Trader's Corner
02:50:16 PM EDT | 03/12/2010
Day by Day, Step by Step
By Linda Piazza | Routines are important for options traders. Come look over my shoulder as I show you how I set up for my trading day, starting the afternoon before when I examine open trades.

Trader's Corner
10:00:50 PM EDT | 03/11/2010
Evaluating Trends That Are No Longer Friends
By Leigh Stevens | If 'the trend is our friend', trendlines can be our best friend in evaluating the growing risk of a reversal. Trendline analysis is also enhanced with a couple of key indicators.

Trader's Corner
06:41:48 PM EDT | 03/05/2010
Legging In
By Linda Piazza | Along my often-repeated theme, there's no absolutely best way to enter a trade composed of several legs. Legging in or entering all at once each has pros and cons.

Trader's Corner
05:10:48 PM EDT | 02/26/2010
DOOM Spreads
By Linda Piazza | A CBOE white paper focuses on an option strategy to help protect equity positions against calamitous losses. An accompanying Options 101 article discusses the theory and this Trader's Corner shows how such a strategy might perform.

Trader's Corner
08:17:44 PM EDT | 02/25/2010
Bottoms Up Analysis, Pt.2
By Leigh Stevens | Continuing on from last week with my 'bottoms up' approach for gauging where the market is headed by looking at ALL 30 Dow stocks, I was asked how many Dow stocks continue to trade above their up trendlines dating from last March. Contrary to a bullish short-term outlook last week, the intermediate to long-term chart patterns remain bearish for 22 of the 30 Dow stocks.

Trader's Corner
02:45:25 PM EDT | 02/19/2010
Projecting Potential Price Targets Using Nested Keltner Channels
By Linda Piazza | This article further explains how I use this technical analysis tool to project potential price targets.

Trader's Corner
09:52:08 PM EDT | 02/18/2010
Bottoms Up Analysis
By Leigh Stevens | When you are unsure if the market is breaking out (to the upside), breaking down, or neutral (predominately sideways), one effective way to confirm this is to study all the stocks that comprise a major index. The one that this is mostly feasible for is the Dow 30 (INDU).

Trader's Corner
04:02:17 PM EDT | 02/12/2010
No Right or Wrong
By Linda Piazza | Sorry, you fellow rule-followers out there, but there's no absolute right or wrong way to trade options.

Trader's Corner
10:06:08 PM EDT | 02/11/2010
Types of Correction Patterns
By Leigh Stevens | There are 3 types of corrective patterns that run counter to the dominant trend as identified by RN Elliott (of Elliott 'wave' fame) and I can't dispute his take on it. Elliott also talked about the 'Rule of Alternation' as an important principle of analyzing the markets.

Trader's Corner
02:39:35 PM EDT | 02/05/2010
Lessons from the Trenches
By Linda Piazza | This week has provided some challenges for traders, and the lessons learned from the trenches may come in handy.

Trader's Corner
09:30:09 PM EDT | 02/04/2010
Q & A and More on 3-part A-B-C Corrections
By Leigh Stevens | In my last TC article (1/28), I was anticipating how we might see a complex correction develop with another large decline to come after a limited rebound. Today's sharp downswing looks like the start of the weak second down leg in my forecast.

Trader's Corner
06:56:27 PM EDT | 01/29/2010
Sorting through the Technical Analysis Toolbox
By Linda Piazza | Lately I've been hanging around with traders who use few technical analysis tools. I use fewer than I did in the past, but I still value the guidance they provide.

Trader's Corner
09:07:00 PM EDT | 01/28/2010
Mind Your A-B-C's
By Leigh Stevens | Naturally traders are looking at the question of how low this current pullback is likely to go. To me it's a question of whether it will be a single leg down or be a more prolonged and common, a-b-c correction.

Trader's Corner
05:30:06 PM EDT | 01/22/2010
Freak Out: Assignment and Exercise Worries
By Linda Piazza | Most option traders imagine that being assigned stock is a more traumatic event than it usually is.

Trader's Corner
08:16:54 PM EDT | 01/21/2010
Reversal Patterns
By Leigh Stevens | There are a number of different classes of reversal type patterns described in charting/technical analysis, including the recently completed bearish rising wedge. Unlike some of the other 'classes', this formation doesn't usually suggest more than an intermediate pullback.

