While it doesn't seem like much, the spread between strike prices was three points and the risk was limited to the initial debit. Marked-to-market at 1.45 on the close Friday results in a.
Suggestion adjusted in Digest Issue 40 "Goodbye September. Original suggestion in Digest Issue 39 "Buy-the-Dippers Return. WTI Crude Oil ( CL) 79.35 basis November futures ended the week up another 3.47 points or +4.57% higher.Įnergy Select Sector SPDR Fund ( XLE) 56.57 up 2.73 points or + 5.07% last week. While still below the low made last September 30 at -8.12 before turning higher on October 1, 2020, the current upturn, should it continue, would encourage "buy-the dipper" traders and the bulls. Our similar IVolatility Implied Volatility Index Mean, IVXM using four at-the-money options for each expiration period along with our proprietary technique that includes the delta and vega of each option, slid 1.86 points or -10.71% to close at 15.51% compared to 17.37% for the week ending October 1. A quick rise of 13 basis points in the yield of the 10-year Treasury Note from 1.48% on October 1,to 1.61% on Friday seems to explain the under performance relative to the S&P 500 Index while confirming the consensus view that the Fed intends to announce a taper program in early November.ĬBOE Volatility Index® ( VIX) declined 2.38 points or -11.25% last week ending at 18.77. 98 of a point or +.27% and still well below the 50-Day Moving Average at 369.54. However, a further decline toward the center of the channel seems more likely.Īfter peaking at 4545.85 on September 2, the decline down to reversal point 3 totaled 266.91 points or -5.87%, from the intraday high to the intraday low.įriday's trading in a narrow range all morning appeared unusual after the much anticipated employment report as traders decided how the report may influence the upcoming FOMC meeting in early November. If so, closes back above resistance from the red 50-day Moving Average at 4438.04 hovering above like a cloud on a rainy day would confirm the end of the current pullback.
First, it suggests lower prices while providing a guideline in the less likely event it closes back about the upper channel line. Connecting points 1 & 3 and 2 & 4 creates a very useful downward sloping channel. Here's the chart after applying the 4-point reversal rules used for continuation patterns. S&P 500 Index ( SPX) 4391.34 advanced 34.30 points or +.79% last week after a thumping 1.30% decline last Monday before recovering at the end of the week after the employment report.
Tick data suite update#
The Market Review provides details including a chart along with futures and options indictors followed by another marked-to-market update for the open Energy Select Sector SPDR Fund (XLF) long call spread idea. Unlike the long accumulation channel from the March 2020 low the current operative technical pattern for S&P 500 Index looks like a downward sloping channel – call it a distribution channel.
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