There are four prospects for trades coinciding with earnings announcements.
I shall do further analysis on Tuesday, March 29.
Earnings season begins April 11. The higher pace of announcements will continue for about four weeks.
Potential trades keyed to events
The dates are those of the events, all of them earns announcements. Events prior to the opening bell are marked "am", during the trading day "mid", and after the closing bell "pm".
CCL and LULU each has implied volatility below my minimum requirement, the 60th percentile of its most recent range. PAYX and RH presently meet that requirement. I shall do further assessment of the four symbols after the open to decide which qualify for a full analysis.
Methodology
The stocks in my analytical universe all have analyst coverage through the stock-ranking company Zacks Investment Research. Not all of the exchange-traded funds are so covered.
I screen the symbols for historical odds of a profitable signal in the direction of the breakout for the past 12 months.
For symbols whose odds of success are in the top or bottom thirds, suggesting a directional or non-directional trade, respectively, I next screen for 1) suitability of the options grid, including open interest of three figures or greater on the strike prices I would need to use to build a position, 2) implied volatility in the 60th percentile or greater of its 12-month range, and 3) the absence of an earnings announcement within the lifespan of the like options series I would trade.
References
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
Alerts
Two social media feeds provide notification whenever something new is posted.
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.Tss s ss'ss
Of 492 large-cap stocks and exchange-traded funds in my analytical universe, none broke beyond their 20-day price channels.
There are four prospects for trades coinciding with earnings announcements.
I shall do further analysis on Tuesday, March 29.
Earnings season begins April 11. The higher pace of announcements will continue for about four weeks.
Potential trades keyed to events
The dates are those of the events, all of them earns announcements. Events prior to the opening bell are marked "am", during the trading day "mid", and after the closing bell "pm".
|
|
CCL and LULU each has implied volatility below my minimum requirement, the 60th percentile of its most recent range. PAYX and RH presently meet that requirement. I shall do further assessment of the four symbols after the open to decide which qualify for a full analysis.
Methodology
The stocks in my analytical universe all have analyst coverage through the stock-ranking company Zacks Investment Research. Not all of the exchange-traded funds are so covered.
I screen the symbols for historical odds of a profitable signal in the direction of the breakout for the past 12 months.
For symbols whose odds of success are in the top or bottom thirds, suggesting a directional or non-directional trade, respectively, I next screen for 1) suitability of the options grid, including open interest of three figures or greater on the strike prices I would need to use to build a position, 2) implied volatility in the 60th percentile or greater of its 12-month range, and 3) the absence of an earnings announcement within the lifespan of the like options series I would trade.
-- Tim Bovee, Portland, Oregon, March 28, 2016
References
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
Alerts
- On Twitter: Follow Tim Bovee: https://twitter.com/TimBovee
- On Facebook, Like Private Trader: https://www.facebook.com/PrivateTrader
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 decision 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.Tss s ss'ss
Monday's Outcomes
I exited an earnings play on CTRP for a profit.
I entered no new positions, having rejected MKC and QIHU without full analysis because of relatively low implied volatility. See remarks in Monday's Agenda.
References
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
Alerts
Two social media feeds provide notification whenever something new is posted.
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.
I entered no new positions, having rejected MKC and QIHU without full analysis because of relatively low implied volatility. See remarks in Monday's Agenda.
-- Tim Bovee, Portland, Oregon, March 28, 2016
References
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
Alerts
- On Twitter: Follow Tim Bovee: https://twitter.com/TimBovee
- On Facebook, Like Private Trader: https://www.facebook.com/PrivateTrader
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 decision 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.
Monday's Agenda
This post was originally, and erroneously, headlined Monday's Prospects.
I have one -- possibly two -- prospects on my desk this morning: MKC and QIHU. Both have implied volatility around the 30th percentile of their most recent ranges. For trading, I require that volatility be at the 60th percentile or higher.
So I plan no further analysis today and don't anticipate entering any new positions today.
There are some anomalies regarding when QIHU will publish earnings. Some sources say today after the closing bell, others say Tuesday at an unspecified time of day. In any case, implied volatility is unlikely to rise to an acceptable level, so the date makes no difference for my practical trading.
References
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
Alerts
Two social media feeds provide notification whenever something new is posted.
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.
I have one -- possibly two -- prospects on my desk this morning: MKC and QIHU. Both have implied volatility around the 30th percentile of their most recent ranges. For trading, I require that volatility be at the 60th percentile or higher.
