Technical Analysis & Charts Archives - CBOE Blogs

  • The Week in Russell 2000 Trading - 8/31 - 9/4

    The Week in Russell 2000 Trading - 8/31 - 9/4

    The Russell 1000 (RUI) was down 3.31% last week and the Russell 2000 (RUT) lost 2.3%.  This outperformance (I know it doesn’t feel like outperformance) of small caps leads me to ponder the true concerns of market participants that actually put money to work.  The press continues to focus on the Fed’s next move, which will be known in just under two weeks on September 17th.  However, small cap stocks, as a group, are more exposed to the domestic economy than large cap stocks. [...]

  • Market News | Technical Analysis & Charts | VIX | Trader Talk | Aug 23, 2015, 11:05 AM

    The Week in Russell 2000 Trading - 8/17 - 8/21

    The Week in Russell 2000 Trading - 8/17 - 8/21

    Small cap stocks held up (generous term here) well versus large cap stocks last week.  The Russell 2000 (RUT) was down 4.61% while the large cap focused Russell 1000 (RUI) lost 5.73%.  The drop for RUI was the biggest one week lost since mid-September 2011.  For the year RUT and RUI are down 3.98% and 3.89% respectively.  I’m going to say that’s a tie with just over four months to go. With RUT holding up relative to RUI small cap risk, as measured by the CBOE Russell[...]

  • Technical Analysis & Charts | Aug 12, 2015, 3:04 PM

    Strategy: Skip Strike Butterfly Spread

    Strategy: Skip Strike Butterfly Spread

    Let’s look at SPX, IBM and FB to determine which one is the best candidate for a skip strike butterfly. SPX is trading at 2083.56, IBM at 156.32and FB at 95.12. A normal long call butterfly combines a 90-95 bull vertical call spread with a 100-95 bear vertical call spread. Each spread has an equal amount of contracts. The strike price differential is the same for both vertical spreads. A skip strike butterfly combines a 90-95 bull vertical call spread with a 105-95 bear vertical call spread.[...]

  • CBOE Continues to Empower Investors with its Acquisition of Livevol, Inc. Technology

    CBOE Continues to Empower Investors with its Acquisition of Livevol, Inc. Technology

    Today is a fantastic and exciting day for CBOE Holdings and Livevol, Inc., but more importantly for the sophisticated investor community who trade equity and index options.  As you may know, the CBOE announced today that its acquisition of the market data services and trading analytics platforms of Livevol, Inc. has officially closed.  Livevol is the leader and industry authority on equity and index options technology and market data services, which are widely used by both institutional[...]

  • Market News | Technical Analysis & Charts | Aug 7, 2015, 11:49 AM

    Weekly Stock Market Commentary 8.7.15

    Weekly Stock Market Commentary 8.7.15

    The stock market continues to hover in its trading range. Despite some promising buy signals from sentiment extremes in put-call ratios and $VIX, there was no follow-through by the Standard & Poors 500 Index ($SPX). We have often said -- and still maintain -- that price is the most important indicator. Regardless, as long as $SPX remains in the broad 2040-2135 trading range, the chart is neutral. Equity-only put-call ratios gave buy signals a little over a week ago, and they remain strongly on[...]

  • Technical Analysis & Charts | VIX | Trader Talk | Futures | Aug 1, 2015, 10:32 AM

    The Week in Volatility Indexes and ETPs - 7/27 - 7/31

    The Week in Volatility Indexes and ETPs - 7/27 - 7/31

    I was reminded of my advancing age several times this past week. I’ll save those incidents for the other grumpy aging men on my block. One of the benefits (let me believe this) of being around for a while is having lived through a variety of market environments. This market got me thinking about John Gotti who was the boss of the Gambino family back in the day. One of his monikers was “The Teflon Don” as he was put on trial three times and acquitted three times. Teflon is a substance[...]

  • Technical Analysis & Charts | Education | Jul 22, 2015, 1:26 PM

    Options Income Strategies:  Understanding the Technicals

    Options Income Strategies:  Understanding the Technicals

    One of the things I am asked the most about is options income strategies. As a technician, my answer is always the same - you need to have a deep understanding of the technicals and the patience and discipline to analyze the charts. At its core, technical analysis is simply interpreting behavioral patterns on a chart. The goal is to interpret the patterns correctly; if you do, you can expect them to occur again in the future. That's because when it comes to money, human behavior does not change on[...]

