Updated Market Analysis for Stock Options Traders

On Tuesday I shared a video from Adam Hewison demonstrating potential concerns in the stock and equities market. This week we have in deed seen some selling.

I am now passing along some new information concerning this selling. When I became aware of these data points, I thought some of you might be interested.

• The broader Indexes (S&P, NYSE, R2000) all show notable buying during the recent 3-4 day pullback. Usually (90% of the time), this analysis method shows selling during price declines. I was quite surprised to see this but that only reinforces my theory that listening intently to CNBC is a great way to become a lemming rather than a leader in this industry. At least when it comes to market direction. Of these indexes, small caps (R2000, IWM) have experienced the least amount of buying.


• Banks (KBE) - selling has increased and is now at the highest level in more than a year.


• Homebuilders (XHB) - selling is still heavy but is only half of levels experienced just a few weeks ago. These comparisons still hint of a bottom but I'd like to see a re-test of recent highs from the last two weeks before I'm more confident.

Keep in mind that if you should not trade on this information unless you first do you own independent research and verify any findings shared here. You might simply consider this information a "suggestion" to look more closely and then draw your own conclusions.

Trade well!

Christopher Smith
TheOptionClub.com