Technical Signals for Option Trades - 2015 05 26
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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 26
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
There were 5 trade signal triggered today:
PUT CELG JUL $115 - $4.85
PUT FB JUL $80 - $3.10
CALL NFLX JUL $615 - $35.50
PUT NFLX JUL $615 - $34.30
PUT VZ JUL $49 - $0.99
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, and testing the upper limits of the range. The S&P broke above the upper limit and closed above it 4 out of the 5 days last week. However, the S&P never held above the resistance level for 3 straight days. TUESDAYS pull back brought the S&P below the resistance level, meaning the breakout failed.
Volume on TUES was slightly above the 50 Day Moving Average. Still not a lot of conviction for the markets in either direction.
Based on overall economic data and current earnings reports, my expectations are for a downward move from here. At least to the bottom of the trading range.
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
CELG: Stock price crossed below the 50 Day Moving Average and 9 Day RSI crossed below the 14 Day RSI.
FB: Stock price crossed below the 20 Day Moving Average.
NFLX: 9 Day RSI crossed above the 14 Day RSI.
NFLX: MACD crossed below 9 Day EMA MACD
VZ: Stock price crossed below the 50 Day Moving Average.