Dr. Duke's Blog

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Written by Dr. Duke

Created: 11 July 2025

The Standard and Poors 500 index (SPX) closed today at 6260, down 21 points or -0.3%. SPX opened the week at 6259, essentially where it closed today. Trading volume was below the 50-day moving average (50 dma) and declining this week. 

VIX, the volatility index for the S&P 500 options, opened the week at 17.8% and declined all week, closing today at 16.34. The markets are nervous, but we are seeing the beginning of “risk on” behavior. 

I track the movement of the top 100 S&P 500 stocks ranked by beta, SPHB, to monitor the movement of high beta stocks. SPHB closed at 101.3 today, up 0.7% today and up 1.6% for the week. As you may see on the price chart, the high beta stocks have been steadily moving higher since early June, a strong bullish signal.

The NASDAQ Composite index closed today at 20,510, down 45 points or 
-0.2%. However, NASDAQ opened the week at 20,491, setting up a small weekly gain of +0.09%. NASDAQ’s trading volume tracked roughly sideways this week, above average two days and below average three days.

News and rumors from the Israel/Iran conflict, the Ukraine/Russia war, and the back-and-forth news about tariff negotiations kept price volatility rather high. Market prices have been choppy, but generally flat to bullish this week.

The S&P 500 and NASDAQ were essentially flat this week with losses of 0.3% and 0.2%, respectively. The bullish news can be found in the high beta stocks of the S&P 500. That index, SPHB, has been steadily higher since early June.

We start the earnings announcement cycle next week and that may cause additional market volatility. Although most news on corporate earnings has been bullish so far, headlines and rumors could cause some ups and downs on a daily basis. I think the bulls are largely in charge, but uncertainty abounds and that results in nervous trigger fingers. 

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Written by Dr. Duke

Created: 28 June 2025

The Standard and Poors 500 index (SPX) closed today at 6173, up 32 points or 0.5%. This week’s trading was strongly bullish with a gain of 3.4% for the week. Trading volume finally spiked higher today after remaining largely below the 50-day moving average (50 dma) for the past two months. 

VIX, the volatility index for the S&P 500 options, opened the week at 21.2% and declined all week, closing today at 16.3%. We would have to go back to
mid-February to find a similar value for VIX. The bulls are in charge and the large institutions and hedge funds are going “risk on”.

In the past, I have tracked the Russell 2000 index with the IWM ETF in order to monitor the high beta stocks relative to the average S&P 500 stock. However, one of my clients called my attention to SPHB, the Invesco S&P High Beta ETF. SPHB is an ETF composed of the top 100 S&P 500 stocks ranked by beta. SPX gained 3.4% this week; IWM also gained 3.4% this week, so the Russell 2000 index must have an average beta across its stocks close to that of the S&P 500. By contrast, SPHB gained 5.2% this week. I will use SPHB to monitor the movement of high beta stocks in the future.

The NASDAQ Composite index closed today at 20,273, up 106 points or 0.5%. NASDAQ opened the week at 19,427, setting up a weekly gain of 4.4%. NASDAQ’s trading volume ran below the 50 dma this week but spiked higher today.

The bulls were running this week, gapping open higher three mornings this week. The S&P 500 stocks and the NASDAQ Composite closed at new all-time highs today. A cease fire in the Israeli/Iran conflict certainly played a role. Progress in several of the trade tariff negotiations helped improve the market’s mood. The NASDAQ Composite led the S&P 500 stocks this week. This appears to be a replay of NASDAQ’s high-tech stocks leading the bull runs last year. IBD’s recommendation for market exposure remains at 80-100%. We may be looking at a double-digit year for the markets. Predictions are always dangerous, but this market looks pretty solid at this point.

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Written by Dr. Duke

Created: 20 June 2025

The Standard and Poors 500 index (SPX) closed today at 5968, down 13 points or -0.2%. This week’s trading was choppy and slightly lower, primarily due to uncertainty over the Israeli and Iran war. SPX opened the week at 6004 for a weekly loss 
of -0.6%. Note the support level of 5967 operative today. Trading volume for the S&P 500 stocks continues its trend of running below the 50-day moving average (dma) with today’s volume spike due to quadruple witching (expiration of the stock index futures, single stock options, options on the stock index futures, and expiration of the quarterly stock index options).