So I plan no further analysis today and don't anticipate entering any new positions today.
There are some anomalies regarding when QIHU will publish earnings. Some sources say today after the closing bell, others say Tuesday at an unspecified time of day. In any case, implied volatility is unlikely to rise to an acceptable level, so the date makes no difference for my practical trading.
-- Tim Bovee, Portland, Oregon, March 28, 2016
References
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
Alerts
- On Twitter: Follow Tim Bovee: https://twitter.com/TimBovee
- On Facebook, Like Private Trader: https://www.facebook.com/PrivateTrader
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 decision 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.
Sunday, March 27, 2016
The Week Ahead: Jobs, trade, income, outlays, manufacturing, Yellen
Jobs again take the center of the economic stage with the employment situation report, out Friday at 8:30 a.m. New York time. A private-sector sneak preview, the ADP employment report issued by a leading payroll company, will be out Wednesday at 8:15 a.m.
Other potential market movers: International trade and personal income and outlays, each at 8:30 a.m. on Monday, and the Institute of Supply Management manufacturing index published Friday at 10 a.m.
Fed Chair Janet Yellen addresses the Economic Club of New York on Tuesday at 12:20 p.m. Her subject: Economic Outlook and Monetary Policy.
Factory orders, which normally are published the same week as the employment report, will be released on Monday, April 4.
Leading indicators (in descending order of importance):
The interest rate spread between 10-year Treasuries and the federal funds rate, reported continually during market hours.
The M2 money supply, at 4:30 p.m. Thursday.
The average hourly workweek in manufacturing from the employment report at 8:30 a.m. Friday.
Vendor performance, also called the deliveries times index, from the ISM manufacturing survey at 10 a.m. Friday.
The S&P 500 index, reported continually during market hours.
Average weekly initial claims for unemployment from the jobless claims report at 8:30 a.m. Thursday.
The index of consumer expectations from the University of Michigan consumer sentiment report at 10 a.m. Friday.
Events arranged by day:
Monday: International trade and personal income and outlays, each at 10 a.m., pending home sales at 10 a.m. and the Dallas Federal Reserve Bank's manufacturing survey of conditions in Texas at 10:30 a.m.
Tuesday: The S&P Case-Shiller home price index of real-estate prices in 20 metropolitan areas at 9 a.m. and consumer confidence at 10 a.m.
Wednesday: The ADP employment report at 8:15 a.m. and petroleum inventories at 10:30 a.m.,
Thursday: Jobless claims at 8:30 a.m., the Chicago purchasing managers index at 9:45 a.m. and the M2 money supply at 4:30 p.m.
Friday: Motor vehicle sales throughout the day, employment at 8:30 a.m., the Purchasing Managers Institute manufacturing index at 9:45 a.m., and the ISM manufacturing index, consumer sentiment and construction spending, all at 10 a.m.
I also keep an eye on the Baltic Dry Index, updated daily, and the 5-year implied inflation rate based on U.S. Treasury yields, which presently stands at 1.54%, down 0.05% from a week earlier.
Treasury Debt
Bills
In addition to Yellen, speaking on Tuesday, two other members of the Federal Open Market Committee take to the podium: New York Fed Pres. William Dudley on Thursday and Cleveland Fed Pres. Loretta Mester on Friday.
Two FOMC alternates have scheduled appearances: Dallas Fed Pres. Rob Kaplan twice on Tuesday and Chicago Fed Pres. Charles Evans on Wednesday and Thursday
And one other from among the Fed glitterati, San Francisco Fed Pres. John Williams, speaks on Tuesday. He has no role this year on the FOMC.
Analytical universe
This week I shall be analyzing new trading signals from among 492 large-cap stocks and exchange-traded funds.
Good trading!
References
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
Alerts
Disclaimer
All content on Tim Bovee, Private Trader by Tim Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Based on a work at www.timbovee.com
Other potential market movers: International trade and personal income and outlays, each at 8:30 a.m. on Monday, and the Institute of Supply Management manufacturing index published Friday at 10 a.m.
Fed Chair Janet Yellen addresses the Economic Club of New York on Tuesday at 12:20 p.m. Her subject: Economic Outlook and Monetary Policy.
Factory orders, which normally are published the same week as the employment report, will be released on Monday, April 4.
Leading indicators (in descending order of importance):
The interest rate spread between 10-year Treasuries and the federal funds rate, reported continually during market hours.
The M2 money supply, at 4:30 p.m. Thursday.
The average hourly workweek in manufacturing from the employment report at 8:30 a.m. Friday.