Trader's Corner
01:11:27 PM EDT | 01/15/2010
The Times, They Are A'Changing
By Linda Piazza | Caution! At some clearing houses and the brokerages that use them, margining rules are reverting back to old interpretations rather than the industry standards most recently used.

Trader's Corner
10:16:12 PM EDT | 01/14/2010
Getting Complacent in your Market Viewpoint
By Leigh Stevens | I had a quick-as-a-flash shift in my complacently bullish chart perceptions when I realized that I was looking at, but not really 'seeing', an evolving bearish chart pattern. A rising Wedge pattern could be warning of a correction ahead.

Trader's Corner
01:11:40 PM EDT | 01/08/2010
OEX versus XEO: The Debate Continues
By Linda Piazza | Could a possible early exercise risk exist for the American-style cash-settled OEX options, even if extrinsic value remains?

Trader's Corner
09:01:32 PM EDT | 01/01/2010
Best-Laid Plans
By Linda Piazza | Last week's article discussed trading plans and yearly goals. Realities such as market conditions, slippage and emotional factors require additional safeguards if those goals are to be met.

Trader's Corner
05:53:30 PM EDT | 12/31/2009
Technical Highlights of 2009
By Leigh Stevens | Some of the 2009 technical analysis highlights that stand out for 2009 include where we are now technically with the major market indexes, the formation of the key March bottom and the winning sub-indexes.

Trader's Corner
05:50:55 PM EDT | 12/25/2009
Planning Trading Goals
By Linda Piazza | It's the right time of year to formulate next year's trading goals.

Trader's Corner
04:04:45 PM EDT | 12/24/2009
Anatomy of a Trend
By Leigh Stevens | A resolution of the multiweek sideways trend has occurred with the decisive upside breakout above resistance, especially led by the Nasdaq. The S&P 500 (SPX) has followed suit and for a change SPX is following, not leading.

Trader's Corner
04:00:34 PM EDT | 12/18/2009
The Coulda-Woulda-Shoulda's
By Linda Piazza | Suffering the coulda-woulda-shoulda's is part of the trading life. No one is immune, but suffering these coulda-woulda-shoulda's is better than not following a trading plan.

Trader's Corner
10:29:58 PM EDT | 12/17/2009
Rectangle top possibilities
By Leigh Stevens | With rectangle patterns, the top variety in stocks and indexes is more common than rectangle bottoms. Since this is true, but prices haven't yet pierced the rectangle's lower trendline, what else might be suggesting a next down leg ahead?

Trader's Corner
10:30:14 PM EDT | 12/15/2009
Could go up, could go down
By Leigh Stevens | The biggest analyst/expert cop out ever is that the market 'could go up, could go down'. However, there are some technical patterns that suggest an up OR down resolution if certain conditions prevail.

Trader's Corner
02:50:49 PM EDT | 12/11/2009
Scenes to Scenarios
By Linda Piazza | Follow my efforts as I spent a Sunday evening a couple of weeks ago writing a scenario for what might happen the next day, a scenario meant to help plan my trading day. We'll test the scenario against what actually happened the next day and see if the exercise might have proven helpful.

Trader's Corner
02:59:50 PM EDT | 12/04/2009
Responding to a Challenge, Part 2
By Linda Piazza | A couple of weeks ago, I responded to a challenge or invitation to overlay the VIX and VXN on a single chart and see what resulted. This article continues the discussion started two weeks ago.

Trader's Corner
10:21:03 PM EDT | 11/30/2009
Island Reversals and Volume Climaxes
By Leigh Stevens | These two topics are both related in the sense that they are patterns that both suggest a reversal of the dominant trend. I'll say a little more on daily trading volume than just relating to 'climax' volume surges.

Trader's Corner
07:10:34 PM EDT | 11/27/2009
Transaction Tax Rears Its Ugly Head Again
By Linda Piazza | Jim Brown mentioned this week that talk of the transaction tax had resurfaced, with the tax perhaps to be attached to a jobs bill. By now, Jim Brown may also have addressed the issue in his Wrap, but I wanted to present the information here, too, as its impact on active options traders could be deleterious.

Trader's Corner
11:22:51 AM EDT | 11/25/2009
Probabilities
By Leigh Stevens | It's all a game of gauging probabilities in trading in my experience. What are the probabilities of a further move favoring my position versus the risk that the trend I'm riding (even if sideways) will peter out or reverse on me and how to evaluate this equation?

