OPTIONSMART MORNING UPDATE: Sunday Edition
January 31st, 2010 at 8:55 am
|
|
OPTIONSMART MORNING UPDATE: Sunday Edition |
||
|
1. OUTLOOK: Stocks rallied through the morning as the stronger-than-expected GDP report seemed to soothe some of the market's recent worries. Better-than-expected readings on consumer sentiment and manufacturing also gave stocks an initial pop. The stock selloff was fairly broad based, although technology led the way. Intel, Microsoft, IBM, Apple and Hewlett-Packard were among the big decliners. However, QQQQ implied volatility (market fears) remained low. Downside seen limited.
real-time updates and comments! |
|||
|
2. FEAR METER: However, QQQQ implied volatility (market fears) remained low.
About Implied Volatility. Investor fear and greed play a significant role in financial markets. The question is, how can investors measure market sentiment in an emerging market situation? How can they gauge the fear? Volatility is a well-known measure of risk in financial markets. When volatility is low, there is a lack of fear. High volatility, however, suggests a fearful markets. Volatility can be calculated in two ways. Either from historical stock price data or from current option price data. Using the second method results in an implied volatility measure. It is a reflection of fear and greed amongst a wide group of market professionals. It’s not wise to ignore this parameter. |
|||
|
3. WISDOM
NUGGETS: The
stock market is like a beauty contest. Don’t pick the
prettiest girl. Pick the one everyone else thinks
is the
prettiest.
|
|||
|
4. SPECIAL OFFER: n/a |
|||
|
MOST RECENT QQQQ ENHANCED PORTFOLIO TRADE: DIA 100/103 Debit Call Spread: Sold @2.70 on 01/19/2010 with a 11% gain in two weeks! More details about our flagship service... Learn more about our services and special offers!
|
|||
