MTM Options Trader Newsletter - How to Do Sector Analysis

[image]( [image] This Week in the Market It was a short week of trading but there was a lot of volatility packed into those four days. Stocks gapped lower to open the week but rallied higher the rest of the week as the S&P 500 blew by the 4,000 level and did not look back. Whether this level hold remains to be seen, but shorter- term downtrends were disrupted as the index also closed above its 50-day moving average again. Looking ahead to this week, the 50-day moving average is even more critical for the Dow and Nasdaq as both indexes are trading really close to that MA. Will it be support or resistance at the close of the week? Implied volatility as well as option prices decreased with last week’s rally. After a day off this past week, traders and investors will get a full week of trading this week. There continues to be a lot of chatter about a forthcoming if not current recession and how many so-called experts are predicting the market to drop a fair amount in the near future. As they say, you cannot believe everything you hear, so continue to trade or invest what you see in front of you. There are several economic reports expected this week, including the latest CPI and PPI as well as retail sales figures. Have a healthy, safe and disciplined week! Sep 13: Consumer Price Index Sep 13: Federal Budget Sep 14: Producer Price Index Sep 15: Jobless Claims Sep 15: Retail Sales Sep 15: Import Price Index Sep 15: Business Inventories [Read Our Blog]( How to Do Sector Analysis I’m sometimes asked by a student trader how to do sector analysis in your trading. This is a broad topic and there are many, many different ways to skin this cat. Lately, I’ve been using it in a very specific way. Let’s first talk about sector analysis, meaning how I use it, and then a sector analysis example or two. Sector Analysis Meaning This is simple and straightforward. Market watchers group the stocks (or more accurately, companies) in the stock market into the industry or sector they are in. It’s a way to organize the stock market. And it makes it easier to relate value among similar companies. [Continue Reading ...](=) MTM Watchlist Here are a few trade ideas that we may take a peek at this week in group coaching class: SPY – With the market surging higher, previous resistance has now become potential support. Bull put spreads around the $400 level and possible short iron condors will be considered once again. NVDA – After a pretty big drop over the past several weeks, the stock reversed when the market rallied last week. Potential bull call spreads will be explored with continued upward momentum. GLD – The ETF has rallied a tad but is still lagging behind the market. With the 50-day moving average hanging just overhead, potential bear call spreads around the moving average may be examined. [image]( The strategies in this newsletter are for educational and informative purposes only. All information disclosed in this newsletter should not be considered complete in its entirety. Market Taker Mentoring, Inc. will not be held responsible for changes, oversights, errors or omissions. Dates, prices, news and other information may not be accurate. Please verify all information before trading. You alone are responsible for your own investment decisions. Options involve risk and are not suitable for all investors. Before trading options, please read Characteristics and Risks of Standardized Option (ODD), which can be obtained from your broker; by calling (888) OPTIONS; or from The Options Clearing Corp., 125 S. Franklin St., Suite 1200, Chicago, IL 60606. No statement in this newsletter is intended to be a recommendation or solicitation to buy or sell any security or to provide investment or trading advice. Traders and investors considering options should consult a professional tax advisor as to how taxes may affect the outcome of contemplated options transactions. Copyright Market Taker Mentoring, Inc. 2008 - 2022. All rights reserved. Reproducing or redistributing this content is a violation of federal law. [image] If you do not wish to be contacted via email, you can unsubscribe using this link: [Unsubscribe]( Unsubscribing from email notifications DOES NOT cancel your class, subscription or recurring payments. We recommend that current students do not unsubscribe from email notifications. If you unsubscribe from email notifications, you will not be notified on how to access the classes or subscriptions in which you are enrolled. Market Taker Mentoring, Inc. PO Box 117 Frankfort, Illinois 60423 United States