Trader's Corner
02:54:36 PM EDT | 11/20/2009
Comparing the VIX and VXN
By Linda Piazza | I was challenged to overlay the volatility indices, the VIX and VXN, on a single chart and then see what resulted. I took up the challenge.

Trader's Corner
08:55:00 PM EDT | 11/19/2009
Technical (Analysis) 'Riffs'
By Leigh Stevens | A 'riff' is a "melodic phrase, often constantly repeated, forming an accompaniment or part of an accompaniment for a soloist". I picked up on something Linda Piazza said in her last (11/13) Trader's Corner about Fibonacci retracements, after she picked up on something I said in an earlier piece so it could be said that we're riffing on each other.

Trader's Corner
03:05:36 PM EDT | 11/13/2009
How I Use Technical Analysis
By Linda Piazza | I hear a lot of debate these days about whether technical analysis works. Certainly, as markets marched higher after August's bearish price/RSI divergence, markets defied most predictions of most technical analysts. Should we throw out technical analysis?

Trader's Corner
08:55:54 PM EDT | 11/12/2009
Timing Is Everything
By Leigh Stevens | Old cliche but true about getting in at or near the point where corrections end and the principal trend resumes. This is especially true for options traders as right timing, before a reversal is obvious, can mean a MUCH better entry price.

Trader's Corner
06:42:47 PM EDT | 11/06/2009
What's the Buying-Power Effect?
By Linda Piazza | I had been calculating the buying-power effect for a trade for years, so I was startled when a new brokerage showed a different number than I had expected.

Trader's Corner
05:35:08 PM EDT | 10/30/2009
Yes, You Can Go Broke Taking a Profit!
By Linda Piazza | You've certainly heard someone say, "You can't go broke taking a profit." Maybe you can. Risk of ruin suggests you can if you take profits too early.

Trader's Corner
08:35:50 PM EDT | 10/29/2009
3 and 5-point Pivot methods
By Leigh Stevens | Continuing on with the concept of various Pivot point methods of estimating technical support or resistance, it's usually enough to project a single support or single resistance level above a central 'pivot' and which make for the 3 'points'. This method is rightly called a 3-point pivot calculation, rather than 5-point method which calculates a second lower support and a second higher resistance.

Trader's Corner
06:26:20 PM EDT | 10/23/2009
Quickstepping Deltas
By Linda Piazza | Choosing the right option for your preferred strategy requires knowing a little about how delta changes.

Trader's Corner
09:34:57 PM EDT | 10/22/2009
Pivot Points
By Leigh Stevens | In the trading and investing world, you hear support and resistance levels talked about frequently but not always about how the source is determining these levels. One way that is popular, especially among short-term traders is the 'pivot point' method.

Trader's Corner
05:45:42 PM EDT | 10/16/2009
Just Look What You've Done!
By Linda Piazza | The actions of retail and institutional option traders create a volatility skew that may be a smile or a smirk.

Trader's Corner
08:08:58 PM EDT | 10/15/2009
Finding 'resistance' at new highs
By Leigh Stevens | Once a stock or the major indexes moves to a new high for a move, there's no prior high to look at as possible resistance, at least not in the recent past. When prices have traced out an uptrend price channel there is at least one way of projecting possible upside resistance.

Trader's Corner
06:35:41 PM EDT | 10/09/2009
Possible Mathematical Values for the VIX
By Linda Piazza | We don't know where the VIX will go at any one time, but where is it possible that it can go? What are the possible mathematical highs and lows for the VIX?

Trader's Corner
08:46:43 PM EDT | 10/08/2009
Overbought/Oversold Indicators: MACD
By Leigh Stevens | One type of technical indicator is of the 'trend following' type such as moving averages. Another indicator type are ones that measure price momentum and also are used to suggest points where the stock or index being measured is 'overbought' or 'oversold'; the MACD indicator is the last of these that I'm reviewing.

Trader's Corner
09:02:53 AM EDT | 10/03/2009
The TRIN, Volume Patterns and Phoenix Stocks
By Linda Piazza | Studying the actual volume patterns over recent weeks and months turns up some important clues for traders.

Trader's Corner
07:40:41 AM EDT | 09/26/2009
Making Choices
By Linda Piazza | Options traders sometimes find themselves in a situation in which they have many choices but no clear right or wrong choice.

