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Technical Signals for Option Trades - 2015 05 19

Updated on May 20, 2015

Tips for staying up to date......

Be sure to "FOLLOW" OptionsDR so that you will be notified of each new post. I try to post technical signals any day they occur (so this could be daily) and provide a market update each week.

Searching for Trade Signals

These are indicators that I track every day for 20 large cap stocks. I have back tested these indicators since January 2010 searching for signals that have a 70% success rate in predicting a 3% stock move within 4 weeks.

Whenever a stock gives a signal for an indicator that has historically given a 70% success rate, it will show up in the UP or DOWN columns under Signal.

These signals are specific to each stock. For example, the stock price crossing above the 50 Day Moving Average for AAPL has a success rate of 70%, but for XOM it is 41%. Therefore, when this occurs for AAPL it will show as a Signal. But when this happens for XOM, it will not show as a SIgnal.

Technicals for 2015 05 19

Terms

Signal: This is the number of technical signals met for this day that have a 70% historical success rate for predicting a 3% move in the stock price within the next 4 weeks.


Trend: This is where the technicals are for 7 Indicators:

Stock Price vs. 20 Day Moving Average

Stock Price vs. 50 Day Moving Average

9 Day RSI above or below 50

14 Day RSI above or below 50

Money Flow for the Day is Positive or Negative

5 Day Total Money Flow for the Day is Positive or Negative

Change in Accumulation/Distribution Calculation is Positive or Negative

Summary

There are 6 trade signals triggered today:

CALL ABC JUN $115 - $2.40

PUT ADSK JUN $57.50 - $2.15

CALL AXP JUN $80 - $2.28

CALL CAT JUN $87.50 - $1.55

PUT CAT JUN $87.50 - $1.81

CALL VRX JUN $230 - $6.30

Now there were conflicting signals for CAT. I have recorded them in order to track, but in this instance you should either avoid this selection, or choose the direction you believe the market is heading. I am more BEARISH on the market, so I would lean towards the PUT in this case.

Deeper Analysis

Signals may conflict with your perceptions of the overall market. During those times, you should be very selective about which options you trade. Waiting for the market and the signals to be in alignment (ie. you predict the market will go up AND the signals are for CALLS) is prudent.

The indexes (S&P and DOW) have been range bound, the DOW closed slightly higher than the previous high and the S&P was down slightly. Volume remains light. Not a lot of conviction to this up move. Based on overall economic data and current earnings reports, my expectations are for a downward move from here. See related article from Seeking Alpha: With The Market At New Highs, Is It Time To Head For The Exit? http://m.seekingalpha.com/article/3193026?source=ansh $SPY, $IBB, $QQQ

ABC: Stock price crossed above the 20 Day Moving Average.

ADSK: 5 Day Money Flow turned negative.

AXP: 5 Day Money Flow turned positive.

GS: 9 Day RSI crossed above the 14 Day RSI.

CAT: 9 Day RSI crossed above the 14 Day RSI and the MACD crossed below 9 Day EMA MACD.

VRX: 9 Day RSI crossed above the 14 Day RSI.

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