Articles

For a while there it looked like “all our Christmases had come at once” with many thinking making money this way is just too easy. Apart from the fact I have laboured the point about retracements over the last several weeks there is in fact seasonality to retracements in many markets.

This week I was planning to follow on from last weeks article about Scanning using the Starter Pack Pro Software. However, during the week the SPI200 has brought up an opportunity to share a diagnosis of a trade too important to overlook. The run up on the SPI200 over the past couple of weeks has been in the category of extraordinary. The run up lasted 12 consecutive trading days without a lower bottom on the bar chart. Point A for the trade was on 1 October (3151) and Point B on 17 October (3306), giving a Reference Range for the trade of 155 points.

Plenty has been written by the Trading Tutors this year regarding bond and equity pricing. We have seen the inverse relationship that occurs between these markets and also at odd times where pricing can move in the same direction. Rather than continuing the debate on where and why these prices are moving I wanted to draw your attention to an interesting situation as to where both markets are positioned right now.

Have you ever heard the expression that options are “wasting assets”? Since options suffer from what is known as time decay, with each passing day, the options contract will lose value. Therefore, if a strategist buys a put or call and holds it in their account, even if the underlying stock or index makes no price movement at all, the portfolio will lose value. As a result, options strategists must carefully examine how time is effecting their options positions. This article explains how.

Some investors picked this stock market run up as early as March, some have picked it up over the last few weeks, some have just got in recently and are now wondering whether they should bail out and lastly there is the group that have remained on the sidelines. And I guess there are probably many investors that fit into almost all categories.