Our bullish trading activity has been extremely light over the past month or two, and the few positions we were brave enough to put on are a mixed bag.  Mostly our powder is dry on the long side, as we wait for a successful retest of the August panic lows.

Our bearish trading activity using Chaikin sell signals has been incredibly profitable for the last few months.  We sell risk-defined call option spreads, profiting both from the downward direction and the inflated implied volatility that makes selling premium so attractive.    Here's our option performance for the year so far. 

With the new tile view feature, performing a top-down analysis has never been faster or more efficient.  Thanks to these screening tools in Chaikin Analytics, the process is now only seconds a day and wi it's like having a team of fundamental and technical analysts at our beck and call. 

Start with a sector breakdown of the S&P.

Financials (XLF) is a strong underlying sector likely to out-peform the market over a 6 month period when stocks rebound.  The composite power gauge ratings of the underlying stocks imply significant relative strength compared to the broader market.  Now, drill deeper.  Regional Banks (KRE) and Major Banks (KBE) imply industry group strength and top the list of subsectors.   Financials tend to flourish in a rising interest rate environment, one we're likely to encounter over the coming years (though the short run could be a bumpy ride).   Next....

Consistent, repeatable top down analysis not only takes the emotion and guesswork out of the trading process, but thanks to these new features and capabilities, Chaikin Analytics empowers you with a time-efficient edge against other market participants.   With the strongest stocks in the strongest sectors passing stringent technical requirements,  trading signals are practically an afterthought.   You simply supply the rigour and discipline required for consistent, superior returns year in and year out.

Test drive the new Chaikin features for 75% less than a full month subscription cost, with no obligation beyond 30 days.  Details here:

Please note.  This demo is neither trading advice, nor a recommendation.  The information is a few days old at the time of publication.   Use the tools to make your own informed decision.   

This is important because it enables to you to see at a glance what the market is doing analyzed by sector strength or individual stock strength in any of the major indexes. They have also added the major Index ETFs as a drop down so that you can see what the market as a whole is doing.

The market seems ripe for a relief rally this week, whether the Fed finally initiates its long anticipated rate-hike cycle or kicks the can due to uncertainty over a softening global economy and Chinese currency manipulation .  But a quick glance at the Chaikin Analytics derived market conditions offers key clues as to whether any rally would signify a more meaningful resumption of the bull trend.   In my view, any rally is just smoke for the dramatic entrance of The Whipsaws at Vol-A-Palooza 2015.

First, let's rewind a year.  The market and the underlying Chaikin metrics were portending good back half to 2015.  A stock's Power Gauge is a forward looking ( 3-6 months) divining rod for price performance.  In aggregate, lots a lots of bullish Power Gauges mean good things for underlying index.  Sure enough....

we rallied into the end of year.

For today's market conditions, a sea of red has washed away our once green pastures. The past week has marked lowest Power Gauge ratio readings in the 3 years we've been recording them and all of our key technical metrics are bearish.  

We expect volatility to increase leading up to Thursday's Fed rate decision, followed by a strong post announcement knee jerk reaction and perhaps an even stronger and more sustained counter move.  Not investable, but likely tradable.  

Once the Fed interest rate news cycle has passed,  we expect politically motivated threats of government shutdowns and debt ceiling stagnation to inject a new level of fear into the markets.  And on quiet days here in the US,  Chinese currency devaluations and that country's ad hoc approach to financial and economic crisis management will be there to pump up the $VIX.

So what's the game plan?

• Sell rallies and raise cash with Bear Call option spreads on downtrending Bearish rated stocks in weak industry groups.  We'll use Overbought Sell, Money Flow Sell and Relative Strength Sell and Breakdown signals on highly liquid stocks and ETF's.
• We'll very selectively acquire uptrending, Very Bullish stocks in strong sectors and industry groups at half our normal position size.  Money flow must have a preponderance of green in addition to all our regular, strict rules.   Dividend paying stocks, particularly large caps with Very Bullish ratings and a history of raising dividend streams can be a safe pool to fish from.  
• Favor ETF's, which diversify against single company risk, but only the  most liquid products, such as SPDR Sector ETF's.
• With earnings and volatility risks heightend, we'll sell premium  (options) on long holdings whenever possible  For example, covered calls or cash secured naked puts.
• Be prepared when information changes.   If the Fed surprises with easing, for example, we'll have a shopping list of "Risk On" stocks ready to deploy in case of a market melt up.
  

It's funny.  The main point of this site is to help new and future Chaikin Analytics traders find winning bullish directional trades (or develop the confidence to do so by watching our fully transparent daily portfolio management -- we track ALL buys and sells, disclosing winners and losers ).   But as market conditions in 2015 have evolved from choppy to volatile and downright bearish, it's our bearish options portfolio that has become the star of the show.   We have an incredible win rate, well beyond the statistical probabilities (which are high to begin with).   The added directional edge of the Chaikin Analytics' sell signals has allowed us to generate an 80+ percent win rate.  See for yourself!  I cannot emphasize how powerful a directional edge can be when trading options!

Selling call spreads helps us generate  income, lower cost basis and  profit from sideways and down markets--not to mention we can hedge the directional risk of our long stock portfolio..  

We love teaching this strategy.  

• Watch the video to see how we do it.  
• Feel free to get in touch if you'd like a private lesson.   The first hour is FREE and private 1 on 1 with every new paid annual Chaikin subscription purchased after September 1o, 2015 through the Chaikin Power User page.
•  If you want more personal training than the first hour,  I'll do it  for a fair hourly wage, and I won't rip you off.  Most of our clients get it done in 5 hours and spend less than $300 bucks.  
• It's helpful if you know option basics..like puts and calls, so that our time together is about using Chaikin Analytics in spread trading.   The more you know in advance, the more efficient your private lessons will be. 
• Here is where you can get a world class, free education about options trading.  Learn the basic there, then come to us to learn how to apply Chaikin Analytics to spread tradings.   
• .Just please be a Chaikin annual subscriber.  That's a requirement before I can spend one on one  time with you.  My trading partner, AA is also available.  Contact me here.  Subscribe to Chaikin Analytics Here.
• We are not financial advisers, brokers or dealers.  We're not licensed to provide any input about your financial future or input about what securities to trade.  No-one knows which direction the market or a particular security will head, and we're no different.  There's strong evidence that Chaikin Analytics adds a directional edge to trading, and the purpose of private lessons is to learn how to fully exploit that potential edge via best practices, putting the odds in your favor with the Chaikin system and being consistent in any market condition.    We'll use our Portfolio to teach call spread structure, risk management, and trading rules.  You will learn the ins and outs of a very specific options strategy that we've been forward testing  successfully for 2 years.   But, no trading system EVER guarantees success because market conditions change all the time.  Options carry risks that are more complex than stocks.  It's important to understand potential losses before trading for real.   The CBOE is your best bet for risk education and option basics.