Jack Walker | TalkMarkets | Page 2
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Market Stabilization And A Rate Cut In China
Markets stabilized yesterday and paused ahead of expiration tomorrow. Media reported yesterday that Chinese banks cut their deposit rates for the first time since 2015
Another Bounce
For the S&P 500 Index, last week's pivot right after Labor Day increased the probability of another bear market bounce similar to the one that ended on August 16.
Banks Outperform
Looking at Financials in more detail, the sector is down around 14% on the year but still shows a 37.5% gain over the past 5 years.
Weakness Abounds
Like air slowly leaking out of the valuation balloon it's been mostly down to the right for the S&P 500 Index since failing to overcome resistance from the 200-Day Moving Average on August 16.
Bull Bounce Over
For now equity markets apparently got the message and accept that interest rates are likely to continue rising although the bulls see opportunity in the pullback, the bear have the advantage.
Market Makers Prepare For Large Moves In PTON And DOCU
Equity indices moved higher yesterday as trader’s attention remains on Powell’s speech on Friday morning.
Term Structures Steepen, Looking At GS
Looking at the term structure of GS, we can see that for the next months, option market makers are pretty confident that the stock will remain in a low volatility regime.
Head & Shoulders Bottom V2
Although lopsided and right skewed, using the Head & Shoulders Bottom pattern produces an upside objective at 4563 determined by the distance from the head to the neckline added to the breakout above the neckline.
Expecting Capitulation
Paying less attention to media reporting accompanied with a lot of doomsday chatter but more on the messages from the markets suggests potential bottoms occurred in both equity and fixed income between June 13 and June 16.
Bull Spreads In BA And Bear Spreads In VZ
Verizon Communications​​​​​​​ remained weak yesterday losing around 2.9%. The name was one of the more resilient ones in the first half of the year but has seen some weakness of late.
Scanning For Opportunities
Markets stabilized yesterday. Implied volatilities were steady on the day with the front-end remarking slightly higher while the back-end was unchanged.
Market Update - Bottom Signs
Although not unanimous, some indicators typically seen at market bottoms now show early signs of excessive selling pressure.
Interest Rate Bounce
The interest rate of the 10-Year U.S. Treasury Note declined 4 basis points to the end of last week at 2.78%.
Recession Chatter Begins
After making a new intraday low on Friday at 3810.32, SPX made a remarkable reversal late in the day to close slightly higher.
Contrarian Signs
The S&P 500 Index as well as other widely followed equity indices could be in the process of forming bottoming patterns, perhaps even Head & Shoulder Bottoms if they stay above previous lows.
Technical Tales
Last week the S&P 500 Index came close to activating a large Head & Shoulders Top pattern with a measuring objective down in bear market territory.
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