VantagePoint Trading Software is a forecasting tool that uses both end of day data and artificial intelligence to provide traders a forecast of market movement. These forecasts are 1-3 days in advance and help traders improve their timing on making trades and maximizing profit potential. The artificial intelligence software forecasts market movement for stocks, futures, Forex and ETFs. Metlife, MET stock, is in focus today…
This journal entry looks at the recent market movements of Metlife NYSE: MET
VantagePoint Trading Journal MET Stock
There are two completely different things in the news this week that some argue should have affected the market. The first is the “shocking tell-all” book about President Trump. Something news cycles will talk about incessantly, but the market doesn’t care about it. The second is the non-farm payrolls number. This number is something the news cycles will mention very infrequently and (apparently) has had an equally small effect on the markets. What does that mean? we have a continual slow bleed in the markets and no indication of any looming change in market direction.
What can we use to give us indications of potential market direction? We can use the artificial intelligence forecasting software VantagePoint to analyze individual stocks, futures or ETFs and broad indexes like the S&P, Dow, and the Russell. Today we focus on MET. Here’s the chart:
Using the predictive indicators embedded within the VantagePoint platform and its predictive AI technology, we will point out two significant things. We have a bullish crossover indicated by the blue predictive indicator line crossing above the black, simple 10-day moving average on 1/4/18. We can combine that with the VantagePoint propriety neural index indicator moving from the zero (0) to the one (1) position. This indicator measures strength and weakness for a 48-hour period. The move to the one (1) position indicates strength and further makes the case for a potential bullish scenario. That’s why one could consider entertaining a setup to the upside.
If one were a straight stock trader, simply buying MET stock in the $51.00 area could prove prudent. You are anticipating a continuing move to the upside. It’s also a conservative way to enter MET without the limitation of time associated with other strategies. It would also be good practice to place a sell-stop order in the $50.00 area to mitigate potential losses.
For more active traders with a shorter investment time horizon, you can consider a setup utilizing options. Given the market conditions outlined above, taking an active approach may be the best path to success.
The purchase of a debit call spread may be one way to approach this situation. We can consider buying the WEEKLY February Jan 26th 52/53.5 call spread that is trading $0.40. This will yield a risk to reward ratio of 2.75:1. This ratio is calculated by taking the width of the spread less any premium paid (1.50 – 0.40) and then dividing that number by the amount of premium paid (0.40). $1.10 divided by $0.40 =2.75 .
Given the trading and market environment outlined above, a trader must evaluate whether this reward/risk ratio is appropriate for his/her risk tolerance.