VIX, the volatility index for the S&P 500 options, opened the week at 19.8% and closed today at 20.6%, up 0.5 points or +2.4%. The large institutions and hedge funds are carefully protecting their gains, concerned about expansion of the military action in the middle east.

I track the Russell 2000 index with the IWM ETF, which closed today at 209.2, down 0.4 points or -0.2%. IWM opened the week at 210.5 for a loss of -0.6%. Trading volume rose above the 50 dma yesterday and today. Note the support level at 208. I will be watching that level next week.

The NASDAQ Composite index closed today at 19,447, down 99 points or 
-0.5%. NASDAQ opened the week at 19,551, setting up a weekly loss of -0.5%. Note the support level at 19,440 as the market opens next week. NASDAQ’s trading volume declined this week but was pushed above the 50 dma today by quadruple witching.

Market trading action this week was largely sideways with a slight decline back to the mid-May highs. For the S&P 500 stocks, that level is 5967. For the NASDAQ Composite and the Russell 2000 indices, those support levels are 19,440 and 208, respectively. I will be watching those levels closely as the market opens next week.

The market’s primary worry is the possible expansion of the Israeli/Iran conflict. The trade tariff negotiations continue as a secondary concern. Some of the early negotiation results appear to be calming some of the nerves. The Israeli/Iran conflict has added to the market’s uncertainty, as measured by VIX rising to 21% today.

Our TSLA condor booked an excellent return of 40% today, but this market remains volatile. Keep a close eye on your positions. 

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Written by Dr. Duke

Created: 14 June 2025

The Standard and Poors 500 index (SPX) closed today at 5977, down 68 points or 1.1%. This week’s trading continued the bullish run of the past couple of weeks, but gapped lower today, spooked by the Israeli and Iran war. SPX opened the week at 5977 for a weekly loss of 0.5%. Trading volume for the S&P 500 stocks continues its trend of running below the 50-day moving average (dma).

VIX, the volatility index for the S&P 500 options, opened the week at 17.7% but started increasing on Wednesday and gapped open higher today, closing at 20.8%. The large institutional traders are hedging their gains in light of the military action in the middle east.

I track the Russell 2000 index with the IWM ETF, which closed today at 208.9, down 3.9 points or 2.3%. In addition, IWM gapped down at the opening Thursday and Friday mornings. IWM was down 2.3% this week and all of this negative price action resulted in a 100% spike in trading volume today (25.3M to 60.5M). The high beta stocks of the Russell 2000 index form the canary in the coal mine and may suggest a more challenging market ahead.

The NASDAQ Composite index closed today at 19,407, down 256 points or 
1.3%. NASDAQ opened the week at 19,573, setting up a loss of 0.8% for the week. NASDAQ has now given up the past week’s gains. NASDAQ’s trading volume ran at or above the 50 dma all week.

The market gave us some encouragement over the past couple of weeks, but this week’s trading action threw some cold water on early enthusiasm. Consider the data for the broad market indices over the past week:
 
S&P 500:  -0.5%

NASDAQ Composite  -0.8%

IWM  -2.8%
 
The losses in IWM (the Russell 2000 index) were the highest by far, reflecting the high beta values of these stocks. Don’t let that tempt you to ignore this warning sign. On both Thursday and Friday mornings, IWM gapped open lower and Friday’s trading volume doubled that of Thursday.

The market is on edge with all of the tariff hype and fear mongering. We see that not only in the wide price swings but also in the SPX volatility index, VIX. VIX had settled down to about 17% by Wednesday but spiked higher to nearly 22% by Friday. 

The tariff negotiations, the speed at which the new administration is moving, and now war in the middle east have greatly increased uncertainty on Wall Street. Contrary to conventional wisdom, Wall Street detests uncertainty. The end result is a lot of itchy trigger fingers, both bullish and bearish. Most of my positions are handling these gyrations rather well, but traders would be well advised to keep a close watch.

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Written by Dr. Duke

Created: 07 June 2025

The Standard and Poors 500 index (SPX) posted a strong beginning for June this week, closing today at 6000, up 61 points or one percent. SPX opened the week at 5897 for a weekly gain of 1.7%. Trading volume for the S&P 500 stocks has continued its trend of running below the 50-day moving average (dma).

VIX, the volatility index for the S&P 500 options, steadily declined this week, opening at 19.8% and closing today at 16.8%. VIX declined 1.7 points today 
or -9.3%.

