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You see, the institutions will usually look to see where the small retail options traders have placed there bets. If the small retail options trader has bought a fair amount of puts on the market during last week's decline it is a good chance that the large institutions will rally the market this week. The opposite would be true if the small retail options trader bought call options last week, then the institutional traders would usually drive the markets lower this week. It is important to note that many of the small options traders will rarely, if ever, hold their position into the Friday expiration. Usually, the small retail trader is simply looking to capture a gain in the premium paid for the option. If they have a loss, they will either close out the position for a loss or let the options position expire worthless. Rarely, if ever are the small retail options traders looking to take possession of the stock. Most small retail options traders simply do not have the money to buy stocks directly and that is why they are playing options in the first place. The institutional traders know this and will capitalize every month.
How do the institutional traders know when a small retail options trader takes a position? This is easy, when a small retail options trader takes a position they will usually buy just a small number of contracts. An institution will not initiate a one or two contract position instead they will take a thousand contract position or more. These days there are elaborate computer programs that keep track of the small number of contracts purchased. This is why it is important for the small retail options trader to not buy the option during the current month. The small retail options trader should always buy an option contract a month out and that will give them a fighting chance against the big money institutions.
Most games will be played by the institutions in the popular stocks and on the indexes. Therefore, stocks such as Netflix Inc.(NASDAQ:NFLX), Amazon Inc.(NASDAQ:AMZN), Sandisk Corp.(NASDAQ:SNDK), and Akamai Technologies Inc.(NASDAQ:AKAM) and others will usually see very volatile action this week. This is a week to expect the unexpected. There will usually be lots of rumors and ridiculous reports being released into the Friday expiration. This is a time to be short term and protective of all trades. When you combine options expiration and the recent activity in the stock market get ready for an increase in volatility this week.
http://www.ft.com/cms/s/0/cc9c8b06-c85a-11e0-833c-00144feabdc0.html#ixzz1VFC1k63W
The death cross forms when the 50 Day Moving Average crosses the 200 Day Moving Average in a downward trajectory and is a widely followed indicator that’s commonly viewed as a harbinger of bear markets.
The stock market leaders today are banks. In the fear and volatility over the last few weeks, the bank stocks took the biggest hit. It makes sense that as calm returns, these stocks would see a continued solid bounce. Bank of America Corp (NYSE:BAC) is trading at $7.49, +0.30 (+4.17%) and JPMorgan Chase & Co. (NYSE:JPM) is trading at $36.57, +0.66 (+1.84%).
Technology seems to be the weakest on the day after Google Inc. (NASDAQ:GOOG) bought out Motorola Mobility Holdings Inc (NYSE:MMI) for $40.00 per share. This is causing some selling in Google which in turn is causing selling in some other internet plays like Baidu.com, Inc. (ADR) (NASDAQ:BIDU) and Amazon.com, Inc. (NASDAQ:AMZN). Many technology stocks have seen a rapid share price increase over the last few trading days as well. The market seems to need a small pause to digest the gains.
The market continue to look towards the Merkel Sarkozy meeting tomorrow. Great news and optimism could give more legs to the latest bounce while no news and pessimism could give rise to another sharp, quick sell off. To get the best trades in the world, the best analysis and guidance given to hedge funds, take the seven day free trial to theResearch Center and Intra Day Stock Chat. Join the pros to profit with the pros.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
There is always an element of price action driving investment decisions, but today it seems to have hit unprecedented levels. The relief is palpable. People are getting bullish again, but so many of the bullish comments seem to start with the fact that stocks are up today. There were some investors who were happily long coming into this week, there were even some who were short at the start of last week and turned into bulls at some time last week (hats off to them). What is bizarre is how many people who were nervous longs last week, suddenly feel comfortable. If stocks were down 5% would they still be so bullish?
http://www.zerohedge.com/news/guest-post-market-so-investors-are-bullish-and-why-eurobonds-wont-work
PRIOR MARKET CRASHES 08/09/11 from chessNwine on Vimeo.
The stock market leaders today are banks. In the fear and volatility over the last few weeks, the bank stocks took the biggest hit. It makes sense that as calm returns, these stocks would see a continued solid bounce. Bank of America Corp (NYSE:BAC) is trading at $7.49, +0.30 (+4.17%) and JPMorgan Chase & Co. (NYSE:JPM) is trading at $36.57, +0.66 (+1.84%).
Technology seems to be the weakest on the day after Google Inc. (NASDAQ:GOOG) bought out Motorola Mobility Holdings Inc (NYSE:MMI) for $40.00 per share. This is causing some selling in Google which in turn is causing selling in some other internet plays like Baidu.com, Inc. (ADR) (NASDAQ:BIDU) and Amazon.com, Inc. (NASDAQ:AMZN). Many technology stocks have seen a rapid share price increase over the last few trading days as well. The market seems to need a small pause to digest the gains.
The market continue to look towards the Merkel Sarkozy meeting tomorrow. Great news and optimism could give more legs to the latest bounce while no news and pessimism could give rise to another sharp, quick sell off. To get the best trades in the world, the best analysis and guidance given to hedge funds, take the seven day free trial to theResearch Center and Intra Day Stock Chat. Join the pros to profit with the pros.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
Japan's April-June GDP contracts annualized 1.3%, http://t.co/dlCIA9y
