Author: The INO.com Team

Bitcoin Enters Long-Term Downtrend

Posted on by The INO.com Team

Hello traders everywhere. Bitcoin has been due for a big move/breakout for a while now after being trapped in a trading range of $8,500 to $7,850 since the end of September. I fully expected the move to be to the downside as pressure was mounting from the 50-day and 200-day moving averages as they got closer and closer to crossing. Last week I had mentioned the coming "death cross," and while we haven't quite got that, we did get a new red monthly Trade Triangle at $7,714.70, signaling entry into the long-term downtrend.

Bitcoin is trading well below its 50-day and 200-day MA, the MACD is close to turning lower, and the MA's are closing in on that death cross. Right now, it appears that bitcoin has found support at the $7,430 level last hit in June of this year. If the 50-day can cross the 200-day look for a big move lower, the previous time the cross happened, Bitcoin rode the long-term downtrend to the $3,100 level.

Key Levels To Watch This Week:

Continue reading "Bitcoin Enters Long-Term Downtrend" →

Options Based Portfolio Outperformance - Keys To Success

Posted on by The INO.com Team

A year-long case study running an options-based portfolio was conducted to demonstrate the effectiveness of this strategy against the traditional stock-picking approach. Options are a great way to manage and mitigate risk while circumventing market swings. Selling options allows you to collect premium income in a high-probability manner while generating consistent income for steady portfolio appreciation regardless of market conditions. Of course, this is all done without predicting which way the market will move since options are a bet on where stocks won’t go, not where they will go.

Primarily sticking with dividend-paying large-cap stocks across a diversity of tickers that are liquid in the options market is a great way to generate superior returns with less volatility over the long term. Over the past 12 months, 298 trades have been made with a win rate of 86% and premium capture of 57% across 69 different tickers. Moreover, when stacked up against the S&P 500, an options strategy generated a return of 6.9% compared to the S&P 500 index, which returned 2.2% over the same period. These returns demonstrate the resilience of this high probability options trading in both bear and bull markets.

This outperformance and high win rate was achieved by following a set of options-based fundamentals. Specifically, position-sizing, sector allocation, maximizing the number of trade occurrences, and risk-defined strategies are some notable areas that traders need to heed for long-term successful options trading.

Essential Options Trading Fundamentals

To effectively and successfully run an options-based portfolio over the long term, the following options trading fundamentals must be exercised in each and every trade. Violating any of these fundamentals will jeopardize this strategy and possibly negate the effectiveness of this approach on the whole. Continue reading "Options Based Portfolio Outperformance - Keys To Success" →

China Weighs On Stock Market

Posted on by The INO.com Team

Hello traders everywhere. China's economic growth sank to its lowest level in almost 30 years as the trade war with Washington deepened a slump that is weighing on the global economy. Growth in the world's second-largest economy slipped to 6% in the three months ending in September, down from the previous quarter's 6.2%, data showed Friday. It was the weakest level since China started reporting data by quarters in 1993.

Last week President Trump agreed to delay a tariff hike on Chinese goods and said Beijing promised to buy up to $50 billion of American farm goods. That announcement brought about an initial burst of enthusiasm, but that soon faded after Beijing failed to confirm the scale of possible purchases, and officials said the two sides still were working out details. The slowdown and weakening consumer demand add to headaches for Chinese leaders as they fight a 15-month-old tariff war with the U.S. that has sapped China's exports.

Stocks traded lower Friday but remained on track to post solid weekly gains after the release of better-than-expected earnings. The Dow traded 100 points lower, while the S&P 500 pulled back -0.32% and the Nasdaq shed -0.8%. The DOW was up +0.5% for the week heading into afternoon trading. The S&P 500 and NASDAQ were up +.80% and +.79%, respectively, for the week. The major indexes will end the week within striking distance of their record highs. Continue reading "China Weighs On Stock Market" →

Friday's Rally Erases October Losses

Posted on by The INO.com Team

Hello traders everywhere. Back in August, I wrote that we seem to "always be one tweet away" from either disaster or prosperity. Well, today we have prosperity after President Trump told reporters on Thursday that talks between the two countries were going "really well." His comments came after he tweeted that he would meet with Chinese Vice Premier Liu He at the White House on Friday. The meeting is scheduled to take place at 2:45 p.m. ET.

That comment and tweet have sent the stock market higher, erasing October's losses. The DOW was up almost 500 pts at one point but has settled around +400 pts up +1.6% on the week. The S&P 500 and NASDAQ followed suit rising +1.6% and +1.9%, respectively.

Bitcoin continues to trade right below its 200-day MA, but it did have a positive week gaining +2.3% trading around the $8,000 level. We are still looking for a move lower, and our key level to watch will be 7,714.70. A move below that level will trigger a red weekly Trade Triangle signaling a long-term downtrend. Continue reading "Friday's Rally Erases October Losses" →

6.9% Options Portfolio Return vs. 2.2% S&P 500 Return

Posted on by The INO.com Team

Over the past 12 months, I’ve managed an options-based portfolio and demonstrated how this approach can offer a superior alternative to traditional stock picking. An options-based approach is very similar to running your portfolio like a business where you manage risk and take profits. Alternatively, an options-based approach is much like an insurance company. You sell as many policies as possible to collect as much premium income as possible with a premium cost level that maximizes a statistical edge to your benefit.

An option-based strategy mitigates risk and circumvents drastic market moves. Selling options and collecting premium income in a high-probability manner generates consistent income for steady portfolio appreciation in bear and bull market conditions. This is all done without predicting which way the market will move. Sticking with dividend-paying large-cap stocks across a diversity of tickers that are liquid in the options market is a great way to generate superior returns with less volatility over the long term.

Over the past 12 months, 298 trades have been made with a win rate of 86% and a premium capture of 57% across 69 different tickers. When stacked up against the S&P 500, the options strategy generated a return of 6.9% compared to the S&P 500 index, which returned 2.2% over the same period. Options are a bet on where stocks won’t go, not where they will go, where high probability options trading thrives in both bear and bull markets.

Options Trading
Figure 1 – Basic principles and building blocks of an options-based portfolio
Continue reading "6.9% Options Portfolio Return vs. 2.2% S&P 500 Return" →