Trader's Corner
08:07:12 AM EDT | 09/24/2009
Overbought/Oversold Indicators: Stochastics
By Leigh Stevens | One 'type' of technical indicator is of the 'trend following' type such as moving averages. Another indicator type are ones that measure price momentum or rate of change and also are used to suggest points where the stock or index being measured is 'overbought' or 'oversold' and the Stochastic indicator is one of these.

Trader's Corner
04:25:26 PM EDT | 09/20/2009
Concepts of overbought and oversold
By Leigh Stevens | The Relative Strength Index or RSI indicator is showing an 'overbought' extreme in the major indexes and these periods tend to be when corrections happen. However, in a strong bull market, it's hard to know just when this will occur and pullbacks are less likely to be deep and prolonged.

Trader's Corner
09:12:19 AM EDT | 09/19/2009
Calculating Risk on Spreads
By Linda Piazza | Not too long ago, a subscriber wrote asking how I had calculated the risk or buying-power effect on spreads. I thought the topic might be of interest to others who might be new to spreads of various types.

Trader's Corner
02:57:58 PM EDT | 09/12/2009
When Big Money Wants Markets Held Up
By Linda Piazza | Retail traders should learn to recognize big money's footprints

Trader's Corner
08:26:26 PM EDT | 09/10/2009
Trading 'Systems' (Part 3)
By Leigh Stevens | In this last article on 'systems trading' I'll go deeper into how some different types of trading systems are devised. A recent real world test or two similar trading systems will also be revisited.

Trader's Corner
01:55:28 PM EDT | 09/04/2009
What's Ted Up to These Days?
By Linda Piazza | What is the TED spread telling us these days?

Trader's Corner
08:29:23 PM EDT | 09/01/2009
Trading 'Systems' (Part 2)
By Leigh Stevens | I started an article on this topic in my last week's Trader's Corner by working on a promising trading 'system' applied to the Nasdaq 100 index. I got different 'signals', 1 'long' in calls versus 1 'short' in puts, when I optimized results with QQQQ versus the underlying NDX index; looks like the result I liked best (short, in puts) is winning here.

Trader's Corner
08:29:23 PM EDT | 09/01/2009
Trading 'Systems' (Part 2)
By Leigh Stevens | I started an article on this topic in my last week's Trader's Corner by working on a promising trading 'system' applied to the Nasdaq 100 index. I got different 'signals', 1 'long' in calls versus 1 'short' in puts, when I optimized results with QQQQ versus the underlying NDX index; looks like the result I liked best (short, in puts) is winning here.

Trader's Corner
02:54:01 PM EDT | 08/28/2009
Linear Regression Channels
By Linda Piazza | Linear regression channels are a simple tool for discovering whether there's a trend and how long it has been in place. They help a chartist discern where support or resistance might lie as long as that trend stays in place. Furthermore, they help the trader determine when that trend ends.

Trader's Corner
08:14:24 PM EDT | 08/27/2009
Trading 'Systems' (Part 1)
By Leigh Stevens | Occasionally, when I have what I think is a good technical indicator with settings that I've found useful as an input to making trading decisions, I'll go further and back test that indicator. How 'good' an indicator or set of trading rules are relates to the gains (profit) generated over a sustained period of time.

Trader's Corner
02:34:03 PM EDT | 08/21/2009
It's That Time of Day
By Linda Piazza | Market-on-close orders are visible to institutional traders and market makers about twenty minutes before the close. Although we retail traders don't see those orders without prohibitively expensive subscriptions, it's important that we prepare for the time when those orders will hit, perhaps changing the tenor of the day's trading.

Trader's Corner
10:00:10 PM EDT | 08/20/2009
Pattern recognition, 'time' corrections and the KISS principle
By Leigh Stevens | I saw an online comment that was disdainful of those who suggest the market may be 'overbought' and that traders may be 'too' bullish for the current realities. I've been bullish for some time for also try to not get too swept up in the herd's emotions.

Trader's Corner
09:15:55 PM EDT | 08/18/2009
Pattern Recognition
By Leigh Stevens | In answer to a question from an OIN Subscriber about how to recognize 'patterns' that suggest, for example the recent top if it is one, even an interim one. There are a number of considerations that go into what is loosely called 'pattern recognition'.

Trader's Corner
04:44:32 PM EDT | 08/15/2009
What's Up with the TRIN?
By Linda Piazza | While TRIN should not be considered a market-timing tool nor a trade signal, it certainly can help traders pinpoint what's going on underneath the markets. Traders can then make appropriate plans.

