The candlestick symbol to which you refer may mean a reversal if it is at the top of a run. The gap up, then recession from the high and lower close (long wick), means sellers pushed the stock back down but then buyers rallied it back up to the close and hence the smaller candlestick […]
A double top is a bearish pattern characterized by a stock’s or index’ move to a high then a move back down, followed by a second attempt at a high that fails, the second try usually occurring on lower volume. That is unhealthy price/volume action which typically can’t boost the stock over the previous high. […]
An option delta measures approximately the change in the option price for every $1 change in the underlying stock price. For example, if a call option has a delta of 50 (it can also be shown as 0.50), for every $1 the underlying stock moves up or down, the option will move, all other things […]
When looking at the market we learned the hard way to watch what the market was telling you and then react accordingly. No matter how smart I thought I was about the market and started feeling certain that something had to happen, the market always seemed to show me no, it did not have to […]
As intitutions (mutual funds, pension funds, insurance companies) control 70% of the money that is invested in the market, they are typically involved in many of the issued traded on the larger exchanges. They typically move in stocks that trade in excess of 100K shares per day so they can move in and out or […]
We prefer buying put options on downside plays because we know going into the play what our maximum risk is. In other words, the most we can lose on a put play is our investment in the option if it eventually expires without us selling it or exercising it. With a short sale if the […]
Trading before and after the open and close has improved in the last four years with more efficient trading systems and better liquidity. Anything to help match up orders helps, and with more individuals participating it has helped liquidity. One of the problems with trading outside ‘normal’ hours is that there is no market maker; […]
Implied volatility is a component of option pricing along with the time until expiration, whether the option is in, at, our out of the money, etc. What implied volatility tries to do is assign a value to the assumed range of movement a stock might have during the life of the option. There are two […]
During any individual session there are several signals we look for to see if institutions are net buyers are sellers. The fundamental indication is whether the market overall is rising or falling on stronger volume. If volume is running stronger, then the market move has institutions behind it as they control over 70% of the […]
Very good question. Try to think of stocks as going through phases of life. There is a larger phase over the years, and then there phases within the larger moves. When a stock is trending higher it tends to follow a routine: base, breakout, run higher until it exhausts the base, then bases again for […]
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