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Jeff Pierce
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I’m a swing trader of momentum stocks with a holding period of anywhere from a few hours to a few months. I run a number of screens to locate the strongest/weakest stocks out there, using technical analysis to determine my entries and exits. Trying to calculate the intrinsic value of stocks in... More
My company:
tradewithZEN
My blog:
zentrader.ca
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  • Time To Lock In Those Tax Profits

    By Jeff Pierce

    Quick look at just how overbought HRB really is right now.

    With earnings coming up on March 6th, this is looking like a great time to book those profits.

    hrb

    HRB2

    View from the trees

    hrb3

    Feb 20 10:19 PM | Link | Comment!
  • Financial Astrology: Mercury Retrograde Coming

    By Astrology Traders

    mrMercury will move retrograde at 19 degrees Pisces on February 23rd and then direct on March 17th. We have a stellium (4 or more planets in the same sign) with Neptune, Mars. Venus, Mercury and the Sun all in Pisces during the retrograde. The stellium creates an obsessive quality and in Pisces it can be opportunistic corporate/financial growth or like the Piranha fish where powerful elite corporate groups act with a voracious appetite to gobble up certain sectors, the outcome could be monopolies. The overall theme of 'greed' will most likely be evident and at an accelerated pace than what we have seen since 2009.

    During the Mercury retrograde I will advise caution while executing trades so as not to make an error in executing the trade or acting on impulse. The influence of Mercury can be somewhat like a thief with a bit of myrrh and a twinkle in his eye. Opportunities presented may appear perfect however there could be a bitter pill to swallow later as some unknown or hidden element turns out to be unfavorable. It is wise not to sign a binding contract or start a new venture during the retrograde period. The same is true for a company with a public offering during the retrograde period. The theme here would not be favorable for IPO's. The influence is not all negative and can be used as an opportune time to get additional facts and do important financial planning. Also pay attention to health and don't delay dental appointments.

    We are most likely moving into a very prosperous growth cycle in the economy despite the media's attempt to illustrate otherwise, or create fear that we are not. The scan of numerous charts (technicals) shows an overwhelming overbought condition in many stocks. This is part of the reason traders are finding the market difficult to trade. The buy signals are not getting triggered and the risk to reward setups are not easy to find. The gossip on the street is-something is off with the current bullish cycle- according to Rick Santelli last week on CNBC. In my view the disconnect is due to the manipulation. Last year we saw a significant pullback May 3rd that fell into place exactly as we predicted with the astrology and the technicals. There should have been a similar pullback beginning near July 31st, while Pluto was retrograde.

    The following is from this weekend's premium update by Astrology Traders which uses astrology to forecast events in the financial markets. Jeff Pierce adds in the technical picture for the stocks and sectors in focus.

    Astrology Traders provides specific dates and in-depth analysis of future events for the financial markets through weekly updates, trade alerts, and educational webinars. We now provide a free 2 week trial and you are not charged until after the 2 weeks are up so you can sample risk-FREE.

    Feb 20 10:16 PM | Link | Comment!
  • Option Strategy Indices Explained

    By Christopher Ebert

    Reader Question:

    I have seen reference to several option strategy indices on this site (LSSI. LCMPI, CCNPI). Can you direct me to where I can find more information on these indices (index structure, historical record, etc).

    Answer:

    The three option indices were created right here on zentrader and each is updated here weekly.

    They were originally designed as a tool to determine the best times to open certain types of trades, such as covered calls or naked puts (e.g. The Covered Call/Naked Put Index - CCNPI). But it quickly became evident that in addition to revealing the best time to open a covered call or naked put, the CCNPI was a very effective indicator of future market behavior.

    Compilation of each index requires some complex calculations, but the concept of each is rather simple. For example, the CCNPI measures the performance of a covered call that was opened 112 days ago, with a strike price that was exactly at-the-money, and which expired this past week.

    Say the S&P500 was trading at 1500 and a covered call was opened at a premium of $75 and a strike price of 1500. Assuming that the option was sold 112 days ago and expired this past week, it would have experienced its maximum possible profit of $75 because the S&P was trading at a level higher than the strike price. The $75 profit would represent a 5% gain over the original 1500 level of the S&P. In that scenario, the CCNPI for this past week would have been +5%.

    Of course it is not possible to trade options on the S&P itself, and that is part of the reason for the complexity behind the calculations. But the process for compiling each index is as simple as the above example.

    The historical record is currently limited to 2 years of past performance of each option index, and is published as a chart each week when each index is updated here on zentrader. However, a longer-term historical record would make for an interesting study, so I will look into compiling such a record sometime in the near future. Thanks for the idea!

    If you are interested in an historical record of the option index updates, enter "options" or "CCNPI" etc. in the search box at the top of this page, then click the magnifying glass.

    The preceding is a post by Christopher Ebert, who uses his engineering background to mix and match options as a means of preserving portfolio wealth while outpacing inflation. He studies options daily, trades options almost exclusively, and enjoys sharing his experiences. He recently co-published the book "Show Me Your Options!"

    Feb 20 3:59 AM | Link | Comment!
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