Trader's Corner
04:18:40 PM EDT | 08/07/2009
Market Action as Traders Return from Lunch
By Linda Piazza | Big-money and institutional traders test the waters when they return from lunch, sending prices up or down to see if buying or selling results. Be careful always to remain aware that what you're watching is a test and wait for the result of that test before you put too much money on the line.

Trader's Corner
09:21:27 AM EDT | 07/31/2009
What Is This Chart Pointing Out?
By Linda Piazza | Point-and-figure charts provide a quick overview of the action, concentrating on the trend and not volume or time.

Trader's Corner
08:16:03 PM EDT | 07/30/2009
Program Trading and Index Arbitrage
By Leigh Stevens | It's extremely rare for me to not have charts and indicator patterns to write about, but this column is information for just the mind without the usual visual chart and indicator pictures. However, this subject, short of a picture of someone pushing buttons, doesn't lend itself to most charting capabilities.

Trader's Corner
04:45:54 PM EDT | 07/24/2009
Light a Candle
By Linda Piazza | When choosing among the many chart types your charting platform might offer, consider readability as one of the factors in your decision.

Trader's Corner
07:41:51 PM EDT | 07/23/2009
Breakout update and my 'Sentiment' indicator
By Leigh Stevens | Yes, the Dow is over 9000 today (surprise!?) but such strong bullish action was predicted already when the there was a breakout above the top end of a multimonth and well-defined S&P trading range. This breakout also gave an idea of at least a minimum objective for a next move.

Trader's Corner
00:28:07 PM EDT | 07/17/2009
Yes, You Do Believe in Technical Analysis
By Linda Piazza | Some options traders employ technical analysis. Some eschew using indicators, moving averages or chart formations in favor of studying standard deviations and the Greeks of options. As far as I'm concerned, it's all technical analysis.

Trader's Corner
07:31:36 PM EDT | 07/16/2009
Pattern resolutions
By Leigh Stevens | There were differing chart patterns traced out over recent weeks with one S&P pattern suggested further weakness ahead but only if certain support levels got pierced. The other, and it is the 'winner' here, suggested that the S&P was holding the low end of a well-defined trading range.

Trader's Corner
08:08:05 PM EDT | 07/09/2009
When patterns are many
By Leigh Stevens | Sometimes the market has only one chart pattern; for example its trending up or down at a certain rate or there's a sideways trend with prices swinging between established highs and lows. At other times one index is tracing out one pattern with other major indexes in slightly or even quite different patterns.

Trader's Corner
11:51:04 PM EDT | 07/02/2009
Let the CBOE Do the Work for You
By Linda Piazza | In 2000, the CBOE began work on indices that tracked the performance of certain options strategies such as the buy-write and collaring strategies. If you're interested in studying such strategies, let the CBOE do the work for you in these indices that track performance over long periods of time.

Trader's Corner
08:16:38 PM EDT | 07/02/2009
Thinking Outside the Box
By Leigh Stevens | Figuratively and literally in trading it's important to 'think outside the box'. By literally I mean actually to be aware of moves above or below the rectangle chart patterns that sometimes form.

Trader's Corner
03:11:33 PM EDT | 06/26/2009
Art and Science
By Linda Piazza | We would all like to have a cut-and-dried method of trading with ironclad rules we could follow to profitability. That's not the way of the trading world. It's our responsibility as traders to accept that it's not.

Trader's Corner
08:10:35 PM EDT | 06/23/2009
Rectangle Tops
By Leigh Stevens | A trader friend of mine asked me what chart patterns are the most pronounced here and he mentioned the recent sideways move followed by a pullback. That's part of it and the overall formations I notice the most are rectangle top patterns.

Trader's Corner
Saturday, June 20, 2009 3:56:23 PM
Volume and Topping Markets
By Linda Piazza | Too often, volume considerations are left out or misunderstood when traders look for clues to next market direction.

Saturday, June 13, 2009
Trader's Corner
Divergent Opinions on Divergence
By Linda Piazza | Lately, I've again noticed a lot of divergent opinions on divergence.

Thursday, June 11, 2009
Trader's Corner
Evaluating A Sideways 'Trendless' Period
By Leigh Stevens | There is no conclusive technical analysis tool or technique that will predict how a sideways trend will resolve itself but there are useful rules of thumb here. More often then indicating a top, a lateral move suggests a consolidation only of the trend that preceded the sideways move.

