First, I just want to acknowledge the human tragedy that is unfolding in Ukraine … a progressive country with largely western values and overwhelmingly western aspirations.
Clearly, this is a major news factor that is impacting market behavior right now, but I do not want to reduce it to just digits and chart setups. The reality on the ground is ghastly, lives are being destroyed for the sake of one maniac’s vanity, and once again we see the result of appeasement and extraordinarily bad leadership from our western leaders over many years, with zero foresight whatsoever.
Enough said.
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In today’s Review I have something of a treat for you:
- You will see our new design which will transform your experience in every way, paving the way ultimately to linking up with brokers. This new design will start to roll out in the coming … WEEKS!
- Also today I’m going to touch on how you can use options mis-pricing to your advantage. I won’t go into detail, but if you look at GLD options and the NUGT (2x GLD) options, you’ll see the latter are more than twice the value they should be.
This gives opportunities for us to take advantage of GLD when it sets up. For example, we can create excellent options trades by buying and selling different options at the same time.
Well, what if you could do it so that you buy the cheap versions and sell the expensive versions to create an even better result with hardly any risk?
You can!
Effectively the mis-pricing means we can create what’s called an “arbitrage”.
Again, I don’t explain exactly how today, but just that it is possible, and it’s something we’ll spend time on at the Bootcamp.
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So, Tuesday/Wednesday/Thursday the market was in free-fall, and Thursday/Friday saw an extraordinary bounce. The question is what kind of bounce are we witnessing? Is the cat dead or alive?!
Right now, I would say we are not out of the woods. All the major averages are comfortably below their 200-day Key Levels.
Also, as you’ll see in today’s Review, there are very few high quality setups.
Yes, the markets are going to gyrate and produce some massive moves in the coming days.
But we look for predictable setups where we can control our risk.
And right now those setups are few and far between.
So …
Be the lion … not the headless chicken!
Our high quality setups can reappear – even from here – in a matter of a couple of days.
So, feel that “zen” of being in control and picking your moment to strike, rather than trying to chase everything that moves.
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Current Market Behavior:
The big question now is whether we get another waterfall as the Dow and S&P approach their 200-dma’s.
The Nasdaq waterfall’ed on its 200-dma while its OVI was persistently negative, and I do feel there is more volatility to come.
This rally was somewhat predictable as the S&P was very oversold, as displayed by my S&P Swing Timer which hit oversold levels.
Remember, a short term indicator with regular signals (my arrows) is likely to contain more “noise”, be more over-fitted and less reliable, so my favored Market Timer is my S&P SwingTimer (medium term), especially when it shows oversold.
Ok then … so where was the S&P trade? This time not so easy, but it was the Friday follow-through from the Thursday rally.
Again, do not use the Market Timers as blind signals. There is a certain discretion to be deployed with these, as I will always mention in any commentaries about them.
Market Outlook:
We’re not out of the woods, but energy stocks are looking less overbought now. If and when they start flirting with their 50-dma’s I’ll be very interested.
Stock Selection:
Not much in the way of high quality setups today, so it’s pretty quiet out there for high quality selections. Still a number of learning points though.
Application:
I love the way we can see – so quickly – if the market is friendly or not.
Software Upgrades
Some huge upgrades coming, for which I’m showing you the designs today. Complete game-changing stuff.
You’ll soon be using our applications as a “Terminal” but much friendlier and more focused than a Bloomberg!
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Remember, you can play the video at 1.25x or 1.5x speed if you want to save time! I have placed all the stocks covered in today’s review in your “Latest Preview” watch list.
