How to Trade Options “Off the Grid”

I’m thinking about going off the grid.

You see, I’ve been dealing with some rural high-speed broadband issues here at my Michigan lake house — mainly because I live around a point that blocks me from the city ten miles across Lake Superior.

shot point

Shot Point: the culprit blocking my broadband!

So far, none of the fixes are working.

Satellite internet’s not an option for me — uploads are no faster than regular internet service. Plus, a tall tree in my yard apparently sways too much, making my reception spotty on windy days. My internet provider sent a worker out to try and find a sight line. But the man apparently fell off my roof!

Thankfully, he’s fine (he has bruises or hairline fractures on his heels I’m told, but the company was very reluctant to share details). But I wasn’t even around to watch the scene unfold. The only reason I knew something was amiss was because a spool of cable was up on top my roof for a month after the technician took his tumble into my backyard.

The saga continues this week as I’m scheduled to meet with my provider about feeding off a newly constructed antennae at a casino a few miles down the road. Phase two of their solution is to erect a 90-foot tower. But with all the infrastructure projects underway, they seem to be out of supply in the Midwest. Supply and demand!

To make things worse, a snowplow mowed down my mailbox just a couple of weeks ago when my internet and electricity were also down for the day. Not only was my email down, I also lost my snail mail connection! These are the challenges of living in a remote location.

The only solution to these problems is for me to take control of the situation myself. I’m already researching generators and solar power. If I want to stay connected, I’ll need to create my own grid.

Back to the markets…

Stocks treated us to another momentum move! We’ve been seeing higher highs and higher lows as the S&P 500 remains above 2,800. It’s all about the money flow — and we’re seeing money continue to come into the marketplace.

Last week, I mentioned that I wanted to see small-caps begin to catch up to the Nasdaq’s tech leaders. That’s exactly what we’re seeing right now. The laggards are finally getting in on the action! That’s a good sign for the health of this recovery rally…

Keep it In the Money,

Alan Knuckman

Alan Knuckman
Editor, In-The-Money

Chart of the Day: Can small-cap strength continue?

Greg GuenthnerIt’s been a rough year for small stocks.

While mega-cap tech names have been the glue that’s held the recovery rally together, small-cap names were forced to endure one of the worst selloffs during the March coronavirus panic.

But the tide might soon turn for this forgotten group…

A favorite target of short-sellers just six short weeks ago, small-caps are trying to turn the corner in a big way and catch up to the roaring recovery rally.

Yesterday’s action was telling. As the major averages gave up their morning gains, the Russell 2000 small-cap index held firmly in the green. As of Tuesday afternoon, the Russell is now leading the Nasdaq Composite off the March 23 lows.

IWM chart

Even when you factor in yesterday’s morning fade, the Russell 2000 small-cap index has gained 9% over the past five trading sessions, compared to a gain of just over 4% in the Nasdaq Composite. An impressive move!

But smaller stocks still have a long road to recovery. The iShares Russell 2000 ETF remains down more than 20% year-to-date, while the Nasdaq Composite is down a little more than 3% over the same timeframe. We’ll need to see a sustained recovery before we can sound the “all clear” on a sustainable small-cap rally…

— Greg Guenthner

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Alan Knuckman

Alan hails from the home of options trading in Chicago, where he began working as a clerk on the floor of the Chicago Board of Trade (CBOT). Beginning with his days on the floor, Alan’s worked with all aspects of the options markets for the past 25+ years.

Transitioning from a clerk to a floor...

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