Thursday, October 19th, 2017

Index options trading- strategy


Index option trading is coming back. Major indexes are up last 3 days. DJIA, SPX, RUT, COMP, RUT all have made significant gains, but the market remains dicey and very volatile. VIX still up in the 60-70 area and hardly coming down and that is still a major concern.

Investors Business Daily has changed its market outlook from MARKET IN CORRECTION to MARKET IN RALLY MODE. That itself is great news ! On Monday major indexes made a powerful FOLLOW THROUGH DAY and since than have consolidated their gains instead of selling off hard. Keep in mind this is a bear market, and all rallies should be treated with suspicion and watched from the corner of the eye.

We have several trades ready to put down once we start getting in a comfortable range. A little patience and self control can go go a long way. This past 6 weeks have been brutal on investors. As a subscriber or subscriber of this blog, you have not lost a SINGLE PENNY  with us, if you followed what we did here. Meanwhile many options advisory services have raked in colossal losses and people have lost so much money it , it will take 2 years trading to recoup that!

Our self preservation instincts are somewhat higher than others and you can see that……

Major Indexes like NDX, SPY, IWM, are forming a cup and handle type pattern on 15 min charts. These are clear cut chart patterns which prevail- before significant bullish moves. All bull markets have started with a follow through day, and we had ours on Monday, and unless the market undercut that, by selling off, we shall see higher grounds from here to trade.

The Fed rate cut was another welcome sign for Index option traders. This means that the US economy would be much better off in the future if not sooner. The indexes did not rally as hard as they used because the rate cut was baked into the rally earlier.

Today’s GDP ‘s numbers and report came out positive 0.3 where the economy did shrink, but didn’t go into negative growth which would have signaled a recession, and provided fuel to the doom and gloom that prevails and expounds from such reports. Market indexes shrugged off these news and moved higher.

Our Index option trading should be back soon. We have several Index spread options trading strategies and credit spread trades ready to go…..





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  2. […] Your Leather wrote an interesting post today onHere’s a quick excerpt Index option trading is coming back. Major indexes are up last 3 days. DJIA, SPX, RUT, COMP, RUT all have made significant gains, but the market remains dicey and very volatile. VIX still up in the 60-70 area and hardly coming down and that is still a major concern. Investors Business Daily has changed its market outlook from MARKET IN CORRECTION to MARKET IN RALLY MODE. That itself is great news ! On Monday major indexes made a powerful FOLLOW THROUGH DAY and since than have consolidated t […]

  3. […] the rest of this great post here […]



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