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Dear Friend,
This week I would like to share some humorous market definitions.
In case you missed it last week, we are keeping open our offer of the 2012 ebook version of Making 36% for only $2.99. This is your chance to learn everything you need to know about options (ok, maybe almost everything) for a lower price than ever before. Order here and use the code e299. The order form will say that you will receive the 2011 paperback edition but if you use the e299 code, you will receive the 2012 ebook instead. (The revised 2012 paperback edition will be available next week if you would prefer to wait and get the hard copy at the regular price).
Even if you have purchased an earlier edition of my book, you might want to see the new version. Two new important strategies are spelled out for the first time – the 10K STUDD (Short Term Ultra Double Diagonal) and the Calendar Twist (a new approach to placing calendar spreads). Either strategy might change everything you ever thought about trading options.
Terry
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| Option Tip of the Week |
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If the market knocks you down, try laughing instead of crying–
Some Market Definitions:
CEO --Chief Embezzlement Officer.
CFO-- Corporate Fraud Officer.
BULL MARKET -- A random market movement causing an investor to mistake himself for a financial genius.
BEAR MARKET -- A 6 to 18 month period when the kids get no allowance, the wife gets no jewellery, and the husband gets no sex.
VALUE INVESTING -- The art of buying low and selling lower.
P/E RATIO -- The percentage of investors wetting their pants as the market keeps crashing.
STANDARD & POOR -- Your life in a nutshell.
STOCK ANALYST -- Idiot who just downgraded your stock.
STOCK SPLIT -- When your ex-wife and her lawyer split your assets equally between themselves.
FINANCIAL PLANNER -- A guy whose phone has been disconnected.
MARKET CORRECTION -- The day after you buy stocks.
OUT OF THE MONEY -- When your checking account's overdraft hits bottom.
CASH FLOW-- The movement your money makes as it disappears down the toilet.
YAHOO -- What you yell after selling it to some poor sucker for $240 per share.
WINDOWS -- What you jump out of when you're the sucker who bought Yahoo @ $240 per share.
INSTITUTIONAL INVESTOR -- Past year investor who's now locked up in a nuthouse.
PROFIT -- An archaic word no longer in use.
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Any questions? I would love to hear from you by email (terry@terrystips.com), or if you would like to talk to our guy Seth, give him a jingle at 800-803-4595 and either ask him your question(s) or give him your thoughts.
You can see every trade made in 8 actual option portfolios conducted at Terry’s Tips and learn all about the wonderful world of options by subscribing here. Why wait any longer to make this important investment in yourself?
I look forward to having you on board, and to prospering with you.
Terry
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| Andy's Market Report |
June options expiration is behind us and it ended in the bulls favor. The S&P 500 just came off the best week of 2012, only to have another rally this past week of 1.3%. But, that does not mean we can rest on our laurels because now we have what could be the biggest event of the summer upon us – the Greek elections.
European leaders have basically pleaded with Greece to reject the leftist SYRIZA party as the party promises to reject what would certainly be punishing terms from the 130 billion euro bailout offered by the EU.
The bailout will not be renegotiated, warned German Chancellor Angela Merkel, whose country's wealth is vital to shoring up its weaker partners in the bloc.
But many in Greece and beyond state that Greece's lenders are bluffing when they threaten to turn off the funds if Athens reneges on the terms of the bailout - tax hikes, job losses and pay cuts that have helped condemn the country to five years of record-breaking recession.
So, the question is how will the outcome on Sunday affect the U.S. markets? The answer is easy....no one knows.
The only certainty is the gap from 6/6 in the SPDR S&P 500 ETF (SPY) has yet to close. A move back to $129.36 would close the gap.
Moreover, the DOW just pushed above its 50-day moving average. A continuation of that trend has proven positive over the next 6 months, but a failure as seen by an almost immediate push back below the 50-day has been rather volatile for the market.
According to Jason Goepfert of Sentimentrader.com, “when the Dow was lower after it rose above its 50- day moving average, then the next six months were positive 55% of the time”. But the swings ranged from up 22.7% to lower -15.8%. I think we could see much of the same as we enter the summer doldrums. Low- volume allows for widely vacillating markets and that is exactly what we tend to see during the months of July, August and part of September.
As for the short-term direction of the market, most of the major indices are nearing a short-term overbought state. This means that a pullback (1-3 days) is anticipated. Furthermore, the day following options expiration, particularly a triple witching event is historically bearish. However, with the Greece election Sunday I think all of the historical precedents should be tossed aside.
If we do see a push higher at the open Monday I would not be surprised to see an immediate sell-off. Remember, things aren’t so great in the U.S. economy right now. I am amazed how the poor jobs report reported only a few weeks ago has been forgotten.
The best thing you can do right now, stay nimble. Expect volatility and don’t be surprised by a nice “summer doldrums” sell-off. |
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| Overbought/Sold Condition Report |
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Overbought/Oversold as of June 16, 2012
• S&P 500 (SPY) – 69.6 (neutral)
• Dow Jones (DIA) – 67.1 (neutral)
• Russell 2000 (IWM) – 66.2 (neutral)
• NASDAQ 100 (QQQ) – 72.4 (overbought)
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Thank you again for being a part of the Terry's Tips newsletter. If you are interested in signing up as an Insider, visit Terry's Tips today for details.
Sincerely,
Dr. Terry Allen
Terry's Tips
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P.S. For a limited time, you can get the 2012 eBook version of my book Making 36% for only $2.99. Order here and use the Discount Code e299. It may change everything you ever thought about investing.
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