Saturday, June 06, 2009
Trader's Corner
Talk About Town, Part Two
By Linda Piazza | Last week's Trader's Corner article discussed the TED spread and its recent dip to retest previous long-term resistance. This article will add other signs we should watch to gauge current market tenor.

Thursday, June 04, 2009
Trader's Corner
The On Balance Volume (OBV) Indicator
By Leigh Stevens | The On Balance Volume or 'OBV' indicator is something useful to keep with your stock charts. This indicator will occasionally alert you to 'accumulation' or 'distribution' of a stock a bit ahead of where you will see obvious upside or downside chart reversals.

Saturday, May 30, 2009
Trader's Corner
Talk About Town
By Linda Piazza | In September, 2008, the TED spread became the talk of the town when it rocketed to record highs. The last couple of weeks, it's been drawing attention again, but for a different reason.

Thursday, May 28, 2009
Trader's Corner
Trading Like a Pro and Pattern Projections
By Leigh Stevens | On the OIN Subscriber query I got about my key Street 'mentor', a professional trader, I'd thought that my expanded comments might be of general interest regarding the 'wisdom' of following others advice.

Saturday, May 23, 2009
Trader's Corner
My CLE
By Linda Piazza | What are your trading goals? Have you reset them lately? Did the market action over the last couple of years teach you that you, like me, needed to reallocate your trading skills?

Thursday, May 21, 2009
Trader's Corner
Revisiting downside and upside market projections
By Leigh Stevens | From a common unfolding of corrections that are in turn followed by a new up leg, the major indexes may well break below recent lows and then after that go substantially higher than seen so far. This ties in to the two 'classic' wave patterns involved.

Saturday, May 16, 2009
Trader's Corner
Let's Visualize It
By Linda Piazza | Leigh Stevens and I have written about methods traders might use to determine support and resistance levels, with Leigh's excellent work identifying support and resistance also available in his text on technical analysis. Not too long ago, a subscriber wrote to ask if I knew of a site that would automatically place support and resistance levels on charts.

Thursday, May 14, 2009
Trader's Corner
Fibonacci (Percentage) Retracements
By Leigh Stevens | The origins of one of the most useful 'retracement' theories for stocks, stock indexes and other markets came from someone who lived in the middle ages. Leonardo Fibonacci was an Italian mathematician who was doing mathematical work in the early 1200's!

Saturday, May 9, 2009
Trader's Corner
Yield Curve
By Linda Piazza | In John Mauldin's May 1, 2009 Weekly E-Letter, he reminded readers that in both 2000 and 2006, he had warned readers of coming recessions, advising them "that it was time to get out of the market, as the stock market drops an average of 43 percent during a recession." What was Mauldin's basis for the warning?

Thursday, May 7, 2009
Trader's Corner
Moving Averages "Envelopes"
By Leigh Stevens | I wrote my Trader's Corner article last week on the subject of using moving averages in options trading, with a focus on the use of certain key averages as suggesting chart support/resistance areas.

Sunday, May 3, 2009
Trader's Corner
Fanning the Flames
By Linda Piazza | From time to time, I return to a market principle that helps me determine where the markets might be in a trend and when that trend might end. If you've read my articles for any stretch of time, you already may know what principle I'm going to discuss: the corrective fan principle.

Thursday, April 30, 2009
Trader's Corner
Moving Averages: types, use and 'length'
By Leigh Stevens | Moving averages are only or usually only an 'aid' to determining if the recent trend remains intact or whether the trend may have reversed. They are also very useful frequently in identifying areas of support or resistance.

Friday, April 24, 2009
Trader's Corner
Putting All Your Eggs in One Basket
By Linda Piazza | In a recent Steve Lentz webinar for the CBOE, Lentz commented that if you have only one strategy in your arsenal, then there are times you shouldn't be trading. No one strategy can be right for all times. Don't put all your eggs in one basket when trading options.

Thursday, April 23, 2009
Trader's Corner
Chart Gaps: From Beginning to 'End' (of Trends)
By Leigh Stevens | Price 'gaps' that occur between one day's trading and the next can tell traders who know what to look for quite a bit about where we are in a trend. Like all cyclical phenomena trends have a beginning middle and end and different types of chart gaps appear in each stage.

