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OptionPundit specializes in consistent income producing option trading strategies on underlyings ranging from stocks, indices, commodity, currency to niche products. OptionPundit authors a premier option trading blog @OptionPundit (http://www.OptionPundit.com/). OP's research and trading... More
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  • Key Market Internals 0 comments
    May 4, 2012 12:58 PM | about stocks: AAPL, GOOG, SPY, DIA, IWM, QQQ, TVIX

    Markets are pulling back rather sharply today. As of this writing Dow Jones Industrial Average (NYSEARCA:DIA) is down 160 points (1.25%), S&P 500 (NYSEARCA:SPY) is down a little over 1.5% and Russell 2000 (NYSEARCA:IWM) is down 1.7%. Nasdaq (NASDAQ:QQQ) is the hardest hit which is down over 2% as of this writing.

    There are almost 4 declining issues for every advancing issue, all the 30 Dow components are in red. However, based on trading so far, it is still not a 90% down day.

    (click to enlarge)

    (Charts from TDAmeritrade)

    While VIX is up at +8%, Near term volatility index is sharply up at +11%. VIX May futures are up at +6% and June VIX futures are up +3.5%. Wasn't TVIX supposed to reward 2x ? It is up +8% as well. Yesterday's closing indicative value was $5.97.

    Both AAPL and GOOG are down ~$12, based on option trading volumes so far $570 and $600 strikes seems likely for pinning respective but dynamics might change in the next few hrs of trading.

    For Bullish hope to remain alive, S&P500 shouldn't close below 50dma or reclaim it early next week, similar to what AAPL needs to do, else it's going to be tough time ahead. Also for QE3 to materialize, markets needs to pullback.

    Today's close will be one of the most interesting closes in recent weeks.

    Profitable Trading, OP

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