I track the Russell 2000 index with the IWM ETF, which has made significant gains this week, closing at 211.9 for a gain of 3.4 points or 1.6%. IWM gapped open higher this morning, bringing it closer to breaking above the 200 dma. IWM’s trading volume remains below average this week, as it has been since early May. However, the gap opening is a very positive sign for these high beta stocks.

The NASDAQ Composite index closed today at 19,530, up 232 points or 
1.2%. NASDAQ opened the week at 19,063, setting up a strong weekly gain of 2.4%. NASDAQ posted strong returns for May and has continued that strong bullish trend for June. However, NASDAQ’s trading volume ran below the 50 dma all week.

The market has been trading higher since the middle of April, but It feels like we have been waiting for a bullish market for a long time. We have seen a lot of volatility since early April. May put in a solid bullish month, but it was volatile, frequently jerking us back and forth. The past two weeks look much more solid.

The prices of the S&P 500 index, the NASDAQ Composite and the Russell 2000 index are now all trading above the 50 dma. But all of these broad market indices continue to trade below the 200 dma. So, we aren’t out of the woods yet.

The most bullish signal this week was IWM gapping open today and trading higher. That is a strong sign for an ETF built with high beta stocks. With the notable exception of TSLA, all of the positions in my portfolio are positive. And even TSLA shows signs of recovering quickly from the public spat. Volatility has declined steadily since May 17th and closed today at 16.8%. That is the lowest level of VIX since late February. However, the market is on edge with all of the tariff hype and fear mongering. Each day brings the risk of a rapid move in one direction or another that may reverse quickly within the same trading session. Continue to be cautious.

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Written by Dr. Duke

Created: 31 May 2025

The Standard and Poors 500 index (SPX) essentially wandered sideways this week, but it held up for a positive gain for May with a close at 5912, essentially unchanged for the day, but up 1.0% for the holiday shortened week. Trading volume has tracked below the 50 dma all month, but it spiked much higher today.

VIX, the volatility index for the S&P 500 options, steadily declined this week, opening at 20.6% and closing today at 18.6%. This level of volatility isn’t too extreme, but it isn’t perfectly calm either.

I track the Russell 2000 index with the IWM ETF, which has basically traded sideways this week, closing today at 205.1, down 0.5% for the day and down 0.2% for the week. IWM’s trading volume remained below average this week and barely touched its 50 dma today. IWM is still trading well below its 200 dma.

The NASDAQ Composite index closed today at 19,114, down 62 points or 
-0.3%. NASDAQ opened the week at 19,014, setting a weekly gain of 0.5%. NASDAQ’s trading volume ran at or below the 50 dma this week, except for popping higher yesterday.

The S&P 500 stocks gave back their previous gains last week and essentially traded sideways this week. Today’s trading was significant in that SPX hit a low intraday but quickly recovered and closed very close to Thursday’s close. That was a bullish sign for the market. Trading volume in the S&P 500 stocks spiked strongly higher today, another bullish sign.

The prices of the S&P 500 index, the NASDAQ Composite and the Russell 2000 index are now all trading above the 50 dma. That is confirmation of a bullish trend following the recent correction. But none of these broad market indices have returned to a bullish configuration of the 50 dma running above the 200 dma. This reflects the serious losses taken during the correction.

IBD raised its recommended stock market exposure to 80-100% on 5/13 and remains there today.

The candlestick patterns of the broad market indices today are interesting. IWM displayed the classic doji which may suggest a trend change in either direction. The traditional hanging man, seen in SPX and NASDAQ, often suggests a bearish reversal of an uptrend. But today’s trading action was interesting, opening lower this morning, hitting a significant low midday and then trading higher to close almost exactly at Thursday’s close. I believe this pattern suggests that traders saw the intraday low as a bargain and strong buying resulted in a much higher close.

I have continued to enter new trades, but I am cautious. Our AAPL diagonal call spread ended badly but our TSLA iron condor is proceeding profitably. All of my trades in the Conservative Income trading service are profitable and our Flying With The Condor™ positions are positive. Our SPX Zero DTE Trading positions have been profitable this week and that service is up 59% for 2025. Volatility declined steadily this week but it remains high enough to command respect. Use a high hurdle rate and tight stops for prospective trades. Large institutional traders are quick to hit the sell button and we have tariff news daily.

