End Of Day Post

The markets gave back their gains from yesterday as we continue to see consolidation at these levels. We haven’t seen the markets give or gain any ground over the last couple weeks, but this was to be expected over the holidays.

Volume has been very light, and regardless of tomorrow's action, we shouldn’t put too much emphasis on any "one" move without volume behind it. Tomorrow is the last trading day of 2015 and we don’t expect much, so consider keeping your fingers off the trigger until later next week.

Happy New Year,

Maverick Trading

End Of Day Post

The markets closed higher for a second day in a row, as we look to be bouncing off of lower support. The markets took a hard turn down on Thursday and Friday last week, just a day after the FOMC raised interest rates. We were expecting a bearish reaction to an interest rate hike; however, it is unclear on how far or long it would go. With only one trading day left in the week, we don’t anticipate much more from these markets.

Support looks to be holding this week. After Friday’s volume spike, we should see volatility slow down through the end of the year. We expect the markets to float back into their respective ranges as the year comes to a close, so don’t expect too many directional trading opportunities in the short-term. Enjoy your family and friends this weekend, and keep your trading activity light over the holidays.

Have a great night,

Maverick Trading

End Of Day Post

The markets gave back all of yesterday’s gains, as investors try and digest the latest Fed move. Yesterday, the FOMC increased interest rates by 25 basis points, which sent the markets higher into the close; however, today’s action paints a very different picture.

An interest rate hike has been in the works for some time and was almost expected. However, being this late in the year leaves little time for investors to take action. We have been noticing a whole lot of volatility over the last few weeks and these last two days have definitely followed suit.

We should expect volatility to continue as the markets try and decide where to go next. An interest rate hike usually has a short-term negative effect on the equity markets, but stay mindful of overall support levels – until they are broken, we are still range-bound. Once volatility subsides, we should see more of a directional market and, with the holiday approaching, we should see a decrease in volume.

Tomorrow is December’s expiration, the last monthly expiration of 2015. Follow your plan and make sure to address your December positions. Tomorrow would be a good day to just sit back and watch, given the market's current level and reaction to the Fed’s move.

Have a great night,

Maverick Trading

End Of Day Post

The markets moved higher today after putting in a decent reversal signal on Monday. We continued to see volatility in these markets, along with a decent amount of volume, as all three majors put in a hammer candle on support. Even though the S&P gained just over 1% today, we did close off of the intra-day highs. The S&P is off of its previous support level, but still below its moving averages.

Tomorrow brings us another FOMC statement. As always, we should expect some volatility like we have seen over the last two days, regardless if action is taken or not. Continue to stay balanced – our outlook is still sideways through the end of the year. However, we have been getting the move back into consolidation levels as discussed in Sunday's weekly Trading Room.

Keep an eye on the market reaction to tomorrow’s event, or lack of it. In either case, take your time and be slow to make any major adjustments to your portfolio or positions. Once the volatility calms down, you will have an easier time making adjustments. Look to add positions or make changes later in the day tomorrow or even later in the week, if so desired.

Have a great night,

Maverick Trading

End Of Day Post

We are still seeing some intra-day volatility, as the markets continued to move sideways. Although his week’s movement has been to the bearish side, we have yet to break major support levels. Today’s movement, as with yesterday, did show bearish retracement from intra-day highs. These patterns could indicate another test of short-term support levels (2040 on the S&P 500).

Nothing much has changed over the last few trading sessions, so continue with a sideways outlook and follow your personal trading plan. We will see retail sales and the PPI tomorrow, but we aren’t expecting much out of either number. We will be interested to see how this week finishes – specifically, if support is broken or if the bulls jump in.

Have a great night,

Maverick Trading

End Of Day Post

All three majors made another step lower today; however, we are still seeing consolidation overall. We have seen some volatile moves since Wednesday of last week, but the markets haven’t gained or lost any ground. Volume has stayed pretty much average as the bulls and bears look to be testing each other with little follow-through.

Volatility has been a little higher than expected over the last few days, but we are still moving sideways as a whole. Continue to keep this outlook until we confirm a move outside of the markets' current ranges. Look to take advantage of range-bound stocks if opportunities present themselves, but make sure to keep yourself adjustable. By using weekly expiration cycles and not over committing to any one direction for too long, we should be able to take advantage of continuing sideways markets.

There is not much going on in the headlines as of late. We did see a small drop in the NFIB small business index, but didn’t notice any significant market action associated with it. We still have the PPI and retail sales due out Friday, along with the weekly jobless claims number on Thursday. At this point, we can't be sure if any of these numbers will have an impact on the markets, but we should stay mindful of them regardless.