Friday, April 17, 2009
Trader's Corner
Am I Seeing What I Wanted to See?
By Linda Piazza | In a March 13 Trader's Corner article, I outlined the three developments I wanted to see before I believed that the rally that was underway was anything more than a bear-market rally. It's time to check on those three developments and see if I'm seeing what I wanted to see.

Thursday, April 16, 2009
Trader's Corner
Chart Gaps: Trend beginnings & 'continuations'
By Leigh Stevens | A price gap is formed when any traded item has a low that is the above the prior days high, an upside gap, or when a stock or index high is below the previous day’s low, creating a downside gap.

Friday, April 10, 2009
Trader's Corner
Where's the Stop?
By Linda Piazza | Unfortunately, we haven't been in the kind of market lately where we always have trendline-plus-moving-average or chart-formation guidelines as to where our stops should be placed. Nice, simple and clean trendlines often don't exist.

Wednesday, April 8, 2009
Trader's Corner
Practical 'Wave' analysis: Conclusion, Part 4
By Leigh Stevens | In my concluding article in my series on Elliott Wave analysis of market trends, I'll finish on how wave theory has some different ways of defining long-term price trends, how to use wave analysis along with OTHER technical analysis tools and also describe general characteristics of the different component waves or stages of trends.

Friday, April 3, 2009
Trader's Corner
An Easy Exit Strategy
By Linda Piazza | When is a profitable trade working on borrowed time? Charles LeBeau offers a suggested "exit on strength" for profitable trades.

Tuesday, March 31, 2009
Trader's Corner
Practical 'Wave' analysis for profit; Part 3
By Leigh Stevens | Elliott wave basics suggest that a bull market trend breaks down into 3 advancing impulse waves, with 2 intervening counter-trend corrections and labeled 1-5. Bear market trends are 3-part affairs: a decline, a rebound and another, usually longer, decline and are labeled abc/ABC; that's the EASY part!

Friday, March 27, 2009
Trader's Corner
Repairing a Loss in a Stock Position
By Linda Piazza | An options tactic known as the stock-repair strategy can help traders recoup losses if a moderate bounce is expected. Moreover, the stock-repair strategy does this without increasing risk or incurring much, if any, additional cost.

Thursday, March 26, 2009
Trader's Corner
Practical 'Wave' analysis for profit; Part 2
By Leigh Stevens | The Elliott wave principle is better known today than it ever was in R.N. Elliott’s lifetime. Which is not to say that Elliott didn’t attract significant notice among some important market advisers and professional money managers due to some amazingly prescient market predictions.

Friday, March 20, 2009
Trader's Corner
Take a Vacation
By Linda Piazza | We traders have had some relief from the dire news this week, but we are in danger of being swept along by a tide of gloom and doom. Such gloom and doom impacts our trading in concrete ways.

Thursday, March 19, 2009
Trader's Corner
Practical 'Wave' analysis for profit; Part 1
By Leigh Stevens | I'm going to bite the bullet and write a bit about Elliott Wave patterns and theory. There aren't many technical topics that does more to cause the average trader and investor's eyes to glaze over than to go into an extensive (Elliott) wave pattern analysis for a stock or index.

Friday, March 13, 2009
Trader's Corner
What I Want to See
By Linda Piazza | All week, I have been thinking about what I'd like to see before I give credence to any rally's sustainability.

Thursday, March 12, 2009
Trader's Corner
Technical Check List for Reversals
By Leigh Stevens | There is a kind of check list or weighting I give to possible reversals and price patterns weigh the most, followed by whether extremes occurred in my 'sentiment' indicator and whether extremes have occurred in the 13-day Relative Strength Index (RSI). The weighting is something like giving a 5 to price (patterns) and 2.5 each to Sentiment and RSI, equaling at most a perfect 10.

Friday, March 6, 2009
Trader's Corner
Forward to the Past
By Linda Piazza | Instead of going "Back to the Future," we're going forward to the past in this article. In the period going forward, why should we pay particular attention to what happened the week of October 6, 2008?

Friday, February 27, 2009
Trader's Corner
Following Up Last Week's Article with Another Study
By Linda Piazza | Another study on the best type of collars for hedging reinforces the one discussed in last week's article.