Vendor performance, also called the deliveries times index, from the ISM manufacturing survey at 10 a.m. Friday.
The S&P 500 index, reported continually during market hours.
Average weekly initial claims for unemployment from the jobless claims report at 8:30 a.m. Thursday.
The index of consumer expectations from the University of Michigan consumer sentiment report at 10 a.m. Friday.
Events arranged by day:
Monday: International trade and personal income and outlays, each at 10 a.m., pending home sales at 10 a.m. and the Dallas Federal Reserve Bank's manufacturing survey of conditions in Texas at 10:30 a.m.
Tuesday: The S&P Case-Shiller home price index of real-estate prices in 20 metropolitan areas at 9 a.m. and consumer confidence at 10 a.m.
Wednesday: The ADP employment report at 8:15 a.m. and petroleum inventories at 10:30 a.m.,
Thursday: Jobless claims at 8:30 a.m., the Chicago purchasing managers index at 9:45 a.m. and the M2 money supply at 4:30 p.m.
Friday: Motor vehicle sales throughout the day, employment at 8:30 a.m., the Purchasing Managers Institute manufacturing index at 9:45 a.m., and the ISM manufacturing index, consumer sentiment and construction spending, all at 10 a.m.
I also keep an eye on the Baltic Dry Index, updated daily, and the 5-year implied inflation rate based on U.S. Treasury yields, which presently stands at 1.54%, down 0.05% from a week earlier.
Treasury Debt
Bills
- 4-week: Announcement Monday 11 a.m., auction Tuesday 11:30 a.m., settlement Thursday.
- 3-month: Auction Monday 11:30 a.m., announcement Thursday 11 a.m., settlement Thursday.
- 6-month: Auction Monday 11:30 a.m., announcement Thursday 11 a.m., settlement Thursday.
- 52-week: Auction Tuesday 11:30 a.m., settlement Thursday.
- 2-year: Auction Monday 1 p.m., settlement Thursday.
- 5-year: Auction Tuesday 1 p.m., settlement Thursday.
- 7-year Wednesday 1 p.m., settlement Thursday.
- None.
- 10-year: Settlement Thursday.
In addition to Yellen, speaking on Tuesday, two other members of the Federal Open Market Committee take to the podium: New York Fed Pres. William Dudley on Thursday and Cleveland Fed Pres. Loretta Mester on Friday.
Two FOMC alternates have scheduled appearances: Dallas Fed Pres. Rob Kaplan twice on Tuesday and Chicago Fed Pres. Charles Evans on Wednesday and Thursday
And one other from among the Fed glitterati, San Francisco Fed Pres. John Williams, speaks on Tuesday. He has no role this year on the FOMC.
Analytical universe
This week I shall be analyzing new trading signals from among 492 large-cap stocks and exchange-traded funds.
Good trading!
-- Tim Bovee, Portland, Oregon, March 27, 2016
References
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
Two social media feeds provide notification whenever something new is posted.
- On Twitter, Follow Tim Bovee: https://twitter.com/TimBovee
- On Facebook, Like Private Trader: https://www.facebook.com/PrivateTrader
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 Tim Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Based on a work at www.timbovee.com
Friday, March 25, 2016
Monday's Prospects
Note: U.S. markets were closed on Friday, March 25.
On Thursday, March 24:
Of 492 large-cap stocks and exchange-traded funds in my analytical universe, seven broke beyond their 20-day price channels, all to the downside. None survived initial screening.
There are two prospects for trades coinciding with earnings announcements.
I shall do further analysis on Monday, March 28.
Earnings season begins April 11. The higher pace of announcements will continue for about four weeks.
Potential trades keyed to events
The dates are those of the events, all of them earns announcements. Events prior to the opening bell are marked "am", during the trading day "mid", and after the closing bell "pm".
Both symbols have insufficient open interest on their options grids to support a position. I'll trade if their grids improve on Monday. Also, QIHU has low implied volatility in the 35th percentile of its most recent range. Unless volatility rises to meet my 60th percentile or greater guidelines, QIHU won't get further analysis.
Methodology
The stocks in my analytical universe all have analyst coverage through the stock-ranking company Zacks Investment Research. Not all of the exchange-traded funds are so covered.
I screen the symbols for historical odds of a profitable signal in the direction of the breakout for the past 12 months.
