Friday, January 10, 2014

How to Trade the Market's Most Powerful Index: The Volatility Index VIX

All serious investors should know how to trade the VIX.

While most investors are scrambling to figure out whether the market is headed up or down, I use the VIX both as means of protection and a source of profit.

As a an options trader and market maker this was an indicator I checked several times a day and made adjustments to positions accordingly.

Eventually I helped develop the first VIX instruments available to traders and investors.
This indicator has been a crucial part of my success as a trader because the VIX not only gives you an idea of how uneasy people are about the markets... it tells you whether or not the markets have reached an extreme level of sentiment - either bullish or bearish.  (more)

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Martin Armstrong – Is The Government Using Bitcoin To Get You To Give Up Your Cash?

from Financial Survival Network
Martin Armstrong joined us today to give us his take on the emerging financial scene for 2014. First, he believes that governments around the globe are using Bitcoin and other electronic currencies to get you to give up your paper currencies. That way they’ll be able to better track every transaction you enter into. Next, he stands by his prediction of much higher stock prices ahead. He believes that waning confidence in government is a trend that is picking up steam and is irreversible. Look for major muni defaults in Germany and the US. Many other gems in this timely interview.
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TWTR Enters Bear Market

It would seems Reuben Kressel nailed it. The retail investor perfectly top-ticked his 500-share sell order on 12/27 and since Twitter shares have tumbled 25% - with plenty of volatility in between. As the world waits breathlessly for the firm’s first earnings call later this month, it seems ‘taking profits’ is the new norm as firm after firm shifts their buy-buy-buy reccomendations to ‘hold’ or ‘sell’.
Have no fear as Evercore’s Ken Sean ($70 Target), CRT’s Neil Doshi ($65), and RBC’s Mark Mahaney ($60) are still there for the bulls to rely on…
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Ixia provides converged Internet protocol (IP) network validation and network visibility solutions in the United States and internationally. The company’s solutions are used to design, verify, and monitor a range of Ethernet, Wi-Fi, and 3G/long-term evolution equipment and networks. It offers hardware platforms, such as chassis; interface cards, which generate, receive, and analyze various traffic types at multiple network layers; and Net Tool Optimizer, a hardware appliance that provides network visibility into physical and virtual networks, and optimizes monitoring tool performance. The company also provides a suite of software applications tools for video testing, voice testing, intelligent network testing, conformance testing, security testing, application testing, router testing, switch testing, wireless testing, Wi-Fi testing, broadband testing, and automated testing requirements.
Please take a look at the 1-year chart of XXIA (Ixia) below with my added notations:
1-year chart of XXIA (Ixia)
XXIA obviously hasn’t done well this year. The stock has fallen from a peak of $22 in March down to a low of $12 in December. The two most common price levels on this stock along the way have been $16 (blue) and $14 (red). Each of those prices has been both support and resistances multiple times. Now, the stock has found its most recent low at $12 (green). So, the stock commonly finds the increments of $2 important.

The Tale of the Tape: XXIA is currently trading between $12 and $14. A long trade could be made on a pullback to $12 or on a break back above $14. Short trades look better on this stock at this point though, so a short trade on a rally to $14 or on a break below $12 would make good sense too.
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Bonds Bid & Stocks Skid Ahead Of Payrolls / by Tyler Durden
Another day or ‘spot the difference’ between AUDJPY and the S&P 500 saw an odd overnight spike in stocks fade soon after the US open, bounce higher (again) at the European close then oscillate around VWAP (with the ever-ready-to-please 330 RAMP). Stocks remain red for the year and still the worst start since 2008. “Most Shorted” names continue to outperform. Copper and WTI crude were notable underperformers (both ending an oddly similar -1.75% on the week so far) with oil rebounding modestly off 8-month lows into the close. VIX and credit markets were quiet – ending practically unch ahead of tomorrow’s NFP. CAD weakness continues (-2% on the week) but the USD leaked lower to unch on the week. Treasuries rallied 2-3bps (and the curve flattened very modestly) with 2Y unch and 10Y -3bps.
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Chart of the Day - Athersys (ATHX)

The Chart of the Day is Athersys  (ATHX).  I found the stock by using Barchart to sort today's New High List for frequency in the last month, eliminated the stocks that didn't have a gain in the last week and month and then used the Flipchart feature to review the charts.  Since the Trend Spotter signaled a buy on 12/17 the stock soared 194.69%.

It is a biopharmaceutical company engaged in the discovery and development of therapeutic product candidates designed to extend and enhance the quality of human life. The company's lead product candidate, ATHX-105, is an oral, selective 5HT2c receptor agonist in Phase I clinical trials for the treatment of obesity. The company is also developing other orally active pharmaceutical product candidates for the treatment of metabolic and central nervous system disorders, utilizing proprietary technologies, including Random Activation of Gene Expression (RAGE). Athersys is developing MultiStem(r), its patented, adult-derived ``off the shelf'' stem cell product platform, for multiple disease indications, including damage caused by myocardial infarction, bone marrow transplantation/oncology support, ischemic stroke and other indications.

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