The Real Secret Behind GME
Hey Traders, Newsflash: The Great GameStop Saga of ‘21 is actually closely related to … my Facebook page? Allow me to explain … When I look at my Facebook newsfeed, I see what all my friends, annoying lovely neighbors and crazy relatives are up to. But in between dance recital pics and cat memes, Facebook […]
Sour Grapes? You Bet!
Hi Shoppers, Back in the day when there was only one exchange for an order to go to, individual market makers provided the liquidity to fill customer orders. Those market makers competed with each other for price discovery. This is how it worked on the Cboe … A broker walked into a trading pit of […]
Hunky-Dory VIX? Not Quite
Hey, Traders. With a decent market rally move of the day Thursday, the VIX had a precarious drop. Even with the end of day rally, the VIX finished down 7 points … And the drop pulled down the entire VIX curve with it. As you can see below, the VIX futures went from a full […]
The Worm Has Turned… What’s next?
Hey There Income Hunters, Well, the patience paid off … And, boy, was it worth it … a recent put spread play produced a 60% profit — in just six days — for a 3,500% annualized return! This is how the divergence between price and relative strength of price played out: On Jan-08, SPY set […]
Tuesday’s Make or Break Session
Hey Traders, While the headline on Wall Street is Game Stop, at Option Pit we know that the VIX is what really tells the story for the markets. When the VIX is saying “look out,” those in the know heed the warning. This is why Tuesday’s session was so important. The VIX Light closed Monday’s […]
The Robinhood Double Squeeze
GGME, AMC and, to a lesser extent, NOK are in the midst of two squeezes at once. The first is a short squeeze. A short squeeze is caused when a stock starts to rally and has TOO much short interest. This is the case with these names. Let’s use GME as an example. GME has […]
Tide Turning on Small Caps?
Ah, the art of contrarian investing … It’s an investment strategy that rewards patience, confidence and rationality with high returns. Well, the market has certainly been testing my patience lately, as valuations seem to have lost all meaning. (Hello, GME!) However, it can never shake my confidence … and I have some good firepower behind […]
Bears Are Coming Out of Hibernation …
Hey There Income Hunters, In the past couple of weeks Citi, Goldman and now Bank of America have all come out with calls for an equity market correction call in Q1 … BOFA’s “Bull & Bear” market sentiment indicator, for example, is approaching a sell signal (which happens when it exceeds 8 out of 10;…
How I Trade Little John to Lock Profits AND Ride Winners
Hey Traders, I’m coming to the end of my first quarter of trading with the Little John technology built last year by my Option Pit team. Little John allows me to organize and track Robinhood trends, and my account is up over 30% in three months … Not too bad for 90 day’s work! Friday…
The Worst Sectors for 2021
Hey Traders, Some of 2021’s biggest trends will be formed by two influences … (1.) The opening up of the economy and (2.) the Biden administration. Let’s start with opening up the economy … Good news for many. BAD news for the stay-at-home trade. While there are stocks that will be fine, like AMZN, others […]