For symbols whose odds of success are in the top or bottom thirds, suggesting a directional or non-directional trade, respectively, I next screen for 1) suitability of the options grid, including open interest of three figures or greater on the strike prices I would need to use to build a position, 2) implied volatility in the 60th percentile or greater of its 12-month range, and 3) the absence of an earnings announcement within the lifespan of the like options series I would trade.
References
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
Alerts
Two social media feeds provide notification whenever something new is posted.
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.Tss s ss'ss
On Thursday, March 24:
Of 492 large-cap stocks and exchange-traded funds in my analytical universe, seven broke beyond their 20-day price channels, all to the downside. None survived initial screening.
There are two prospects for trades coinciding with earnings announcements.
I shall do further analysis on Monday, March 28.
Earnings season begins April 11. The higher pace of announcements will continue for about four weeks.
Potential trades keyed to events
The dates are those of the events, all of them earns announcements. Events prior to the opening bell are marked "am", during the trading day "mid", and after the closing bell "pm".
|
|
Both symbols have insufficient open interest on their options grids to support a position. I'll trade if their grids improve on Monday. Also, QIHU has low implied volatility in the 35th percentile of its most recent range. Unless volatility rises to meet my 60th percentile or greater guidelines, QIHU won't get further analysis.
Methodology
The stocks in my analytical universe all have analyst coverage through the stock-ranking company Zacks Investment Research. Not all of the exchange-traded funds are so covered.
I screen the symbols for historical odds of a profitable signal in the direction of the breakout for the past 12 months.
For symbols whose odds of success are in the top or bottom thirds, suggesting a directional or non-directional trade, respectively, I next screen for 1) suitability of the options grid, including open interest of three figures or greater on the strike prices I would need to use to build a position, 2) implied volatility in the 60th percentile or greater of its 12-month range, and 3) the absence of an earnings announcement within the lifespan of the like options series I would trade.
-- Tim Bovee, Portland, Oregon, March 25, 2016
References
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
Alerts
- On Twitter: Follow Tim Bovee: https://twitter.com/TimBovee
- On Facebook, Like Private Trader: https://www.facebook.com/PrivateTrader
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 decision 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.Tss s ss'ss
Thursday, March 24, 2016
Thursday's Outcomes
The U.S. markets will be closed on Friday. The government will be open and will release financial reports.
I had no prospects on the desk today -- pre-holiday dolrums? -- and placed no trades.
References
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
Alerts
Two social media feeds provide notification whenever something new is posted.
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.
I had no prospects on the desk today -- pre-holiday dolrums? -- and placed no trades.
-- Tim Bovee, Portland, Oregon, March 24, 2016
References
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
Alerts
- On Twitter: Follow Tim Bovee: https://twitter.com/TimBovee
- On Facebook, Like Private Trader: https://www.facebook.com/PrivateTrader
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 decision 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.
Wednesday, March 23, 2016
Thursday's Prospects
On Wednesday, March 23:
Of 497 large-cap stocks and exchange-traded funds in my analytical universe, none broke beyond their 20-day price channels.
There are no prospects for trades coinciding with earnings announcements.
Lacking prospects, I shall do no further analysis on Thursday, March 24.
Earnings season begins April 11. The higher pace of announcements will continue for about four weeks.
Methodology
The stocks in my analytical universe all have analyst coverage through the stock-ranking company Zacks Investment Research. Not all of the exchange-traded funds are so covered.
I screen the symbols for historical odds of a profitable signal in the direction of the breakout for the past 12 months.
For symbols whose odds of success are in the top or bottom thirds, suggesting a directional or non-directional trade, respectively, I next screen for 1) suitability of the options grid, including open interest of three figures or greater on the strike prices I would need to use to build a position, 2) implied volatility in the 60th percentile or greater of its 12-month range, and 3) the absence of an earnings announcement within the lifespan of the like options series I would trade.
References
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
Alerts
Two social media feeds provide notification whenever something new is posted.
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.Tss s ss'ss
Of 497 large-cap stocks and exchange-traded funds in my analytical universe, none broke beyond their 20-day price channels.
There are no prospects for trades coinciding with earnings announcements.
Lacking prospects, I shall do no further analysis on Thursday, March 24.
Earnings season begins April 11. The higher pace of announcements will continue for about four weeks.
Methodology
The stocks in my analytical universe all have analyst coverage through the stock-ranking company Zacks Investment Research. Not all of the exchange-traded funds are so covered.
I screen the symbols for historical odds of a profitable signal in the direction of the breakout for the past 12 months.
