Author Archives: Giorgio Ferrero

Market Opinion:  The S&P500 has support at $1300 but how much longer can this last?  I expected Tuesday to be the last day of a dead cat bounce rally from the sell-offs last week.  However, if we can rally today on some strong volume I will be inclined to think we trend sideways for the summer instead of moving another leg lower.  If the S&P does break 1300 with conviction then I would expect secondary support lines at $1250 and $1200.

Continue reading “Option Spread Portfolio – Trading McDonald’s Into June’15th” »

Market Opinion:  The S&P500 had an interesting closed yesterday rallying in the final 10minutes.  The remainder of this week will show whether the or not the recent rally is a dead cat bounce in the S&P.  As for individuals stocks I’m looking to take advantage of premium on CME Group (CME) in the 230/220 June bull put spread.  I’m still interested in a Microsoft (MSFT) bull put spread at the 26/25 level for June…but we can only invest in the position if the stock falls further…  I’m still interested in Caterpillar (CAT) my estimated max low for the stock on Jun’15 is $93.32 which is basically where the stock is trading now.  For now besides my interest in opening a position in CME, we may open a new bull put spread in Direct TV (DTV) today.

Continue reading “Option Spread Portfolio – Looking for Low Volatility? Try Direct TV!” »

Market Opinion: The SPDR S&P500 ETF (SPY) lost -4.33% last week causing the McClellan oscillator to fall below 100 for the first time since late November.  Technically, both the SPY and the SPDR Dow Jones Industrial Average (DIA) look destined to reach their 200 SMA’s at $127 and $121.  For Monday however, we may get a bounce from oversold levels since Sunday futures are already in the green.  If the market increases a large amount this week I’ll look to sell call spreads since I cannot see the overall uptrend to resume for the next month. 

Continue reading “Option Spread Portfolio – CME Group and Microsoft…Good Values In A Market Decline?” »

Market Opinion: As investors sit back and watch what’s going to happen to Greece and Europe the market remains shaky.  Yesterday’s was disappointing with monthly retail sales and CPI reporting short of expectations.  The market does not have a lot to look forward to, it just found out the ‘best of breed’ bank JP Morgan is tangled in a $2billion losing trade, an executive resigning, followed by a possible SEC probe.  Meanwhile debt talks will probably be in the headlines more often as Speaker of the House John Boehner strictly said yesterday that any increases in the debt ceiling must be accompanied by spending cuts.  Investors know by now that politicians on both sides of the Atlantic act slowly in times of crisis and squeeze out every bit of headline drama for political gain.  How will the market react?  With Volatility!  The S&P 500 has now conclusively broken the $1350 level; it now seems only a matter of time until $1300. 

Continue reading “Option Spread Portfolio – How to Trade the CF Industry Sell-Off” »

Market Opinion: It’s nice to see Sunday night futures close to neutral.  The S&P 500 continues to hold the 1350 level; however, I sense a shaky market that is ready to breakdown on any day.  The economic data that could hold us up this week is: German GDP (QoQ and YoY), US Core CPI, Monthly Retail Sales, and Initial Jobless Claims.  If any of these data points can come in above expectations while the others remain in line with expectations then I think we can tread water this week without moving lower.  Technically, I do not like how the 20 SMA has crossed below the 50 SMA on DIA, SPY, QQQ, and IWM.  If we end up moving lower I expect the 200 SMA to be support.  From a VIX perspective we should not be getting worried yet.  The markets expectation of risk (the price of VIX futures for May vs June) is higher next month than this month, thus the VIX remains in contango.  When the VIX is in contango we should not be completely bearish.  I continue to believe the best way to play the anticipation of volatility is with reverse iron condors and bull put spreads on SPDR Gold Shares (GLD) or bear call spreads on Proshares UltraShort Gold (GLL).   

Continue reading “Option Spread Portfolio – Investing in Joy Global and Starwood Hotels for June Expiration” »