(Please enjoy this updated version of my weekly commentary published December 22nd, 2021 from the POWR Options newsletter).
The NASDAQ held the uptrend line that has been in place seemingly forever even after a sharp sell-off to start the week. The QQQs are about as neutral as it gets from a technical perspective. Shares did close back above the 20-day moving average.
Still below the all-time highs but we will see if it challenges the $400 area into year end.
After a tough start to the week along with the markets, VIX has fallen back within the regime of volatility bounded by 16 to the downside and 22 to the upside. It dropped slightly from a week ago. I would expect a further grind lower into year-end towards the lower end of the regime near 16.
Small cap stocks look interesting here on a comparative basis. The Russell 2000 (IWM) once again held major support at the $210 level. Each time they have reached oversold levels on a 9 day RSI, MACD, and Bollinger Percent B basis has marked significant lows in the IWM.
They may be the one of the better performers of 2022 given the big underperformance of the IWM to both the S&P 500 and NASDAQ in 2021.
Our two new additions to the POWR Options portfolio are doing pretty good so far. The one call is up by over 40% since being added on Monday. We may look to book profits on half as it nears resistance at $40.
I will be looking for a new trade or two over the coming days as we look to take advantage of a few new opportunities.
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All the Best!
Tim Biggam
Editor, POWR Options Newsletter
SPY shares were trading at $471.16 per share on Thursday morning, up $3.47 (+0.74%). Year-to-date, SPY has gained 27.70%, versus a % rise in the benchmark S&P 500 index during the same period.
About the Author: Tim Biggam
Tim spent 13 years as Chief Options Strategist at Man Securities in Chicago, 4 years as Lead Options Strategist at ThinkorSwim and 3 years as a Market Maker for First Options in Chicago. He makes regular appearances on Bloomberg TV and is a weekly contributor to the TD Ameritrade Network "Morning Trade Live". His overriding passion is to make the complex world of options more understandable and therefore more useful to the everyday trader. Tim is the editor of the POWR Options newsletter. Learn more about Tim's background, along with links to his most recent articles.
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