S&P 500 Chart – Getting Tired?

6 Comments

1. Comment by mule65

   Worth adding that small caps have gotten tired too — see link. But, if the dollar keeps tanking the markets and gold should keep on keepin’ on. Nobody seems to care about the greenback even though the MSRP of a loaded 2010 Chevy Tahoe is over $57,000.

2. Comment by IanIan@stock-options-made-easy.com

   Maybe it is also intersting to note for the future outlook, the comments by The Private Conference Board, stating that with the index of leading economic indicators rising for the seventh consecutive month in October, shows that a recovery is “unfolding” in the U.S. economy.

3. Comment by Dave

   This is more a question than a comment..I am nairly new at trading options. I have had my ups and downs making money..I don’t use fancy option strategies..I simply buy and sell puts and calls… My question is this..I bought CME Dec 350 calls last week Tuesday Nov 17th. I paid 2.80 per contract. The stock price at that time was $321.40. The very next day the stock price moved to about 325 and my option moved up about .30 cents. Here I am today Monday Nov. 23rd. CME stock price has jumped and hit a high of 329.90. Yet my DEC 350 call has now fallen to 2.20 ????? Can you explain to me how this can be. The stock price is up nearly $9 from when I bought only a week ago. COuld that much time value have been taken from my option.Just seems immpossible..and how would you have traded something like this Knowing from your tecnical analysis that the price should have been higher. Any comments would greatly be appreciated..

4. Comment by mule65

   Dave, you really think CME is going over $353 by December 18th? The current odds are basically the option premium.

5. Comment by Alex Fotopoulos

   @ Ian and Mule – I think there are a lot of conflicting indicators right now and that’s why you so many passionate screamers in the media screaming with valid arguments for 10% in either direction and that’s why I like to chart. You can find fundamentals to fit either side and then you throw in comments by the Private Conf Board or a Fed official and you get more skittish traders.

   @ Dave – I don’t follow CME enough to give a 100% accurate answer, but what probably happened was a combination of various factors. VIX is down a couple of points from last Tuesday. I’ll bet CME’s own implied volatility for CMELG dropped a lot since then for some unknown (to me) reason. Depending on what time of the day you bought your calls there could’ve been emotion swaying the belief that CME was about to take off. I see on the chart that CME opened up strong in the first part of the day before faltering. If you didn’t use a limit order and just bought at the high ask that could be a part of it. A week can take out a lot of value from an option, especially with the closer month expiring. Starting on 11/4 through 11/18 CME had a good run and I’m sure some short covering had to play a part with the higher option prices. Once the rally took a breather, so did the option prices. Your example shows a good reason I don’t buy options often. You could end up with it working out, but you might want to consider exiting before you lose it all. CME came within 10 cents of it’s 10/26 high and then fell 2%. That’s not a good sign for the chart. I could even see CME down $8 more from here based on the chart, but then again I don’t follow it enough to give reliable advice on it. I’m just looking at the chart.

6. Comment by Alex Fotopoulos

   I posted a CME chart at chart-analysis.com to illustrate my opinion of where it’s going a little better.

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