1/8 Watchlist: Volatility's Decline; DTV, PEP, SMH, SPLS, UNG on the scan

Volatility (VIX) among blue chips has declined by 4.6% from the open today. Since the decline began on Jan. 4, the first trading day of the year, the index has declined by 15.2%. Fear, where is thy sting?

The VIX, also called the "fear index", measures volatility of the S&P 500 stocks. When the VIX is down, the theory goes, traders are less fearful of losing their money. Risk premiums shrink.

What that means for us is that it gets hard to make money in some respects. Option premiums are lower. Bid-ask spreads are narrower. I find fewer directional trades.

Risk is the trader's friend. Without risk there is no profit. Risk is the mother of success.

So, with less volatility, indicators across  the board are fairly quiet. No new signals. No big moves.

12/17 Watchlist

A new bull signal on Treasury long bonds (TLT), and a bear signal on gold (GLD). Otherwise, nothing to add to this morning's discussion of the indicators.

No new signals on the currency pairs (EUR/USD and USD/JPY)

Among holdings:

Three January bull positons -- AET, HPQ, VALE -- have pulled back from peaks. I'm thinking of closing the positions.

LVS, a January covered call, is showing a bear signal, and prices remain in a sideways range.

KO, a January iron condor, has moved back in to max profit territory.

UNG, my December covered call, is trading well above 10. The call is a 9 strike, so the position will be exercised by whoever bought the call.

High-volume stocks and etfs priced $20 and above:

• QQQQ, bear signal, uptrend
  
• EEM, bear with a downward gap, uptrend
  
• JPM, bear, downtrend, but already at resistance
  
• MSFT, bear, uptrend
  
• MJN, bear,sideways trend, on the fourth day following a bull signal; confused puppy mode
• FCX, bear, amid a sharp pullback following an uptrend, the day following a bull signal; drunken sailor mode
• PG, bear, uptrend, on the fourth day following a bull signal (no more metaphors)
  
• FDX, bear, uptrend, on a gap down following earnings
• VWO, bear on a gap down, uptrend
  
• MOS, bear, sideways with some deep fluctuations
  
• DTV, bear, uptrend
  
• IVV, bear, uptrend
  
• XLI, bear, uptrend
  
• XLV, bear, uptrend
  
• VOD, bear, uptrend
  
• AXP, bear, uptrend
  
• GPS, bear (but no gap), trend change (maybe) from up to down
  
• DIA, bear, uptrend
  
• COF, bear, sideways following a strong uptrend
  

So, all in all, a fairly broad switch into bear mode. A lot of the stocks, not just those noted above, showed whipsaws from bull to bear the last few days. With the holiday trading week coming up, closing questionable positions is the prudent course.

JPM is the only trend following trade  in the batch, and since it is already at resistance, I don't find it to be compelling.

No covered call scan today.

11/30 Watchlist

KO shows a pps/mfi confirmed bear signal at 57.06, with resistance at 54 (if it breaks down below the present level) and support at 58.50.

These issues show mfi breakouts that could be set ups for confirmation of a pps signal, if one occurs:

• Bear: MRK WMT QCOM JNJ DTV
• Bull: TGT

The only potential trade is a bear position on KO. Decision after 3:30 p.m. EST (12:30 p.m. PST).

Holdings: No action warranted on GLD, which is little changed from this morning. UNG has declined and remains profitable.

Indicators: Indicators unchanged.