  • Market News | Technical Analysis & Charts | Jul 13, 2015, 4:29 PM

    Russell 2000 Risk On/Volatility Off

    Russell 2000 Risk On/Volatility Off

    Today’s market rally including US small-cap stocks is lifting the Russell 2000 to its current level 1264.06 well above its 50 day moving average (1253.67). © 1999-2015 StockCharts.com. All Rights Reserved. Another contributing factor for the Russell 2000 is the net flows of cash leading to the creation of ETFs on the IWM.  ETF.com reports a net flow of $1.158 bln. into IWM for the week of 7/06 – 7/10/15. As a result of the rally, the volatility on the Russell 2000 Index (RVX)[...]

  • Technical Analysis & Charts | VIX | Trader Talk | Trade Ideas | Jul 12, 2015, 3:30 PM

    Psychological Damage Can Be Done to Investors

    Psychological Damage Can Be Done to Investors

    It is not easy to win over investor sentiment.  Anyone who lost money during the financial crisis can tell you how difficult it was to suddenly trust markets again, and there was the 'flash crash' afterwards that suddenly jolted any built up confidence.  For its part, the Fed has done everything they possibly could to bolster investor confidence, the lifeblood to the markets. On record they have succeeded, but many would question the tactics.  Yet six years in to the bull run many[...]

  • VIX Option Trade Into Expiration

    VIX Option Trade Into Expiration

    CBOE and the CBOE Futures exchange plan on launching VIX Weeklys options and futures respectively over the next couple of months. Usually when new markets start trading we have to do a little wait and see with respect to strategies that large traders are implementing. However, with VIX Weeklys we have over 100 expirations since VIX options were launched and we can look to trading in VIX options and futures that have occurred near expiration. With this in mind I did some digging around on the Monday[...]

  • VXX Block Trade from Monday

    VXX Block Trade from Monday

    Monday of this week was one of the more exciting days we have had in 2015. That’s probably an understatement since VIX futures volume was the highest it has been this year. When the S&P 500 is down and volatility is up there are traders always looking to take the other side of the move. Either through selling volatility or through getting long the stock market. The iPath S&P 500 Short Term Futures ETN (VXX) market is one instrument that can move quickly to the upside when the S&P[...]

  • The Fed Has Already Ushered in a New Fed Policy

    The Fed Has Already Ushered in a New Fed Policy

    Fed policy dictates money flows into most markets, including stocks, bonds, commodities and even currencies.  As the leading central banker, the Committee sets policy as it sees fit for the US economy yet we often see other nations' central banks pivot off the Fed.  That often happens at a slower pace as countries are in an 'I'll wait and see how it works' mode.  When the Fed went to a ZIRP (zero interest rate policy) in 2008/09 many other central banks aggressively followed and cut[...]

  • So Far VIX in 2015 Tells a Different Story Than 2014

    So Far VIX in 2015 Tells a Different Story Than 2014

    Over the weekend I was asked to take a look at the first five months of 2015 with respect to the volatility markets. Since volatility indexes need to be looked at in relation to recent history I decided to compare VIX in the first five months of 2015 to VIX last year. Before getting to that comparison, keep in mind the stock market action in early 2014 was very similar to that during the first five months of this year.   In 2014 the S&P 500 was up 4.07% while this year the S&P 500[...]

  • Technical Analysis & Charts | VIX | Trader Talk | Education | Jun 1, 2015, 1:55 PM

    Halfway To A Textbook Recession - Weekly Market Outlook

    Halfway To A Textbook Recession - Weekly Market Outlook

    After three straight weeks of bullish progress, the weight of those gains finally proved to be too much. The prod was a surprisingly weak revised reading on Q1's GDP growth. Rather than growing at a 0.2% clip as first thought, the second (of three) updates on the nation's overall economic activity rolled in at -0.7%. That was enough to send the S&P 500 (SPX) (SPY) down 0.63% on Friday, bringing the weekly loss to 0.87%. And yet, the market has yet to move past the point of no return and start[...]

  • Market News | Technical Analysis & Charts | VIX | May 29, 2015, 1:15 PM

    Weekly Market Commentary 5.29.15

    Weekly Market Commentary 5.29.15

    $SPX remains stalled just below the all-time highs, which are at 2135. The support at 2070 (the lows of March and April) remains in place. Equity-only put-call ratios are technically still on sell signals. But have been drifting sideways for a couple of weeks. Market breadth oscillators gave sell signals prior to Tuesday's market decline. They remain on those sell signals, despite the broad market's attempt to recover. Volatility indices and derivatives are still quite bullish. Yes, they spiked[...]