Stock Market Analysis

Tuesday, April 14, 2015

Earnings and Expiration Uncertainty

The US market sold off on Monday exactly how I predicted it to on Sunday ahead of the earnings season. This week is also turning out to be as volatile and uncertain as I predicted ahead of the April expiration. The better than expected business inventories numbers failed to significantly turn the tide around and left bond yields lower across the board as investors continue to flee for safety and total equities put call ratio remains in the uncertain zone. All of these occurring during this period where the S&P500 is in yet another congestion zone makes for very uncertain short term trading. However, in the slightly longer term, its not hard to see the bullish inclination in the market due to the bullish intermediate and primary trend. As such, this may also be the best time to start strategically prepositioning for a breakout.

For now, the US market remains in short term neutral trend within an intermediate and primary bull trend.

Sunday, April 12, 2015

Weekly Update... Week 3 April

Once again the SP-500 reaches upwards for the top of the bullish pennant formation in preparation for an upside breakout just like how I predicted it last week. No surprises there. Total equities put call ratio also came back down to 0.85 in favor of the bulls. Earnings season also starts Monday so, I will not be surprised to see some short term profit taking on Monday after such a bullish week last week ahead of the uncertainties. This was also why I made my Master's Stock Options subscribers take a quick 28.5% profit on our winning call options (Read more about what call options are)position on BAX last Friday ( click here to read about this win ). Perfect market timing, knowing when to take short term profits and knowing when to extend your profit is what makes successful options swing trading. Such perfection and consistent execution may be hard to achieve for amateur traders and this is why we also started our Managed Accounts service for those who would like for me to trade your account for you.

This week is April options expiration week, this is also when our Ride the Flow system takes profit and is set to once again make its predicted 5% to 10% monthly profit without surprises. 

For now, the market remains in short term neutral trend within an intermediate and primary bull trend.


Wednesday, April 08, 2015

Uncertainty Grows... What's Next?

The market continues to move largely sideways on Wednesday through this period of volatile economic data. Investors were encouraged by the promising outlook of higher inflation in the near future from the FOMC minutes and returned from the the safety of bonds, raising bond yields across the board. However, such a limited trading range on such healthy volume does suggest a strong sense of uncertainty and that is supported by the total equities put call ratio lingering once again in the uncertain zone of between 0.95 to 1.05. This shows that options traders, which is generally a good indicator of short term sentiment, are largely divided between call and put trading. When short term sentiments are bullish, total equities put call ratio would skew towards call options trading and vice versa. Even though there is alot of short term uncertainty, forming the bullish pennant formation on the SP500 now, the longer term remains healthy as the SP500 continues to trade strongly above its weekly 30MA and as the global economy continues to grow. A bullish pennant formation also means that the most likely direction of a breakout is to upside, continuing the previous bull trend. I have already begun pre-positioning my Masters Stock Options Picks subscribers for this breakout, have you?

For now, the market remains in short term neutral trend within an intermediate and primary bull trend.

Tuesday, April 07, 2015

Why Is The Market Up on Lousy Jobs Report?

Welcome back from the Easter long weekend!

In a surprising twist of events, the US market rebounded yesterday Monday even though last Friday's jobs report and yesterday's ISM services continue to disappoint. Why is that so? Economic indicators are like the stock market. They never go straight up or down. Even in a recovering market or a bullish market, economic indicators have down periods interspersed within longer periods of up periods. This period is clearly one of these down periods. Which is why knowing so, investors are actually looking to buy into the weakness, in anticipation for the next round of good economic indicators. Longer term bond yields rose as investors reallocated out of bonds into equities once again.

On the technical front, the SP-500 made yet another nice bullish pennant formation, looking poised for yet another bullish breakout. In fact, major index futures are already looking upwards at this point in time. Total equities put call ratio also came back down in favor of call options trading indicating a short term bullish outlook at last after spending most of last week in uncertain zone.

Nothing in the fundamentals or technicals suggest that this intermediate and primary bull trend is over. This is why me and my Master's Stock Options Picks subscribers continue to buy into the weakness and profit. In fact, we took a nice 29% profit on Kellogg's Call Options last week (see how it was done here) and we should be able to take profit on yet a couple of profitable positions this week.

For now, the market remains in short term Neutral trend within an intermediate and primary Bull trend.

Wednesday, April 01, 2015

Masters 'O' Equity Lands In China!

Masters 'O' Equity made a successful move into China, opening up our office in the heart of Beijing following the successful launch of the Chinese 50ETF Options! We are honored to spearhead the options industry in China by offering our training, a chinese version of our #1 options education site Optiontradingpedia.com as well as launching China's very first options based hedge fund! This move will also help our foreign clients invest directly into the Chinese options market, which is also an investment into the only currency that cannot depreciate in the long term... the RMB! Anyone who wishes to participate into this new venture in any way can email me at founder@mastersoequity.com .

Sunday, March 29, 2015

What to Expect on Easter Week?

Welcome to Easter Week!

The market found a bottom and reversed itself following the huge 25 March dip last week, exactly how I said it would. This means that instead of selling (something you would probably have done in a panic if you have not read my analysis), you should actually have cost averaged or putting on new positions in anticipation of the next leg up (just like you would if you have joined my Master's Stock Options Picks service).

So far, the market isn't surprising us. Even though everything in the charts do suggest a good week ahead and that we should see a solid rebound from this area, Jobs Report is going to be released on Friday as scheduled even though markets will be closed. This means alot of investors might take profit on Thursday or Wednesday ahead of the long weekend, so expect some volatility.

Now, some of you might be expecting the market to go back into a volatile sideways channel between 2060 and 2110. If that is the case, you could also consider using neutral options strategies like the Iron Condor Spread.

For now, the market remains in short term neutral trend within an intermediate and primary bull trend.

Thursday, March 26, 2015

Market Ditched... Start of Downturn?

Market ditched strongly and unexpectedly today as a weaker than expected Durable Goods Orders hit the news. Indeed, with the recent volatility in the market along with the fact that the market has indeed come a long way already, it is not unusual to see traders take short term profit off the table. However, it is also interesting to note that instead of falling, bond yields actually rose across the board! This tells me that even though traders are selling out and taking profit, serious institutional investors are actually exiting bonds and entering on the weakness. The VIX soaring 13% in one day along with an overdone signal on my Star Trading System both tells me that this sell off isn't the start of a significant downturn and is most likely a one day thing. Indeed, such a huge reaction to such a volatile economic indicator is clearly an over-reaction. However, we will be watching the SP-500's 2040 support level closely. As long as that level holds, this bull trend is in no danger. However, yesterday's drop still took our short term trend indicator down to Neutral.

For now, the market turns short term neutral trend within an intermediate and primary bull trend.