Good morning Traders,

A brief update on our position in oil.  Visit www.stockbarometer.com to subscribe.

Back on 7/25 we recommended the following options for USO based on our research.

OIL PUTS

Here is the current pricing on the September PUTS:

uso sept puts

So the 37.5′s are up some 360%…

And here are the October PUTS:

october puts uso

The October 37.5′s are up over 260%.

That being said, what’s our view on oil now?  As you know, we’re developed several directional indicators on oil (and gold, which we’re long PUTS and Nat Gas, which we’re long CALLS).  It’s all available in our research indicators.  But here’s a general one on supply and demand – because periodically it matters:

oil inventories

Sometimes the basic law of supply and demand matters.  This chart is showing oil inventories growing, which isn’t something you’d expect in a heating up economy.  Sure – economic reports are looking very positive, but there’s a lagging factor to them.  Our indicators suggest that the economy is cooling off – and oil is one of those factors…

That being said, oil volatility is climbing, which is what it needs to do in order to set a bottom.  I’m guessing around the next options expiration we may start seeing some bottoming action.  To learn more visit www.stockbarometer.com and try any of our services. 

Regards,

www.stockbarometer.com

Good evening Traders,

As the week sets up, here is a chart from our Daily Stock Barometer Article this am.  Visit www.stockbarometer.com to learn more.

stock market returns

Good morning Traders,

Here’s an indicator from our morning report to clients at www.stockbarometer.com :

stock market cycle

Please visit our site and subscribe to the Daily Stock Barometer to learn more or access our research.

Good morning Traders,

Here’s a chart that shows the market’s potential 1 month return based on the
action of the barometer.

stock market future returns

The line on the bottom is the barometer.  The line on top is the 1 month
future return of the QQQs.  As you can see, the right side of
the return line is not filled out yet – that’s because this is a
forward looking indicator, so we do not know what the return 30 days from today
will be…

But we can look back and use this as a basis to see what similar points in
time have returned in the past.  So for example, if you look back at the
first peak in the barometer from 2013 – you can see that when the barometer
turned lower, the market’s future return was around -5%. 

And when the barometer bottomed after that point, the market returned
+5-7%. 

So based on this data, we can make the following observation.  Given the
level of the barometer today, the market’s likely future return is less than
zero to -5% over the next month.  We do look over longer periods, but 1
month is a good focus point, since most trades should last longer than a
month.

What you can also observe from this indicator is that during a bull market,
the negative returns will be muted.  You can look at the period from July
2013 to the beginning of 2014 and for the most part, you could have bought the
Qs at any time during that period and closed your trade in one month with a
positive return.

Let us know if you have any questions in the above.  It’s part of our
research we provide here and we provide it for other indicators as well to
ascertain the data and if it’s useful or not in trading. 

The market is turning lower this am and we’re close to a window where we
would start issuing our covered call and put options trades.  So stay
tuned…

Regards,

www.stockbarometer.com

To learn more about our services – visit www.stockbarometer.com and become a client.

As we have often warned, reversals can tend to line up with expiration. 
This is expiration week, so I expect some topping action into this week. 
And from there the market could be vulnerable into September.

barometer

There’s plenty of energy in this market to continue higher.  What has me
cautious here is the lack of a previous 9 month cycle low – suggesting the
market will make up on this 20 week (note the chart incorrectly points at 10/1
as a 9 month, it’s a 20 week, which carries more weight because of the lack of a
previous 9 month bottom.  One could argue that the April bottom represented
an early (left justified) 9 month cycle low – but that’s what makes a
market. 

cyles

In this really long term view of cumulative breadth, we see a normal
market.

nyse breadth

However, the view from volume is a little more concerning.  If the
market stalls here – then we’d get a little more bearish.

volume

Another warning sign is coming from the ECRI.  There’s a question about
the health of the economy.  This is critical here if the ECRI turns lower,
so too will the market.

ecri

Gold is approaching an action point.  We’ll be watching for gold traders
to get overly bullish and position for a contrarian trade.

gold

Some of our indicators are developed to identify anomalies in trading action,
which can sometimes lead to reversals.  We’re still monitoring this
indicator for signals – but we have one now on nat gas, which is testing lows
again.

nat gas

And on oil, traders are still bullish as CALL volume dominates even as oil
breaks lower. 

use

And finally, an observation with oil open interest whose direction is
bearish, but level could be approaching bullish.  Oil’s opening weak as we
open this week and I trust you’re seeing it at the gas station as I am…

oil

So we see this week as being a set up week for the next larger move.  If
the market continues higher and complacency sets in, then we could be
positioning for a bearish September approaching a 20 week cycle low.