For symbols whose odds of success are in the top or bottom thirds, suggesting a directional or non-directional trade, respectively, I next screen for 1) suitability of the options grid, including open interest of three figures or greater on the strike prices I would need to use to build a position, 2) implied volatility in the 60th percentile or greater of its 12-month range, and 3) the absence of an earnings announcement within the lifespan of the like options series I would trade.
-- Tim Bovee, Portland, Oregon, March 23, 2016
References
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
Alerts
- On Twitter: Follow Tim Bovee: https://twitter.com/TimBovee
- On Facebook, Like Private Trader: https://www.facebook.com/PrivateTrader
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 decision 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.Tss s ss'ss
Wednesday's Outcomes
Without prospects, I executed no trades today.
References
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
Alerts
Two social media feeds provide notification whenever something new is posted.
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.
-- Tim Bovee, Portland, Oregon, March 22, 2016
References
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
Alerts
- On Twitter: Follow Tim Bovee: https://twitter.com/TimBovee
- On Facebook, Like Private Trader: https://www.facebook.com/PrivateTrader
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 decision 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.
Tuesday, March 22, 2016
Wednesday's Prospects
On Tuesday, March 22:
Of 497 large-cap stocks and exchange-traded funds in my analytical universe, three broke beyond their 20-day price channels, all to the upside. None survived initial screening.
There are no prospects for trades coinciding with earnings announcements.
With no prospects, I shall do no further analysis on Wednesday, March 23.
Earnings season begins April 11. The higher pace of announcements will continue for about four weeks.
Methodology
The stocks in my analytical universe all have analyst coverage through the stock-ranking company Zacks Investment Research. Not all of the exchange-traded funds are so covered.
I screen the symbols for historical odds of a profitable signal in the direction of the breakout for the past 12 months.
For symbols whose odds of success are in the top or bottom thirds, suggesting a directional or non-directional trade, respectively, I next screen for 1) suitability of the options grid, including open interest of three figures or greater on the strike prices I would need to use to build a position, 2) implied volatility in the 60th percentile or greater of its 12-month range, and 3) the absence of an earnings announcement within the lifespan of the like options series I would trade.
References
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
Alerts
Two social media feeds provide notification whenever something new is posted.
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.Tss s ss'ss
Of 497 large-cap stocks and exchange-traded funds in my analytical universe, three broke beyond their 20-day price channels, all to the upside. None survived initial screening.
There are no prospects for trades coinciding with earnings announcements.
With no prospects, I shall do no further analysis on Wednesday, March 23.
Earnings season begins April 11. The higher pace of announcements will continue for about four weeks.
Methodology
The stocks in my analytical universe all have analyst coverage through the stock-ranking company Zacks Investment Research. Not all of the exchange-traded funds are so covered.
I screen the symbols for historical odds of a profitable signal in the direction of the breakout for the past 12 months.
For symbols whose odds of success are in the top or bottom thirds, suggesting a directional or non-directional trade, respectively, I next screen for 1) suitability of the options grid, including open interest of three figures or greater on the strike prices I would need to use to build a position, 2) implied volatility in the 60th percentile or greater of its 12-month range, and 3) the absence of an earnings announcement within the lifespan of the like options series I would trade.
-- Tim Bovee, Portland, Oregon, March 22, 2016
References
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
Alerts
- On Twitter: Follow Tim Bovee: https://twitter.com/TimBovee
- On Facebook, Like Private Trader: https://www.facebook.com/PrivateTrader
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 decision 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.Tss s ss'ss
Tuesday's Outcomes
I rejected two potential earnings plays, NKE and GIS, without full analysis because of low implied volatility. I entered and exited no positions.
References
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
Alerts
Two social media feeds provide notification whenever something new is posted.
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.
-- Tim Bovee, Portland, Oregon, March 22, 2016
References
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
Alerts
- On Twitter: Follow Tim Bovee: https://twitter.com/TimBovee
- On Facebook, Like Private Trader: https://www.facebook.com/PrivateTrader
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 decision 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.
Tuesday's Agenda
I have two earnings announcements on my desk as prospects this morning.
Neither meets my guidelines for full analysis and possibly trades because of low implied volatility. NKE has volatility in the 47th percentile of its most recent rise, and GIS, in the 18th percentile. My guidelines require implied volatility in the 60th percentile or better.
Past behavior has been for implied behavior to rise as earnings or some other significant event approaches. That has ceased to happen, for the present at least.
When volatility is low, it makes little sense to pursue a strategy of selling volatility, the strategy that lies at the heart of my trading. Pursuing that course would amount to a Buy High Sell Low strategy, a perfect description of how to lose money.
