Bernie Schaeffer's Market Commentaries

February Option Advisor Commentary

Mon, 06 Feb 2012 14:31:00 GMT

The following is a reprint of the market commentary from the February edition of the Option Advisor, published on Jan 26...(Read More)

Letter from Bernie: The Hidden Cost of Hedging with Put Spreads

Wed, 25 Jan 2012 15:15:00 GMT

A June 8, 2011, Smart Money article entitled, "How to Shop for Car Insurance," warns "It may be tempting to purchase only the minimum amount of liability (insurance) required by law, but experts warn against this as accidents can cost way more than you could ever expect." This seems like sound, sensible and rather obvious advice to anyone with a feel for the ever-ballooning jury awards in liability cases...(Read More)

Bernie in Barron's: Debunking the Volatility Myth

Mon, 23 Jan 2012 13:57:00 GMT

In my guest column in the January 21, 2012 issue of Barron's entitled "The Volatility Illusion", I take the opportunity to discuss why I feel the crowd is deluding itself about the extent of the market's gyrations and why this may have powerful bullish implications for U.S. stocks.To read the full article, including my three-pronged argument that investor fears about stock market volatility are misplaced (and why fretting about bond market volatility could be a more fruitful activity), click here....(Read More)

Will the S&P 500 Stage a Repeat of Its Late 2010 Surge?

Tue, 29 Nov 2011 16:55:00 GMT

I've noticed some interesting similarities in the timing of S&P 500 Index (SPX) highs and lows in the third and fourth quarters of 2010 and 2011.August lows -- Market bottoms on August 27, 2010 and on August 8, 2011 (though these August lows were briefly taken out on October 3 and 4)Late-October/early-November highs -- On November 5, 2010 and October 27, 2011November lows -- The November 29, 2010 low was followed by a 15% rally into February 2011Will something similar eventuate now that we have a tentative low in place on Nov...(Read More)

Revisiting the Bearish Case for Banks on 'Nightly Business Report'

Mon, 28 Nov 2011 19:00:00 GMT

On Friday, Nov. 25, I was the featured Market Monitor on PBS's "Nightly Business Report" with Tom Hudson...(Read More)

Overseas Market Surge May Suggest the Beginning, Rather than 'The End'

Mon, 28 Nov 2011 13:45:00 GMT

In my Nightly Business Report appearance on Friday, my snapshot view on the market was that the bullish contrarian implications of extremely negative sentiment (as evidenced by a spate of bearish magazine covers) needed to be balanced against the market's weak price action and what I have been seeing as extreme complacency on the U.S. banking stocks.But with its cover story this weekend, The Economist may now have set up a trifecta of covers over the past 45 days that could allow the bulls to finally hit the jackpot...(Read More)

Letter from Bernie: New Rules for Playing High Volatility

Fri, 18 Nov 2011 18:35:00 GMT

What a difference three months can make in the options market! In my letter from our last issue, I observed: "With implied volatility (IV) at its lowest level in four years, we know the environment is favorable for buying option premium and will remain so if IV remains relatively flat." When I wrote those words, the CBOE Volatility Index (VIX) was drifting in the 16-20 range...(Read More)

November Option Advisor Commentary

Mon, 07 Nov 2011 15:30:00 GMT

The following is a reprint of the market commentary from the November edition of the Option Advisor, published on Oct...(Read More)

October Option Advisor Commentary

Mon, 03 Oct 2011 16:05:00 GMT

The following is a reprint of the market commentary from the October edition of the Option Advisor, published on Sept...(Read More)

August Option Advisor Commentary

Mon, 01 Aug 2011 14:00:00 GMT

The following is a reprint of the market commentary from the August edition of the Option Advisor, published on July 21...(Read More)

July Option Advisor Commentary

Tue, 05 Jul 2011 14:34:00 GMT

The following is a reprint of the market commentary from the July edition of the Option Advisor, published on June 23...(Read More)

Are We Setting Up for a Short-Term Market Peak?

Fri, 01 Jul 2011 13:29:00 GMT

The FTSE 100 (UKX) has rallied by about 300 points from its lows on Monday to its current level of 5,964...(Read More)

Discussing Slopes of Hope and Walls of Worry on 'Nightly Business Report'

Fri, 01 Jul 2011 12:47:00 GMT

On Friday, June 17, I was once again invited to be the guest Market Monitor on "Nightly Business Report." Tom Hudson and I took the opportunity to catch up since my last visit in January, and I reiterated my belief that this bull market is still in the "disbelief" stage...(Read More)

June Option Advisor Commentary

Mon, 06 Jun 2011 17:43:00 GMT

The following is a reprint of the market commentary from the June edition of the Option Advisor, published on May 26...(Read More)

Should You Be Concerned About Emerging Markets?

