MTM Options Newsletter - Using Double Distributions to Identify Trends

This Week in the Market After stocks moved higher early in the week, it appeared the S&P 500 would easily move past its 50-day moving average. It did in fact, although it ran into some bearishness to close out the week. Still, it managed to close above the moving average. Now the question becomes whether the market will continue to move lower as so many have predicted over the past several weeks. Monday's open may set the tone for what market participants are thinking, at least in the near future. If the 50-day moving average holds, stocks may respond by moving higher yet again. If not, the market may look to test the most recent lows from March. Quarterly earnings continue to roll, although many of the big-name tech stocks reported with mixed results last week. Remember to continue to check those earnings dates. On Friday, the market will get to look at April's unemployment numbers before the open. Jobless claims topped 30 million over the past few weeks, so the exact number may be a little less of a surprise. As always, not putting on a trade is a position. If the odds are not on your side, consider doing nothing. Have a safe, healthy and prosperous week!

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Using Double Distributions to Identify Trends To be a good market analyst and trader, you should make it a point to learn intricate details that are illustrated in charts. The study of charts or technical analysis is what most trading systems are built upon. Learning and problem solving are a big part of artificial intelligence (AI). The idea is to get a machine to think and react like a human. Machine-based learning is dependent on pattern recognition and repetitive responses. Think cause and effect. Early pattern recognition is integral for timing entry and exits in stocks and commodities. One pattern that I trust to identify the onset of trend is defined as a double distribution day. I prefer using 30-minute bars to scan markets Continue Reading ... MTM Watchlist Here are several charts we will try to keep an eye on this upcoming volatile week: Here are several levels we will be keeping an eye on in class this week: SPY – How do we not watch this ETF? It is still trading above its 50-day moving average, but that could change in a hurry. Potential vertical debit spreads and time spreads will be looked at. AAPL – After moving higher and lower last week following its earnings announcement, the stock may be stuck in a rut. With IV skews still abundant, calendar spreads will be discussed. NFLX – We looked at call credit spreads, calendar spreads and cash-secured puts on the stock and they all worked out well. Ditto again for this week.

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