DFS in Rest Mode After a Breakaway GapDFS had a tightly compacted consolidation, indicative of large-lot pre-swing activity. The stock gapped over the previous high’s resistance easily. It is now in a resting mode again. The stock now has support from the previous highs.
Activity
DXY Dollar Index - Basing ActivityDXY Dollar Index
We were looking for DXY to show signs of bottoming prior to
potential reversal to the upside last week. It made a double
bottom/slightly higher low showing a loss of downside
momentum, the first signal needed to show a change is in the
air. Some may remember the way that Gold shifted parallels
just as DXY is now doing prior it bottoming out in mid
December...now we have the same behaviour being displayed
on DXY chart. Today, DXY is now pushing the upper parallel
with near term resistance at 89.30 - it's in a small
continuation pattern running under the parallel which at some
point soon is likely to pop to the upside - but so far we have
no great weight of evidence that DXY is doing much other
than consolidating in a 120 pip range at current levels. We do
have a double bottom which has resulted in range trading so
far, but no higher high to signal a clear reversal as yet. Dollar
bulls have to take DXY through the parallel and then above
the lines of resistance at 89.30 and at 89.51 and finally above
89.65 to really start attracting other buyers - but until they
can achieve this DXY is more likely to range trade, with some
big green candles more likely to emerge now than big reds,
and the price action after that green candle being more gentle
consolidation prior to the next green candle emerging. So
small bursts of upward pressure followed by mild but longer
lasting consolidation - dull, grinding price action in near term
but most likely with an upward bias. Still prefer to buy dips
here though not aggressively so yet.
Need to see 89.65 broken above and held to turn aggressively
bullish of DXY looking for 90.19 initially and then, after
consolidating, to 90.99 and then to the 91.80-91-90 range.
On the downside, DXY has to break below key support at
88.43 to turn negative again in near term down to 87.70
where it becomes a buy again on any such weakness.
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macd crossed down
relative strength weak
cci and percent r in bottom range
looks unlikely fed raising interest rates
below 200 on weekly
Trader Takes a Bullish Bet in SWK into Earnings tomorrow AMStanley Black & Decker, Inc. provides power and hand tools, mechanical access solutions, and electronic security and monitoring systems for various industrial applications. . SWK is currently trading around $82.20 in a 52 week range of $73.77-$92.76. The company’s stock has been over performing the market this year with shares rallying year to date. Options traders seem to think that this trend will continue as order flow in XYZ has been decidedly /bullish during today’s trading session. Earlier today a trader bought 2400 SWK May 82.5 Calls for $2.05 . This is an extremely bullish order and involves this trader laying out $492,000 in total premium. One sentence summary of the chart and the cloud. With this order flow and this chart set up I believe XYZ is setting up well for a long.
Unusual Option Activity:
We define unusual option activity as large block trades that represent a large percentage of daily option volume. The block trade is considered “unusual” if the option volume is above the average daily volume over the past 22 days. At KeeneOnTheMarket.com we scan and analyze order flow from all of the major options exchanges in order to identify any unusual option activity.
Analyzing unusual order flow gives traders a window into what the positions that large institutional players have. The majority of unusual option activity can be traced back to hedge funds, mutual funds, and other large institutions. Knowing where these institutions are placing their bets can be hugely advantageous for any trader. These institutions have informational and technological advantages that the average trader doesn’t have, and the amount of time and analysis that goes into every one of their trades is substantial. We offer this service through our 7 hour daily LIVE trading room bit.ly or through Premium Twitter feed with all entries, exits, and unusual options activity tweeted all day long: bit.ly .
Order flow can however at times be deceiving. One might logically thing that a large block buyer of calls is bullish on the underlying. This is not always the case. Remember that a large number of participants in the equity options market are hedgers. Long calls are a hedge against short stock, and long puts are a hedge against long stock. With this in mind we have developed a 7 step trading plan that helps filter out unusual option activity that will not provide actionable trade setups. It is by using this plan that we are able to identify the most significant unusual options activity trades every day.