Thursday, February 26, 2009
Trader's Corner
Option Volume Indicators in Trading Decisions
By Leigh Stevens | Market 'sentiment' is an important technical indicator, especially to alert us to a possible future trend reversals. There's been a movement toward using an equities only model and I've been talking about this for years, from the time I was Technical Analyst at UBS.

Tuesday, February 24, 2009
Trader's Corner
From Extreme to Extreme
By Leigh Stevens | The major market indexes tend to go from 'extreme' to 'extreme' in terms of certain key indicators, the Relative Strength Index (RSI) being one of them. How you use them is to adopt bullish strategies on trendline breakouts AFTER a low RSI extreme and adopt bearish strategies after a HIGH reading that's considered 'extreme'.

Friday, February 20, 2009
Trader's Corner
What Could Go Wrong?
By Linda Piazza | What could go wrong that will ruin our style of options trades, forcing us to change tactics? Let's take a Chicken-Little look at volume of options trades that may itself be all wrong.

Monday, February 16, 2009
Trader's Corner
Rectangle bottom chart patterns
By Leigh Stevens | Happy President's Day to those who have it off and the same to those that don't. I'm using this off Market day to look at my charts and to explore any patterns that might suggest where the heck the Market is headed next.

Friday, February 13, 2009
Trader's Corner
Somewhere over the Rainbow
By Linda Piazza | If you are a buy-and-holder or if tax or other considerations force you to be, it's time to start deciding you'll protect your accounts and lock in some of the gains that might be produced by a strong rally that's waiting somewhere over the rainbow.

Friday, February 6, 2009
Trader's Corner
Position Greeks
By Linda Piazza | Some options traders might not have thought of how the Greeks of option's pricing apply to a combination trade or even to their own portfolios. Position Greeks tell traders how a combination trade or their total portfolios will function when prices changes, time passes or volatility fluctuates.

Thursday, February 5, 2009
Trader's Corner
My Sentiment Indicator
By Leigh Stevens | I haven't written about my sentiment indicator for some time and I'll briefly go over it as it's a key one for me. I especially look for the occasional 'extremes' in the market, where investors and traders take stocks further up or down than is warranted by a current and/or future outlook.

Sunday, February 1, 2009
Trader's Corner
Superbowl of Indicators
By Leigh Stevens | The two Dow averages now have both made new closing weekly lows for the current decline dating from last summer, but the original Dow Theory sell 'signal' for this current bear market goes back much further. The Averages are 'confirming' each other however.

Friday, January 30, 2009
Trader's Corner
Following Up: Feeling Disorganized?
By Linda Piazza | On Saturday, November 11, 2008, I wrote an article titled "Feeling Disorganized?" for the Trader's Corner column. It's time to check up on the conclusions reached in that article.

Friday, January 23, 2009
Trader's Corner
Selling Two-Month Spreads Versus One-Month Spreads
By Linda Piazza | In an excerpt from his newest book, Trading Options as a Professional, James Bittman says "that under certain circumstances, selling a two-month option, covering it one month before expiration, and then selling the next two-month option can bring in more time premium than selling one-month options every month." My experiences lead me to agree.

Thursday, January 22, 2009
Trader's Corner
More on Trendlines
By Leigh Stevens | There are rules of drawing trendlines such as I give in detail in my (Essential Technical Analysis) book, but there I had a lot of pages to give basic step by step construction instructions. It is a bit of an art to know how to re-draw trendlines as trading goes on but here goes on a condensed primer.

Friday, January 16, 2009
Trader's Corner
Collinearity
By Linda Piazza | While it's not necessary for all options traders to be mathematicians, it is necessary that they reach back into their memory banks and think about one concept: collinearity.

Thursday, January 15, 2009
Trader's Corner
Trendlines are your 'best friend'
By Leigh Stevens | You know the old saying that 'the trend is your friend'? Well, trendlines are your BEST friend!

Friday, January 9, 2009
Trader's Corner
The VIX's New Normal Range
By Linda Piazza | My November 21 Trader's Corner article introduced the idea that the VIX might establish a new normal range. It's time for an update.

Friday, January 2, 2009
Trader's Corner
Exploring Adjustment and Exit Strategies for High-Probability Credit Spreads and Iron Condors: Part 4
By Linda Piazza | This article concludes a four-part series listing ideas for adjustment and exit strategies for high-probability credit spreads and iron condors.

Trader's Corner Classics Here

Earlier articles: 2005 | 2006 | 2007 | 2008