My plan, for now, is to wait and see what happens rather than tying up funds in riskier strategies.
References
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
Alerts
Two social media feeds provide notification whenever something new is posted.
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.
Neither meets my guidelines for full analysis and possibly trades because of low implied volatility. NKE has volatility in the 47th percentile of its most recent rise, and GIS, in the 18th percentile. My guidelines require implied volatility in the 60th percentile or better.
Past behavior has been for implied behavior to rise as earnings or some other significant event approaches. That has ceased to happen, for the present at least.
When volatility is low, it makes little sense to pursue a strategy of selling volatility, the strategy that lies at the heart of my trading. Pursuing that course would amount to a Buy High Sell Low strategy, a perfect description of how to lose money.
My plan, for now, is to wait and see what happens rather than tying up funds in riskier strategies.
-- Tim Bovee, Portland, Oregon, March 22, 2016
References
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
Alerts
- On Twitter: Follow Tim Bovee: https://twitter.com/TimBovee
- On Facebook, Like Private Trader: https://www.facebook.com/PrivateTrader
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 decision 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.
Monday, March 21, 2016
Tuesday's Prospects
On Monday, March 21:
Of 497 large-cap stocks and exchange-traded funds in my analytical universe, three broke beyond their 20-day price channels, all to the upside. None survived initial screening.
There are two prospects for trades coinciding with earnings announcements.
I shall do further analysis on Tuesday, March 22.
Earnings season begins April 11. The higher pace of announcements will continue for about four weeks.
Potential trades keyed to events
The dates are those of the events, all of them earns announcements. Events prior to the opening bell are marked "am", during the trading day "mid", and after the closing bell "pm".
Both NKE and GIS have implied volatility below the minimum allowed by my guidelines: The 60th percentile or greater of the most recent volatility range. I shall report my final decision whether to do a full analysis in my Agenda post Tuesday morning.
Methodology
The stocks in my analytical universe all have analyst coverage through the stock-ranking company Zacks Investment Research. Not all of the exchange-traded funds are so covered.
I screen the symbols for historical odds of a profitable signal in the direction of the breakout for the past 12 months.
For symbols whose odds of success are in the top or bottom thirds, suggesting a directional or non-directional trade, respectively, I next screen for 1) suitability of the options grid, including open interest of three figures or greater on the strike prices I would need to use to build a position, 2) implied volatility in the 60th percentile or greater of its 12-month range, and 3) the absence of an earnings announcement within the lifespan of the like options series I would trade.
References
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
Alerts
Two social media feeds provide notification whenever something new is posted.
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.Tss s ss'ss
Of 497 large-cap stocks and exchange-traded funds in my analytical universe, three broke beyond their 20-day price channels, all to the upside. None survived initial screening.
There are two prospects for trades coinciding with earnings announcements.
I shall do further analysis on Tuesday, March 22.
Earnings season begins April 11. The higher pace of announcements will continue for about four weeks.
Potential trades keyed to events
The dates are those of the events, all of them earns announcements. Events prior to the opening bell are marked "am", during the trading day "mid", and after the closing bell "pm".
|
|
Both NKE and GIS have implied volatility below the minimum allowed by my guidelines: The 60th percentile or greater of the most recent volatility range. I shall report my final decision whether to do a full analysis in my Agenda post Tuesday morning.
Methodology
The stocks in my analytical universe all have analyst coverage through the stock-ranking company Zacks Investment Research. Not all of the exchange-traded funds are so covered.
I screen the symbols for historical odds of a profitable signal in the direction of the breakout for the past 12 months.
For symbols whose odds of success are in the top or bottom thirds, suggesting a directional or non-directional trade, respectively, I next screen for 1) suitability of the options grid, including open interest of three figures or greater on the strike prices I would need to use to build a position, 2) implied volatility in the 60th percentile or greater of its 12-month range, and 3) the absence of an earnings announcement within the lifespan of the like options series I would trade.
-- Tim Bovee, Portland, Oregon, March 21, 2016
References
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
Alerts
- On Twitter: Follow Tim Bovee: https://twitter.com/TimBovee
- On Facebook, Like Private Trader: https://www.facebook.com/PrivateTrader
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 decision 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.Tss s ss'ss
Monday's Outcomes
I had no prospects on my desk today and made no trades. Implied volatility remains low, even on AAPL before today's product event -- a change from past behavior.
