Happy New Year Friends!! I wish all the readers a very successful, happy, healthy and prosperous new year.
Arguably, 2012 is expected to be an unglamorous year. Here we are. The first trading day of 2012 started with a bang. Dow rallied 1.45% and S&P 1.5%. Leading the pack was NDX which rose 1.90%. Though on the surface it was a very bullish day, based on market internals it was only mildly bullish. Up volume was 79.7% and for every decline there were 3.4 advancing issues. While VIX cash index dropped only -1.87% , VIX Jan futures dropped 7.5% and Feb futures were off by 5.16%. This helped our VIX OPNewsletter portfolio to swing sharply by +10%. Yield rose sharply across the board helping our OPNewsletter TLT portfolio also to gain by almost +10%. Commodity indices were higher too.
Based on Dow’s close yesterday @ 12,397, it’s down only ~500 points from its recovery high since mar’09 lows. You may make a bearish case as well as a bullish case, but at the end of the day, with all the gloom around Euro crisis, etc, markets, as reflected by Dow, aren’t very far off from the high. This shouldn’t be construed that I am bullish about the equities. Neither I am bullish nor I am bearish. I, however, do think that probability of downside is more than for the upside. But which side are markets headed, I don’t know.
So how do I trade the market?
That’s where I am still inclined to options trading. Options allows me to trade whichever direction I want including “non-direction”. I may make money even if I am wrong (but not continue to be wrong). There are many more options than there were at beginning to last year and you can trade pretty much any popular asset. I shall be adding more option trading strategies, more underlying to create more alpha for OPNewsletter as we had into this interesting 2012 where both bears and bulls will be in a continuous fight with each other. In other words, I foresee a good trading year ahead for option traders.
Join now if you would like to reap benefits from another confusing year for the markets. If you don’t want to be directional but still would like to trade the markets to add alpha to your portfolios, OPNewsletter may be the right choice to add to your investment toolbox.
Happy New Year. Happy Trading, OP