Have a great night,

Maverick Trading

End Of Day Post

The markets headed lower for the second session in a row, as we have now broken shorter-term support levels. The markets established – and broke out of – a very tight range created over the holiday week. Since Tuesday, the markets have been steadily retracing back down towards their respective lower channels, breaking below the base set last week.

We have seen a decent amount of economic news this week, which could be the primary factor for the increase in volatility. We still have the non-farm payrolls report due out tomorrow, which we expect will add even more volatility.

Technically, this looks more like a bull pullback – still well within an overall sideways range as investors react to economic results. These moves are speculative at best. Without any hard action taken by the Fed, we should continue to treat them as such. Stick to trading range-bound markets until this sideways trend is broken.

Have a great night,

Maverick Trading

Trading as a C Corporation

From Our November 2015 E-mail Archives: Our Head Trader, Robb, replied to an e-mail from one of Maverick's traders who had just passed the Maverick trader qualification program. He had a question regarding starting a C Corporation and the estimated cost.*


-----Original Message-----

From: Omar L.
Subject: Re: Approval for Capital Sharing

Good morning,

First and foremost, I want to say thank you for making all of your traders pass the qualification program. It has helped me build a solid foundation. I do not have a scanner, so I am faxing the attached documents this afternoon.

I do have a couple of questions about starting a C corporation. What is the first step in starting a C corporation and what is the estimated cost?

Best Regards,
Omar


-----Reply Message-----

Hi Omar,

The process of starting a C corporation (or S Corporation or LLC) is actually very easy. However, just because it's easy to fill out the required forms doesn't necessarily mean that it's easy to do it correctly. You will have to do a bit of research first.

I would say the best thing to do is to educate yourself. There are tons of articles and websites that will teach you the differences between corporations, what you can legally write off and how to structure things. Of course, there are companies out there that are willing to do this for you for a price, but they will simply be consulting and filling out the paperwork for you.

Once you understand and know what you are doing, the next step is to choose the state that you will incorporate in. Most people simply pick the state they live in. However, some people will incorporate in another state. For example, many people in California go elsewhere since fees in California are much higher than everywhere else. The fee to register a corporation in most states is typically between $50-$200 – in California, the fee is around $800.

Go to the state's website and search for corporations or incorporating. On that page, there will be instructions on what forms to fill out and how to complete them. Many states just have a template where you fill in the blanks and it creates your Articles of Incorporation for you. The Articles are the main paperwork that the state needs (along with your fee...of course, they never forget to ask for that!).

Once registered with the state, you need to register with the IRS and get your Tax Identification Number. I believe it is Form SS-4 – "Application for Employer Identification Number (EIN)" – that needs to be submitted to the IRS.

Once you are registered with the state and the IRS, you can now go to banks/brokerages and open corporate accounts. This is where it gets tricky since we are getting into the accounting now. I always tell our traders that the registering of a corporation is easy and can typically be done on their own. However, the accounting of the corporation definitely needs to be done by someone who knows what they are doing.

Your first step will be putting capital into the corporation, but you need to determine if it is a loan, buying of shares, etc. Then, you need to generate income and expenses in the business through your activities. Again, there is a lot of great information out there and I know that by logging in the hours to learn it, you will know what to do. Legally, I can't offer any specific advice.

Alternatively, you can hire a CPA at this point and have them do everything for you. A good CPA will only cost a few hundred dollars for a simple S Corp or LLC tax return. A C Corp will likely cost a bit more. We have a firm called Trader's Accounting that we refer a lot of our traders to if you feel that you need help at this point – contact us if you want more details about their firm.

Please feel free to send any further questions that you have to me.

Thanks,

Robb

* NOTE: Some original wording has been modified for legibility.

End Of Day Post

The markets pushed through a very tight consolidation area that we have seen developing over the last few days. Expectations were for the markets to move more sideways going into last week's U.S. holiday, so we weren’t too surprised that we ended up with a very tight basing pattern. Today’s move could be considered a breakout of a short-term basing pattern. However, these basing patterns did develop over a light week of trading, including a half session last Friday.

All three majors are still well below their high resistance levels set this past summer and we still expect to see range-bounding stocks through the year-end. The development of this small basing pattern over the last few days could create a shorter-term bullish opportunity. We should still respect the overall market's range; however, taking advantage of bullish surges and bearish corrections can prove profitable.

Timing will be the biggest factor for those who are willing to try and take advantage of smaller directional moves. Keep your exposure in mind over these shorter-term trades, as over-trading can become a problem. Range-bounding stocks, in the long-term, can also yield some good returns to the sideways player. Being patient and allowing stocks to move back and forth between support and resistance levels can be less labor intensive, but will test your discipline and your initial trade setup.

Have a great night,

Maverick Trading