References
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
Alerts
Two social media feeds provide notification whenever something new is posted.
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.
-- Tim Bovee, Portland, Oregon, March 21, 2016
References
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
Alerts
- On Twitter: Follow Tim Bovee: https://twitter.com/TimBovee
- On Facebook, Like Private Trader: https://www.facebook.com/PrivateTrader
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 decision 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.
Sunday, March 20, 2016
The Week Ahead: GDP, durables, homes and a holiday
The third and final estimate of 4th quarter gross domestic product will be published on Friday at 8:30 a.m. New York time. The release comes in the week after the Federal Open Market Committee slowed its plan to raise interest rates, citing economic troubles abroad.
The GDP will be published on a day when the markets are closed, one of those strange and old-fashioned disconnects between the needs of finance and the persistence of custom. Friday is Wall Street's Easter holiday, the Friday before the Christian religious observance. Banks are open; markets are closed.
Durable goods orders, a measure of confidence, will be out on Thursday at 8:30 a.m., and new real estate reports are on the calendar: Existing home sales on Monday at 10 a.m. and new home sales on Wednesday at 10 a.m.
Leading indicators (in descending order of importance):
The interest rate spread between 10-year Treasuries and the federal funds rate, reported continually during market hours.
The M2 money supply, at 4:30 p.m. Thursday.
The S&P 500 index, reported continually during market hours.
Average weekly initial claims for unemployment from the jobless claims report at 8:30 a.m. Thursday.
Events arranged by day:
Monday: Existing home sales at 10 a.m.
Tuesday: PMI manufacturing index flash report at 9:45 a.m.
Wednesday: New homes sales at 10 a.m. and petroleum inventories at 10:30 a.m.,
Thursday: Durable goods orders and jobless claims, each at 8:30 a.m. and the M2 money supply at 4:30 p.m.
Friday: Gross domestic product 4th quarter 3rd estimate at 8:30 a.m. Markets are closed all day.
I also keep an eye on the Baltic Dry Index, updated daily, and the 5-year implied inflation rate based on U.S. Treasury yields, which presently stands at 1.59%, up 0.08% from a week earlier.
Treasury Debt
Bills
One Federal Open Market Committee member has scheduled appearances during the week, St. Louis Fed Pres. James Bullard on Monday and Thursday
Two alternates will speak, Chicago Fed. Pres. Charles Evans and Philadelphia Fed Pres. Patrick Harker on Tuesday,
And two of the Fed glitterati who has no position on the FOMC this year will take to the podium: Richmond Fed Pres. Jeffrey Lacker and Atlanta Fed Pres. Dennis Lockhart, both on Monday.
Analytical universe
This week I shall be analyzing new trading signals from among 497 large-cap stocks and exchange-traded funds.
Good trading!
References
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
Alerts
Disclaimer
All content on Tim Bovee, Private Trader by Tim Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Based on a work at www.timbovee.com
The GDP will be published on a day when the markets are closed, one of those strange and old-fashioned disconnects between the needs of finance and the persistence of custom. Friday is Wall Street's Easter holiday, the Friday before the Christian religious observance. Banks are open; markets are closed.
Durable goods orders, a measure of confidence, will be out on Thursday at 8:30 a.m., and new real estate reports are on the calendar: Existing home sales on Monday at 10 a.m. and new home sales on Wednesday at 10 a.m.
Leading indicators (in descending order of importance):
The interest rate spread between 10-year Treasuries and the federal funds rate, reported continually during market hours.
The M2 money supply, at 4:30 p.m. Thursday.
The S&P 500 index, reported continually during market hours.
Average weekly initial claims for unemployment from the jobless claims report at 8:30 a.m. Thursday.
Events arranged by day:
Monday: Existing home sales at 10 a.m.
Tuesday: PMI manufacturing index flash report at 9:45 a.m.
Wednesday: New homes sales at 10 a.m. and petroleum inventories at 10:30 a.m.,
Thursday: Durable goods orders and jobless claims, each at 8:30 a.m. and the M2 money supply at 4:30 p.m.
Friday: Gross domestic product 4th quarter 3rd estimate at 8:30 a.m. Markets are closed all day.
I also keep an eye on the Baltic Dry Index, updated daily, and the 5-year implied inflation rate based on U.S. Treasury yields, which presently stands at 1.59%, up 0.08% from a week earlier.
Treasury Debt
Bills
- 4-week: Announcement Monday 11 a.m., auction Tuesday 11:30 a.m., settlement Thursday.
