Monday, October 17th, 2016

Market conditions

Down 777 one day and up 485 the next ? Lets not forget all the troubles from yesterday have not vanished. This is a typical behavior of bear markets, increased volatility , high VIX , brutal plunges and sharp rallies and than eventually a brutal plunge deeper than the first one! If you look at charts, you will find, SPX and DOW are making lower highs and lower lows , both 50 day and 200 moving averages trending down as well. So we can’t just become optimistic just a day after.

The economy is still grinding , bank failures imminent, credit freezing up, harder to get loans, mortgages and lines of credit. Congress still out to lunch, they may revive this package and it may flop again. None of the charts on major stocks like AAPL, GOOG, RIMM, BIDU, FSLR, POT, CF have solid bases and they are damaged. Looking at these charts shows what a journey we have been through.

This makes the case should we be day traders and take a lunge at it ? Sure that’s is the only avenue still viable and it will make much more sense if you took advantage of intraday swings jockeying your keyboards. But on this site we do not daytrade. Its far too risky and adventurous.  Placing static index option trades for monthly income is somewhat beset with problems. I have seen many Option advisory services taking brutal beatings  and their followers getting killed this month.  So it may be prudent to avoid these treacherous markets till the volatility dies down. We need to see VIX down in the 30 area, at least that is still manage able. Index option strategies will not work very well otherwise.

For now, stay on the sidelines, its the best place to be, unless you want to day trade and jockey your keyboards.

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