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Written by Dr. Duke

Created: 16 May 2025

The Standard and Poors 500 index (SPX) continued its bullish trend this week with a gap opening on Monday morning to break the 200-day moving average (DMA). SPX closed today at 5958, up 42 points or 0.7% on the day. SPX opened the week at 5807 for a weekly gain of 2.6%. However, trading volume remains below the 50 dma and slowly declined all week.

VIX, the volatility index for the S&P 500 options, steadily declined this week, opening at 19.8% and closing today at 17.2%. Declining volatility is suggesting a calming of the market’s nerves.

I track the Russell 2000 index with the IWM ETF, which has basically traded sideways this week, closing today at 209.9, up 0.8% for the day and up 0.5% for the week. IWM’s trading volume declined modestly this week and is running below its 50 dma. IWM posted a large gap opening Monday morning but then cooled off and just traded sideways, remaining well below its 200 dma.

The NASDAQ Composite index closed today at 19,211, up 99 points or 
+0.5%. NASDAQ opened the week at 18,675, setting a weekly gain of 2.9%. NASDAQ’s trading volume is unique among the broad market indices; it ran above the 50 dma all week. The AI stocks continue their run.
 
The strong gap opening of the markets on Monday morning, followed by a consistent run higher this week certainly quieted the doomsday crowd. The missing element of a strong bull market is increased trading volume. That suggests that the large players remain largely on the sideline. However, NASDAQ has broken out above its 200 dma. Both SPX and the Russell 2000 remain below their 200 dma. NASDAQ’s leadership probably reflects the continued drive into AI stocks.

IBD raised its recommended stock market exposure from 40-60% to 80-100% 
on 5/13.

The S&P 500 and the Russell 2000 indices have not yet returned to a bullish configuration of the 50 dma running above the 200 dma. That reminds us of the serious losses taken during the correction.
I have begun to slowly enter new trades, but I remain cautious. Our AAPL diagonal call spread is proceeding well. Volatility declined steadily this week and that is a helpful sign. Weak trading volume is my primary concern. Be patient for the right trade setup. Keep your stops tight.

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Written by Dr. Duke

Created: 03 May 2025

The Standard and Poors 500 index (SPX) continued its bullish trend this week with a gain of 3.4% for the week after gap openings the past two mornings. SPX closed today at 5687, up 83 points or 1.5% on the day. SPX opened the week at 5233 and closed today at 5525 for a weekly gain of 5.6%. However, trading volume remains below the 50 day moving average (dma). That suggests that the large players remain on the sidelines.

VIX, the volatility index for the S&P 500 options, steadily declined this week, opening at 25.8% and closing today at 22.7%. That level of volatility suggests that many market participants remain moderately concerned.

I track the Russell 2000 index with the IWM ETF, which gapped open this morning and closed at 200.4, up 2.3% for the day and up 3.1% for the week. IWM’s trading volume is running well below average, as it is for the S&P 500 and NASDAQ indices.

The NASDAQ Composite index closed today at 17,978, up 267 points or 
+1.5%. NASDAQ opened the week at 17,391, setting a weekly gain of 3.4%. NASDAQ’s trading volume has run well below average for the past three days.

This week gave us the first signs of a possible recovery as SPX gapped open Thursday morning and traded higher on above average volume. The S&P stocks continued higher on Friday. IBD had declared 4/22 as the Follow Through Day (FTD) but that bullish day occurred with below average trading volume. Thursday’s gap opening and continued move higher with increased volume fit the criteria better. I now feel more confident about beginning the process of slowly re-entering the market.

I have begun to place a few small trades, but I remain cautious. Weak trading volume is my primary concern and the VIX remains high at 23%. Be patient. Remain largely in cash. Keep your stops tight.

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Written by Dr. Duke

Created: 25 April 2025

The Standard and Poors 500 index (SPX) put on a strong bullish trend this week. Opening the week at 5233 and closing today at 5525 for a weekly gain of 5.6%. But the trend in trading volume constitutes the fly in the ointment. Trading volume on the S&P 500 index has been running under the 
50 day moving average (dma) for the past two weeks. That suggests that the large institutional players have not yet been convinced to start a buying spree.

VIX, the volatility index for the S&P 500 options, opened the week at 32.8% and declined steadily to close today at 24.8%.

I track the Russell 2000 index with the IWM ETF, which closed today at 194, nearly unchanged from yesterday’s trading. IWM opened the week at 185, for a gain of nearly five percent for the week. IWM’s trading volume is running well  below average trends, as we have also seen in the S&P 500 and NASDAQ indices.