- 3-month: Auction Monday 11:30 a.m., announcement Thursday 11 a.m., settlement Thursday.
- 6-month: Auction Monday 11:30 a.m., announcement Thursday 11 a.m., settlement Thursday.
- 52-week: Announcement Thursday 11 a.m.
- 2-year: Announcement Thursday 11 a.m.
- 2-year floating rate: Auction Wednesday 11:30 a.m.
- 5-year: Announcement Thursday 11 a.m.
- 7-year: Announcement Thursday 11 a.m.
- None.
- None.
One Federal Open Market Committee member has scheduled appearances during the week, St. Louis Fed Pres. James Bullard on Monday and Thursday
Two alternates will speak, Chicago Fed. Pres. Charles Evans and Philadelphia Fed Pres. Patrick Harker on Tuesday,
And two of the Fed glitterati who has no position on the FOMC this year will take to the podium: Richmond Fed Pres. Jeffrey Lacker and Atlanta Fed Pres. Dennis Lockhart, both on Monday.
Analytical universe
This week I shall be analyzing new trading signals from among 497 large-cap stocks and exchange-traded funds.
Good trading!
-- Tim Bovee, Portland, Oregon, March 20, 2016
References
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
Two social media feeds provide notification whenever something new is posted.
- On Twitter, Follow Tim Bovee: https://twitter.com/TimBovee
- On Facebook, Like Private Trader: https://www.facebook.com/PrivateTrader
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 Tim Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Based on a work at www.timbovee.com
Saturday, March 19, 2016
Monday's Prospects
On Friday, March 18:
Of 497 large-cap stocks and exchange-traded funds in my analytical universe, six broke beyond their 20-day price channels, all to the upside. None survived initial screening.
There are no prospects for trades coinciding with earnings announcements.
Lacking prospects, I shall do further no analysis on Monday, March 21.
Earnings season begins April 11. The higher pace of announcements will continue for about four weeks.
Methodology
The stocks in my analytical universe all have analyst coverage through the stock-ranking company Zacks Investment Research. Not all of the exchange-traded funds are so covered.
I screen the symbols for historical odds of a profitable signal in the direction of the breakout for the past 12 months.
For symbols whose odds of success are in the top or bottom thirds, suggesting a directional or non-directional trade, respectively, I next screen for 1) suitability of the options grid, including open interest of three figures or greater on the strike prices I would need to use to build a position, 2) implied volatility in the 60th percentile or greater of its 12-month range, and 3) the absence of an earnings announcement within the lifespan of the like options series I would trade.
References
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
Alerts
Two social media feeds provide notification whenever something new is posted.
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.Tss s ss'ss
Of 497 large-cap stocks and exchange-traded funds in my analytical universe, six broke beyond their 20-day price channels, all to the upside. None survived initial screening.
There are no prospects for trades coinciding with earnings announcements.
Lacking prospects, I shall do further no analysis on Monday, March 21.
Earnings season begins April 11. The higher pace of announcements will continue for about four weeks.
Methodology
The stocks in my analytical universe all have analyst coverage through the stock-ranking company Zacks Investment Research. Not all of the exchange-traded funds are so covered.
I screen the symbols for historical odds of a profitable signal in the direction of the breakout for the past 12 months.
For symbols whose odds of success are in the top or bottom thirds, suggesting a directional or non-directional trade, respectively, I next screen for 1) suitability of the options grid, including open interest of three figures or greater on the strike prices I would need to use to build a position, 2) implied volatility in the 60th percentile or greater of its 12-month range, and 3) the absence of an earnings announcement within the lifespan of the like options series I would trade.
-- Tim Bovee, Portland, Oregon, March 19, 2016
References
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
Alerts
- On Twitter: Follow Tim Bovee: https://twitter.com/TimBovee
- On Facebook, Like Private Trader: https://www.facebook.com/PrivateTrader
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 decision 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.Tss s ss'ss
Saturday's Outcomes
Four positions expired today: DOW, KO, PG and TSLA, all for losses I've updated their analyses with results.
References
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
Alerts
Two social media feeds provide notification whenever something new is posted.
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.
-- Tim Bovee, Portland, Oregon, March 19, 2016
References
Tradecraft: Playing the odds to build winning stock market trades from options, a description of how I trade, can be read here.
Alerts
- On Twitter: Follow Tim Bovee: https://twitter.com/TimBovee
- On Facebook, Like Private Trader: https://www.facebook.com/PrivateTrader
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 decision 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.
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