Recap for Tuesday, December 18th by Kevin Corrigan
Did you miss Tuesday’s TradeKing Midday Market Call? Here’s a quick recap. Don’t miss another session, register
Analysis of S&P 500 and Nasdaq Composite from QuickTakesPro’s Michael Kahn:
S&P 500 (SPX) – At the time of this broadcast, SPX was around 1440.95, up about 10.59 from Monday’s close. The SPX broke down through its trendline going back over a year to last October, but recently the market has been creeping back and now seems to be following just below that old trendline. The trendline still is officially broken on downside, but in the last month and a half there has been a decent rally back towards that it. Just the other day it jumped above one resistance level around 1424 and now it looks like there's a chance it could break through another resistance level at around the 1440 mark, according to Michael.
The Nasdaq chart isn’t quite the same pattern, but it broke through a resistance level of around 3040 and above both its 50 and 200 day moving averages, both around 2990.
Analysis of Volatility Index from TradeKing’s Brian Overby:
S&P 500 Volatility (VIX) - is around 15.77, down about .57. The story hasn’t changed much in the VIX in recent months. It is below the 100 day and 200 day moving averages of about 16.11 and 17.46, respectively.
The VVIX (VIX of the VIX) is also near its yearly lows. VVIX is around 79.99, still well below its 100 day moving average of 89.47.
Brian Overby interprets that this could be indicative that the market is not as concerned about the Fiscal Cliff as the media seems to be.
Stock for the day is Kohl’s Corp (KSS)
Michael Kahn - At the time of this broadcast, KSS was $44.45 up about .26 on the day. It is below its 50 day, 200 day moving averages of around 49.88 and 49.44. The one big thing to look at is the long term support level of 42.70 going back to 2005. This level has seemed to be very important to this stock and could possibly give some protection if the stock were to drop. However, if the upside continues, Michael speculates it might be possible to fill the gap back some.
Technical tools used:
Brian Overby’s strategy based on Michael’s Analysis – Short Put Spread
Since Kohl’s appears to be stabilized from its recent downturn on bad news and earnings concerns, we will look at a neutral to bullish trade. Its implied volatility levels are in the middle of the range. They jumped up on that recent downturn, but are now settling down a bit. The 10 point actual drop in the stock price caused the 30-day historical volatility to jump to around 40%. The 30-day implied level is just above 25%.
Possible Trade - Short Put Spread
- Sell 1 Jan KSS 43 Put
- Buy 1 Jan KSS 41 Put
- 32 days to expiration
- Net Bid .40, Ask .55, Mid .47
- Total net credit is 0.40 if we can get filled at the Bid.
- Maximum potential loss is $1.60
- Maximum potential gain is $0.40
- Total commission to enter this trade is $6.25
Possible Additional Trade - Long Call
- Buy 1 Jan KSS 45 Call
- 32 days to expiration
- Net Bid 1.05, Ask 1.10
- Total debit is 1.10 if we can get filled at the Ask.
- Maximum potential loss is $1.10
- Maximum potential gain is Unlimited if the stock goes to infinity. (Not going to happen)
- Total commission to enter this trade is $5.60
**NOTE: option prices are given as a per contract amount. Multiply loss and gain figures by 100 shares and by the number of contracts traded to determine the amount of the full potential loss or full potential gain. No additional calculations are needed to determine commission costs.
TradeKing Options Tools used:
- Detailed Quote
TradeKing Short Put Spread
TradeKing Long Call
TradeKing Volatility Charts
Get solid market analysis and potential trading ideas. Take 15 minutes of your lunch with our team, as they analyze the market during this live online session. As an added bonus, a stock chart will be covered in detail each session accompanied by a potential option trade. This might be the most valuable thing you do all week! Every Tuesday midday from 12:00 - 12:15pm ET.
Don’t miss the next TradeKing Midday Market Call. Register here:
VP Content and Social Media
At the time of publication and in the preceding month, TradeKing and/or Michael Kahn did not have ownership greater than 1% in any stocks mentioned; did not have any other actual, material conflict of interest known at the time of publication; have not received compensation from a public offering nor from investment banking services related to any companies mentioned within the past 12 months, nor expect to receive any in the next 3 months; nor engaged in market making in the securities mentioned.
Options involve risks and are not suitable for all investors. Prior to buying or selling options, an investor must receive a copy of Characteristics and Risks of Standardized Options, sent to you in previous communication. Additional copies may be obtained by calling TRADEKING at 877-495-KING or by visiting
System response and access times may vary due to market conditions, system performance, and other factors.
Multiple leg options strategies involve
additional risks and multiple commissions
, and may result in complex tax treatments. Please consult a tax advisor.
Any strategies discussed and examples using actual securities and price data are strictly for illustrative and educational purposes only and are not to be construed as an endorsement, recommendation, or solicitation to buy or sell securities. Past performance is not a guarantee of future results. Consider the following when making an investment decision: your financial situation, your risk profile and transaction costs.
Market timing is a complex investment strategy which involves risk and may incur additional commission costs.
While implied volatility represents the consensus of the marketplace as to the future level of stock price volatility, there is no guarantee that this forecast will be correct.
TradeKing charges $4.95 for online equity and option trades, add 65 cents per option contract. TradeKing charges an additional $0.35 per contract on certain index products where the exchange charges fees. See our FAQ for details. TradeKing adds $0.01 per share on the entire order for stocks priced less than $2.00. See our
Commissions + Fees page
for commissions on broker-assisted trades, low-priced stocks, option spreads, and other securities.
The projections or other information generated by TradeKing's tools regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. The calculations do not take into consideration all costs, such as commissions and margin interest which may impact the results shown. It is the user's sole responsibility to select the criteria to enter in the TradeKing's tools, or to choose among the pre-defined screens, and to evaluate the merits and risks associated with the use of the tools before making any investment decisions. TradeKing is not responsible for any losses that occur from such investment decisions.
TradeKing Webinars and All-Star Blogs are provided for educational and informational purposes only. All investments involve risk, losses may exceed the principal invested, and the past performance of a security, industry, sector, market, or financial product does not guarantee future results or returns. TradeKing provides self-directed investors with discount brokerage services, and does not make recommendations or offer investment, financial, legal or tax advice. You alone are responsible for evaluating the merits and risks associated with the use of TradeKing's systems, services or products.
TradeKing selects and defines as All-Stars certain independent market commentators who are recognized industry personalities and experienced traders and who provide timely market commentary via the
TradeKing All-Star Blog
. Each All-Star commentator's bio, related qualifications and disclosure as to their relationship with TradeKing can be found on the
. The selection of All-Star commentators is solely based on the quality and style of the content provided. TradeKing does not measure, endorse, or monitor the performance or correctness of any statement or recommendation made by independent All-Stars commentators. Supporting documentation for any claims made by TradeKing All-Stars will be supplied upon request by the author of the post, who is solely responsible for the views expressed. Contact TradeKing All-Stars by sending an email message to