Using ETFs To "Time" The Market

Posted on by Matt Thalman

Most legitimate market participants will tell you not to try and ‘time’ the market. What they mean by that is don’t try and predict when the market is going to fall and when the market is going to climb higher. Historically, this has been extremely difficult to predict with any real accuracy, but ETFs could make it easier for you to accomplish.

So, most advisors tell clients to stay invested in the markets and ride the ups and downs. I fully agree with this thinking because it is very difficult to predict major market moves. For example, while some people did predict the market would crash in March, not so many thought it would tear right back higher as quickly as it did. Even those who did predict the move higher had a hard time predicting wh the bottom of the fall was and when the actual bottom was and, therefore, the absolute ‘best’ time to get back in.

The biggest problem with trying to time the market is that you will miss part of the moves back higher. And knowing when the right time to get back in is more difficult than just riding it out the wave up and down.

Think about it this way. If you sell ABC stock at $100 because you think the market is about to crash. And let’s say that you were right about the market falling. When do you repurchase ABC? Continue reading "Using ETFs To "Time" The Market" →

Gold & Silver: "Buy Rumors, Sell Facts"?

Posted on by Aibek Burabayev

When there is something turbulent happening in the world, investors buy the dollar as a safe haven. However, when there is uncertainty in the United States itself, as we have been observing recently with the situation around the 2020 election, money shifts to a universal shelter to precious metals such as gold and silver.

One should be careful these days, as we need to remember the old trading wisdom, which says buy rumors, sell facts. The Results of this election finally came out, catching traders out of access to the market on the weekend. This could be a good lesson to keep away during such a major event such as this US presidential election as volatility spikes dramatically as well as investors' emotions, and only a deep "pocket" could survive then.

Gold Chart

Gold was up and down with huge moves in both directions last week. It finished the period on the upbeat, as investors were puzzled with uncertainty over election results. The move-up was strong as the price quickly broke $1900 and gained $84 from $1876 to $1960 at the top. Some profit-taking then followed as the week ended lower at $1952. Continue reading "Gold & Silver: "Buy Rumors, Sell Facts"?" →

Will Orange Juice Futures Feel The Squeeze?

Posted on by Mike Seery

Orange Juice Futures

Orange juice futures in the January contract settled last Friday in New York at 114.35 while currently trading at 111.75, up slightly for the week looking to break out to the upside in my opinion soon. If you take a look at the daily chart, the downtrend line remains intact. However, that is in major jeopardy of being broken in next week's trade.

I will be recommending a possible bullish position if prices break the October 13th high of 118.75 while then placing the stop loss under the spike bottom and contract low, which was touched on October 21st at 107.35 as the risk is around $1,700 per contract plus slippage and commission.

Juice prices are now trading above their 20-day but still below their 100-day moving average as the agricultural sector is starting to look strong. I'm bullish on most commodities and equities at this time, and I think we will finish 2020 on a very strong note.

Orange juice is starting to enter the extremely volatile winter season where a frost can crush the orange juice crop in Florida as the volatility is extremely low. That situation will not last much longer, so play this to the upside as the downside is very limited, as I will not take a short position.

TREND: MIXED
CHART STRUCTURE: EXCELLENT
VOLATILITY: AVERAGE

Silver Futures

Silver futures in the December contract settled last Friday in New York at 23.64 an ounce while currently trading at 25.45 up about $1.90 as prices are near a 7 week high. Continue reading "Will Orange Juice Futures Feel The Squeeze?" →

Options: Positive Returns Despite Volatility

Posted on by The INO.com Team

Despite the major averages being in correction territory in September followed by a volatile October, ending with a massive sell-off and heightened election volatility during the first week of November, realized gains were generated. Following the 10 rules in options trading throughout the recent market volatility has generated positive returns in all three market scenarios.

Defining risk, leveraging a minimal amount of capital, and maximizing returns is the core of options trading. All of this, combined with a statistical edge, provides smooth and consistent portfolio appreciation without guessing which way the market will move. The results over the course of September, October, and the first week of November demonstrate the durability and resiliency of options trading as a means to drive portfolio results.

An agile options based portfolio is essential to navigate these pockets of volatility. The recent September correction, October nosedive, and election volatility are prime examples of why following the 10 rules of options trading is key to an effective long term options strategy. Overall, in May, June, July, August, September, October, October, and thus far in November, 149 trades were placed and closed. An options win rate of 97% was achieved with an average ROI per trade of 7.5% and an overall option premium capture of 88% while outperforming the broader market despite the September correction (Figures 1 and 2).

Options

Figure 1 – Overall option metrics from May 2020 – November 6th, 2020
Continue reading "Options: Positive Returns Despite Volatility" →

Best Election Week In Decades For S&P 500

Posted on by The INO.com Team

By gaining an impressive +7.1% for the week, the S&P 500 will post its best election week gain since 1932, where it gained +11.6% when Franklin D. Roosevelt defeated President Hoover in 1932. Not to be outdone, the DOW will also post a weekly gain of +7%, and the NASDAQ will lead the pack with a gain of +8.8%. But even with these gains, all three indexes have yet to trigger new green weekly Trade Triangles signaling a move back to long-term long positions.

Will Friday's pause lead to a sell-off net week, or does the stock market move higher from here?

As the election results continue to drag out, the dollar came under attack, going -1.7% on the week, triggering a new red weekly Trade Triangle indicating that a move to a long-term downtrend could be gaining strength. That move in the dollar proved to be a positive catalyst for gold, which posted its best weekly gain since July of 2019, posting a gain of +4%. Continue reading "Best Election Week In Decades For S&P 500" →