Tue, 17 May 2011 12:30:00 GMT

In my March 17 commentary entitled "Keeping It Simple", posted as the market was in the throes of a pullback accelerated by the disaster in Japan, I noted:"The three major broad market indices -- the Dow Jones Industrial Average (DJIA), the S&P 500 Index (SPX) and the Russell 2000 Index (through its ETF proxy - IWM) -- closed on Wednesday within minuscule fractions of break-even for 2011 (excluding dividends) ... I've often found year-to-date returns throughout the year can serve as remarkable 'speed bumps' for stock indices and individual stocks, which can help halt pullbacks and act as resistance on rallies...(Read More)

The Argument Against a Market Top

Mon, 16 May 2011 17:35:00 GMT

Once again this year, I had the pleasure of delivering a keynote at the Las Vegas MoneyShow with my "Top or No Top?" presentation...(Read More)

May Option Advisor Commentary

Mon, 25 Apr 2011 17:17:00 GMT

The following is a reprint of the market commentary from the May edition of the Option Advisor, published on April 14...(Read More)

Introducing Top-Notch Earnings Intelligence from Midnight Trader

Tue, 19 Apr 2011 16:15:00 GMT

First-quarter earnings season kicks into high gear this week, with more than 20% of S&P 500 Index (SPX) members scheduled to release their quarterly results ahead of the long weekend...(Read More)

IBM April Weeklies Are Hot, but the Value for Option Buyers Ahead of Earnings Tonight Is in May

Tue, 19 Apr 2011 15:16:00 GMT

As I'm sure you know, it's a quarterly ritual in the equity options market for implied volatility (IV) to rise steadily as earnings reporting dates draw closer, and ultimately spike to a peak on the last trading day before a scheduled earnings announcement...(Read More)

Silver - Is This the Beginning, or the Beginning of the End?

Mon, 11 Apr 2011 12:54:00 GMT

While the SPDR Gold Trust (GLD - 143.66) exchange-traded fund (ETF) seems to have staged a slow-motion breakout after a flat March, it is silver that continues to lead the way in the precious metals complex...(Read More)

Talking NYSE Bids, SPX Speed Bumps, and Black Swans with Bloomberg Radio

Thu, 07 Apr 2011 14:14:00 GMT

Last Friday, right after the closing bell, I had the pleasure of being interviewed by Bloomberg Radio's David Wilson and Courtney Donohoe...(Read More)

April Option Advisor Commentary

Mon, 04 Apr 2011 14:14:00 GMT

The following is a reprint of the market commentary from the April edition of the Option Advisor, published on March 24...(Read More)

Keeping It Simple, Part 2

Wed, 30 Mar 2011 22:16:00 GMT

At the time I prepared my March 17 commentary entitled "Keeping It Simple," the Dow Jones Industrial Average (DJIA - 12,350.61), the S&P 500 Index (SPX - 1,328.26), and the Russell 2000 Index (RUT - 840.37) -- through its ETF proxy, IWM -- were each showing flat year-to-date returns in the aftermath of the pullback that had caused the CBOE Volatility Index (VIX - 17.71) to spike sharply to 31 (about double its 2011 low), and concurrently spawned fears that a major stock market correction was underway.Consistent with the spirit of my headline, I made the following simple observation: "I've often found year-to-date returns throughout the year can serve as remarkable 'speed bumps' for stock indices and individual stocks, which can help halt pullbacks and act as resistance on rallies...(Read More)

Not All Black Swans are Black Swans

Tue, 22 Mar 2011 17:45:00 GMT

The CBOE Market Volatility Index's (VIX) recent peak at 31.28 reaffirms a pattern of "lower highs" in the various VIX event-driven spikes subsequent to the "mother of all spikes" in October 2008 (see accompanying chart)...(Read More)

Keeping It Simple

Thu, 17 Mar 2011 14:16:00 GMT

"If I have ever made any valuable discoveries, it has been due more to patient attention, than to any other talent." -- Sir Isaac NewtonSometimes in our attempts to divine market direction, it pays to keep it simple...(Read More)