June 26, 2014

High Noon and the Game of Duck, Duck, Goose – Again!

For the past two sessions at exactly 12 noon EDT the market has been hit with a series of large buy baskets and each day it has driven the markets from being down to up.  It is now getting to be more of a bad case of déjà vu that just seems to repeat itself day after day.  Not that I care but once in a while the trader in me does try to figure out what is driving the markets.  On Wednesday, several other traders questioning what was going on joined me.  We all searched the news wires and looked around the ‘titans’ to see if some large options orders were executed and nobody that I heard came up with the who, what, where or why.  Makes you wonder who is intervening on behalf of the bulls and for what reason.

CandleChart_line_graphNonetheless, the futures continue to provide ample trading opportunities as volumes continue to swell.  That is a good sign, but I will add that who ever is propping up the market is spending a great deal of cash to do it.  Being a day trader though, using a solid algorithm that generates accurate signals keeps me hoping from the NQ and ES to treasuries, and a few commodities.  The $NQ_F though remains my primary instrument.  On Thursday it was whippy to say the least.  After opening higher, the markets yielded to some strong selling that once again took prices from session highs to session lows within the first 30 minutes of trade.  Serious choppy action came next with it appearing that the buyers were ready to push everything back up only to be met by a solid wall of selling resistance.  To be honest it was good to see, that is until traders started heading out for lunch.  That is when the buyer(s) executed what still seems like a planned attack.

Friday is the last options expiration in June.  Add to the mix the end of the 2nd quarter, which is on Monday but I suspect the mark up more commonly known as ‘window dressing’ will being tomorrow.  I took a look around the options of the NDX titans to get a feel of where traders may like to ‘pin’ prices.  I check volume against open interest and here is what I came up with as of the close on Thursday.

AAPL looks like it will be between 90 and 91, with the 90 calls trading 37,550 contracts against an open interest of 21,270.. The 91 calls traded, 27,000 contracts against an open interest of 24,500.  The 90 puts traded 27,300 contracts against an open interest of 21,000.

amazonlogo2AMZN looks like it will settle somewhere between 325 and 330.  The 325 and 330 both traded twice the open interest on Thursday.

facebook2FB continues to get goosed higher and by Thursday’s options volume in the calls it looks fairly solid to close between 67 and 68.

NFLX widened the range a bit on Thursday with the puts aiming between 435 and 440, while the calls suggest 440 to 445.  This could produce a solid intraday range in NFLX for those looking to trade.

TSLA looks committed to 235 to 240 with both the calls and the puts putting in solid volume.  The 240 calls traded 9,925 contracts versus an open interest of 4,630.  While the 235 puts traded 7,865 contracts on Thursday versus an open interest of 2,435.

TWTR has been a tear higher recently and Thursday saw a strong move with the 40 calls trading 11,800 contracts versus an open interest of 5,550.  The 41 calls traded 10,765 contracts versus an open interest of 2,285 and the 42 calls traded 11,930 versus an open interest of 839.  Should be an interesting day in TWTR.

Over in the SPY is was an active day – the June weeklys saw a volume expansion in both the calls and puts centered around the 196 calls (145,750 contracts versus and open interest of 106,110) and the 195 puts where 158, 910 contracts trades versus an open interest of 102,750.

qqqThe QQQ should be held to a tighter range if today’s action has anything to say – the 92.50 puts traded 25,000 contracts versus 22,000 open interest, the 93 puts traded 24,000 contracts versus 17,000 open interest.  The 93 calls traded 15,665 contracts versus 11,800 open interest.  I suspect the QQQ’s will be held between 92.50 to 93 for expiration.


Steer the course and don’t compare yourself to everyone else.  You are not they and they are not you.  Remember to trust and believe what makes you unique at this moment in time and in this situation and allow others to choose for themselves.  Don’t be swallowed up by the chaos and false emotions swirling around.  Remember it’s just a number.

opportunityTrading the number remains key to being able to reduce and separate the “noise” from opportunity.  This takes knowing and executing a well-defined strategy and allows you to see opportunities amongst the “chaos” and by trusting the mechanics of your strategy, be able to take advantage of them.

Opportunity continues to knock on our doors.  While it doesn’t come without risk, risk can be defined and more manageable. Volatility and broad moves are exactly what a day trader desires and being able to respond without questioning is a luxury many are unaware of.