Good
Friday Afternoon Traders,

 

Over
the past several weeks, we’ve been introducing you to Gregory Clay, our Chief
Options Strategist and editor of High Value Option Trader.  On May 13th he
got his readers into a bull call spread in TSLA and closed the position at the
last options expiration.   The below email details the 150% profit in
just a couple of weeks! 

 

Gregory
has also taken positions in VIX, HUM and IBM.  To follow along with those
trades for the next 4 weeks for only $1 click the below link and use
discount code HVO1
If you sign up over the next week, we’ll give you a free
copy of Edwin Lefever’s Reminiscences of a Stock Operator.  The most
popular trading book by far!

 

CLICK HERE TO TRY GREGORY CLAY’S HIGH VALUE OPTION TRADER
- Use Discount Code HVO1 for a $1 four week
trial.

 

High Value Option Trader
—————————————————————-

The
May 13th High Value Option Trader setup a Tesla Motors, Inc.
(NasdaqGS:TSLA) 17-day Bull Call Spread.

 

 

Exit
Plan

The option contracts expire this coming Friday and since
the position has reached our closing prices we are immediately executing the
CLOSING TRADE displayed below.
The
suggestion is to submit a limit order for the option strike prices below
(Friday’s
closing price bid/ask mean)

 

 

 

 

 

Approx. gain $3,720 (Excludes commissions and
fees
)

Projected
gain is an approx. 150% profit

 

Below
is the chart we used several weeks ago when we analyzed the Tesla Motors, Inc.
bull-call spread trade.

 

 

 

  

Below
is the most recent Tesla daily chart which confirms our analysis above is valid
and the stock price filled the gap to hit our price target.

 

 

Regards,

Gregory
Clay

Options
Strategist

 

As
for the markets, tops are the most difficult thing to call, and there is no
shortage of those calling for a top here.  Usually when the crowd is
leaning strongly in one direction, like calling a top, then the market advance
will continue.  And Pro traders like Gregory Clay will continue to reap
profits by not fighting the trend.

 

Regards,

 

Carl
Adams, Publisher

www.stockbarometer.com

 

PS
- Don’t forget, if you sign up within a week from today, we’ll send you a
free copy of Edwin Lefever’s Reminiscences of a Stock Operator.   CLICK HERE TO SIGN UP  and don’t forget
to USE DISCOUNT CODE
HVO1
when signing up to get your $1 Trial.

QQQ Timer

Good afternoon traders,

This indicator shows you a measure of efficient market theory, whereas the market moved sideways, but the potential energy built, resulting in this rally.  But this indicator can show a weak move to follow.  To see the next update, visit www.stockbarometer.com

Here are some covered calls:

covered calls

For our complete list, visit www.stockbarometer.com and sign up for the covered call alert newsletter.  We’ve also released our top put options in our stock options speculator service.  We are getting sell signals, and believe this is the time to act…

6/2/2014 5:56:52 AM

Good morning Traders,

As we run through today’s review of our research, we see some positions developing as early as this week:

In our QQQ Trader service, when our stock market timing indicator reaches this level, expected one month gains are 0 to -5%.

 

From our weekly research, the money flow is cautious.

http://www.stockbarometer.com

Last year we issued the following forecast – here’s where we stand.  For stocks to continue on this path, bonds will need to sell off and money will need to continue flowing into stocks

 

In our commodity options service, we’re positioned in GOLD PUTS.  Here’s one reason and why we expect further weakness into July…

 

This potential broadening top pattern which would fail in the 77 level!

 stock market timing

We have resolution in the big divergence.  Now at these levels, we have to start thinking about a top.  That means we’ll likely issue our top Covered Calls this week with our top Stock Options Put Trades in our Stock Options Speculator service!

 stock market timing

This simple indicator keeps track of tick lows, which are a better read on the market sell pressure than anything else.  This pop in the reading suggests a lack of sell pressure supporting the market rise here. 

 stock market timing

We’ll need to see how the market responds to a tick up in sell pressure, which will lead us to a measure of efficiency in the next market move.  Tops tend to linger and frustrate traders.  And I expect we’ll see the same here.  To learn more about any of our services or access any of our current trades, visit www.stockbarometer.com

Regards,

www.stockbarometer.com

Gold Seasonality

Happy Memorial Day Monday Traders,

One thing for sure with gold, is that something has to happen soon.  This sideways energy that’s building is going to lead to a large move and we’ve been waiting to respond.  The above chart of seasonality suggests weakness into July, which could mean stocks continue to rally and gold tanks into July, which is just over one month away.  That move lower could set up a significant bounce, looking out over the longer term. 

If you want to follow along, we can a variety of ways you can.  Visit http://www.stockbarometer.com/learnmore.aspx to learn more.