I checked the QQQ Oct options which almost always have a tight spread; the market isn't open now but it does appear puts are inflated. I'll check again after the open. If this were true; I have no explanation...
I know a lot about options and you're right.... however I have to ask -- how do you know the markets are going to test the August 24th lows within weeks? Options on volatility ETF's could be a great route to go... Options on the VIX itself might be good too however they can be tricky... Please contact me, I'd really appreciate it.
Maybe I'm wrong (see below), but it seems if the rate hike does not occur the markets should rally since; 'it's already priced in'. I'm anxious to load up here favoring a strong move in one direction or the other (downside bias) but I'm not confident. The only thing of which I am certain is the current price formation in relation to the recent decline; bearish. Feel free to chime in...
"It has made the world a safer place for the Fed to do whatever they have to do in the next few weeks," said John Manley, chief equity strategist at Wells Fargo Funds Management in New York. Traders have already priced in the increase, and whether it comes in September, October or December "isn't going to make an enormous difference," he said.
The US equity markets are at an important juncture. The current technical formation of the DJX (and general US markets) appears to be a bearish consolidation pattern stemming from the fast and severe decline of August 19, 20, 21, & 24 of 2015. Current (DJX) resistance is ~ 16650 with support consisting of consecutively higher lows when connected create a diagonal upward sloping line. The intraday close of 15871.35 from August 24th 2015 and the October 15th 2014 intraday low/reversal point of 15855.12 may prove a significant price level in the near term. The FOMC meeting next week will likely be a catalyst that can dramatically affect the US markets. In short; if interest rates are increased the markets would likely resolve downward continuing its decline but if interest rates are left unchanged the markets would likely rally. Whether or not a reaction as such unfolds is questionable but if it did volatility would present a tremendous trading opportunity. Some ETF volatility derivatives; TVIX, UVXY, VIXM, VIXY, VXX, VXZ, XXV – with options available for VIX, UVXY, VIXM, VIXY, VXX, VXZ. Due your own due diligence.
The FOMC meeting results next week will likely determine near term direction; I happen to agree with Peter Schiff that there will be no rate change -- because of this the US markets will rally for a period of time. JMO.
US equities continue to retrace a significant sell-off and have developed a bearish consolidation pattern (asymmetrical triangle). The FOMC meeting next week will likely be a catalyst in determining near term direction however the affect may not be sufficient in preventing further correction and possibly an official trend change. At this moment the bulls are not in control.
Appears the DJX is in a consolidation pattern prior to its continuation down but this could quickly change. Waiting for further developments. Ideally a firm bear pattern will emerge giving shorts an opportunity to take positions at discounted prices -- wouldn't be surprised if the bulls take control in the near term...
Quasi experts going long with relative certainty that the markets are flushed for an extended time period. IMO, they could easily go south with great force sooner vs. later. Take heed.
Todays DJX Intraday price reversal appears to have developed a gravestone doji candlestick pattern similar to the March 23rd 2015 session. Paying close attention to the 17579 pivot.
A confirmed pivot break of 17579 will initially target ~ 17100/17300 zone. Closing prices below the 200 dsma could be a game changer that will strongly favor the bears. A bounce scenario is still in effect however the markets must hold at current price levels above the the pivot. The question is will the DJX bounce or break? The answer should be known very soon.
Quite simply the new near term pivot is 17579. Today's price action appears to be a bounce but this is currently unoffical as the market has not closed. The DJX remains bullish above 17579 however a break of this level will strongly favor the bears.
As previously mentioned the chart formation per sessions 3/11/15 to 3/23/15 appeared to be a bear flag that resolved during yesterdays 3/25/15 session. Also previously mentioned an uptrend line per the intraday session lows; 10/15/15, 2/2/15, and now 3/26/15 has been touched and slightly breached today. The question is, will a confirmed break of that uptrend line occur? Today's close could provide the answer. If the break is confirmed new downside targets should be as follows; the long term uptrend lower channel line @ ~ 17450, the 200 dsma @ ~ 17300 and the ~ 17100 support/resistance zone. If the 17100 price zone does not hold the markets become vulnerable to significant declines that would likely target the October 2014 lows. Conversely if US equities find support during the near term on the aformentioned line then traders should expect a continuation of the long term uptrend.
Purchased some shares today, but not for fundamental reasons. Just appears the stock is catching a bid today with some volume, but hopefully your information is correct.
It's possible that a bear flag is forming. Watch for a break below the 50 dsma and the recent lows for confirmation. Dowside targets are noted below.
DIA is currently below the 50 dsma. Researched yesterdays rally on 3-11-15 and it seems I missed an uptrend line per the closing prices/line chart dates; 10/16/14, ~1/28/15, and now 3-11-15. Essentially the markets (DJX) could find support here but the intra-day lows trendline per those dates extends proportionately lower. The down/up/down trade action in the last 3/4 trading days resembles sessions 2/2/15 and 10/10/14 where resolution was rather significant. On the downside a break and close below the 3/12/15 lows will favor further selling pressure on an intra-day basis to ~ 17500. If this level breaks the next logical target is the 200 dsma ~ 17300. If the 200 dmsa/17300 and 17100 zones cannot support, the markets are vulnerable to significant declines. Conversely, bullish price action occurs above the 50 dsma ~ 17775 then targeting the 18000/18100 zone. If the rally extends beyond those zones then the markets should test and possibly surpass the recent highs. I suspect the answers will become apparent by the end of next week.
Within the past year and a half aside from the October 14 lows the DJX has bounced off the 200 dsma several times virtually spot on; 10/9/13, 2/4/14, 8/8/14, 2/2/15. The ~17100 price is not the current 200 dsma however appears to be a potential support zone. This zone acted as resistance ~7/22/14 (17133), 8/27/14 (17134). It was broken/rallied through per the 9/18/14 close (17265). The DJX then peaked on 9/19/14 (17350) reversed course and spiraled into the volatile Oct 2014 correction. More recently on 12/16/14 (17067 Low) and 2/2/15 (17037 Low) the ~17000/17100 price area acted as support. A more exact representation of this rather significant price zone could be noted as an average e.g. (17067+17037+17133+17134)/4 = 17092 or ~17100. To a degree I think both you and your friends are correct in terms of notable downside targets (17100/17300) however the current 200 dsma ~17300 violation/support ('next target' as stated in my original post) must clearly occur prior to 17100 via market decline... Of course all of this is just my opinion in addition to investors/traders bearing the responsibility of doing their own due diligence.
Official close today; DJX - 332.78 @ 17662.94. Expecting some natural ebb/flow near term, but static aside will pay close attention to key levels. As noted; the 200 Dsma seems a logical downside target and it will be interesting to see what happens. You may have made a great call here JR, but with these markets, who knows....