The NASDAQ Composite index closed today at 17,383, up 217 points or 
+1.3%. NASDAQ opened the week at 16,053, setting a weekly gain of 8.3%. NASDAQ’s trading volume has run well below average this week, with the single exception of Wednesday, the only down day this week.

This week gave us the first signs of a possible recovery, but the key indicator of higher trading volume as the large players move into the market is missing.

The large spike in trading volume on April 7th as the market hit its low of this correction, down 21%, may have been the sign of capitulation. Then trading volume spiked on the large bullish spike on April 9th, hinting that a recovery might be underway. But trading volume has consistently trended below averages since then.
 
I use the Follow Through Day methodology developed by Investors Business Daily to determine when it is safe to begin to re-enter the market after a correction. The first thing we are watching for is a strong bullish day on a broad market index like SPX or NASDAQ. That day would be the Day One of the Follow Through Day methodology. The bullish day of April 9th fits the criteria of Day One. The day count has continued but we have failed to find a Follow Through Day (FTD), a strong bullish trading session on above average trading volume. The purpose of the FTD methodology is to prevent our jumping back into the market just in time for the next leg of the downtrend.

Being largely in cash and waiting to reenter the market can be difficult. Be patient. Perhaps we will see confirmation of the recovery next week.

I am pleased to announce that my blog has been selected for the top 40 options trading blogs by Feed Spot.  I am number 14 of the 40.

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Written by Dr. Duke

Created: 04 April 2025

That sounds like a limbo contest but I’m serious. The Standard and Poors 500 index (SPX) gapped open even further than yesterday’s huge gap opening to drop another 322 points, closing at 5,074, down six percent. That puts the correction at -17.5% since the high on 2/19. SPX opened the week at 5528, resulting a loss of 8.2% for the week. Trading volume spiked up over six billion shares today, almost twice the 50-day moving average (dma) at 3.4 billion shares. To put that volume in perspective, today’s trading volume almost reached the level set two weeks ago for quadruple witching.

VIX, the volatility index for the S&P 500 options, spiked even higher today, closing at 45.3%, up 15 points or 51%. VIX opened the week at 24% but spiked higher yesterday and spiked even further today.

I track the Russell 2000 index with the IWM ETF, which closed today at 181, down 8.5 points or -4.5%. IWM opened the week at 197, chalking up a loss  of 8.1% for the week. IWM’s trading volume spiked up to 93 million shares, dwarfing both the 50 dma at 30 million shares and quadruple witching on 3/21 at 39 million shares.

The NASDAQ Composite index closed today at 15,588, down 963 points or 
-5.8%. NASDAQ opened the week at 17,045, setting a weekly loss of 8.5%. NASDAQ’s trading volume spiked to eleven billion shares today, well in excess of  the 50 dma at 7.8 billion shares. Today’s trading volume even beat the record 8.8 billion shares set on quadruple witching Friday, March 21.

Two weeks ago, we were talking about the ten percent correction in the market, but we didn’t have a clue of how bad it could become. At this point, I am not only shocked at the magnitude of this market sell off, but worse, I don’t have a clue where this decline will finally end.

Traditionally, technical analysts look for a spike in trading volume as the market nears its ultimate low. This known as capitulation and tends to take place near the end of a market cycle when investors effectively throw in the towel and exit the market at a loss. The large declines yesterday and today on consecutively larger trading volume may be the signs of capitulation. The hope is that this signals that the bottom is near.
 
I use the Follow Through Day methodology developed by Investors Business Daily to determine when it is safe to begin to re-enter the market after a correction. The first thing we are watching for is a strong bullish day on a broad market index like SPX or NASDAQ. That day would be the Day One of the Follow Through Day methodology. The bullish day of 3/31 appeared to fit the criteria of Day One. The day count then continues as long as the intraday low of day one isn’t broken. That low of 3/31 at 5489 was broken yesterday, so the search for Day One continues. The purpose of this follow through day methodology is to prevent our jumping back into the market just in time for the next leg of the downtrend.

Being largely in cash and waiting to reenter the market can be difficult. Be patient.

It isn’t for everyone, but I have found that trading the zero dte options of the S&P 500 index works quite well on these otherwise dismal market days. It requires quick entry and exit, taking your profits and then being stress-free with 100% cash overnight.

I booked a 33% gain today. If you are interested in following my zero dte trading, take a look.