Jeanette Schwarz Young, CFP®, CMT, M.S.

Jordan Young, CMT

83 Highwood Terrace

Weehawken, New Jersey 07086

www.OptnQueen.com

April 12, 2015

The Option Queen Letter

By the Option Royal

The problem that the FOMC faces is truly a difficult one. If interest rates are ratcheted higher,

the US Dollar will become stronger which will impact our ability to sell our stuff to the globe.

Reduced sales will lead to less production which, will lead to a leaner work-force. What is the

solution? Keep interest rates where they are and hope that no bubbles appear in the economy or

allow the US Dollar to appreciate and put up with increased unemployment? Both of these

scenarios do nothing for the average worker who continues to struggle to pay bills and survive.

Meanwhile, yield hungry investors continue to keep the markets firm. Those who missed the

rally are also sitting on the side-lines waiting for an opportunity to buy in. We also see funds

flowing to our market from abroad. These events are signaling that, although the markets can

rally further, these rallies are taking more effort than had been seen in the past. We believe that

we are in a topping process and that we will, sooner rather than later, see a retreat.

This week, many Americans will pay their income tax, then again many will not. It is estimated

that between 49 to 52% of Americans do not pay any income tax. It is estimated that the

wealthiest 20% of American earners pay 84% of the total taxed. This year that number will be

higher. Further, 20% of Americans will be paid by the Federal Government. About half of all

Americans pay no tax. Why, simply because they do not earn enough money to pay tax. Scary

huh? Our basic argument is with those who pay no tax because they never declared income.

This group earns money below the radar, charging significantly less for their services if, paid in

cash. This group exists because we are bargain hunters, and hire people that we can afford. This

in turn encourages people to not pay taxes or pay less tax and work for a reduced cost if payment

is made in cash. Isn’t life grand!

The S&P 500 rallied 10 handles, 0.48% in the Friday session ending the week on a high note.

Although we are nearing overbought levels there certainly is more room on the upside. The 5-

period exponential moving average is 2081.14. The top of the flattish Bollinger Band is 2108.40

and the lower edge is seen at 2037.96. We are above the Ichimoku Clouds for all time-frames.

We seem to be in a trading zone of 2033.25 and 2107.75. Above the upper ledge is the life of

contract high of 2117.75. Naturally if we break above 2107.75 we will see the market try to

remove the high and print a new one. On the other side of the trade, if we close below 2033.25

we will open the door to1973.75. The most frequently traded price was 2083.90, but that

appears to have occurred in the overnight session. For the day session the most frequently traded

price was 2093 which also accounted for 11.5% of the day’s volume. The daily 1% by 3-box

point and figure chart continues to have an upside target of 2371.33. The chart is positive. The

60 minute 0.1% by 3-box point and figure chart is very positive as well. So long as the positive

mood continues things will be okay but there are divergences that are beginning to appear that

are worrisome. Keep you stops tight always remain

careful.

The NASDAQ 100 rallied 16.25 handles or 0.37% in the Friday session. The 5-period

exponential moving average is 4379.02. The top of the flattening Bollinger Band is 4472.25 and

the lower edge is seen at 4260.54. We do have a sign of exhaustion as well as a 13-count on this

chart. All the indicators that we follow herein continue to point to higher levels although we are

nearing overbought levels. Support should be seen at 4262 and resistance at 4441.74. The

upward trending channel lines are 4441.25 and 4367. We are above the Ichimoku Clouds for all

time-frames. The most frequently traded price in the Friday session was 439.60. The daily 1%

by 3-box chart has a downside target of 3978.36. This chart is positive with the market trading

above the internal downtrend line. The 60 minute 0.1% by 3-box point and figure chart tells a

different story. There is an upside target of 4499.83 and this chart looks very positive. So far so

good but that said, please keep your stops in place.

The Russell 2000 looks as though it could take out the life-of-contract high with just a little push

to the upside. This index added 5.30 handles in the Friday session. We are above the Ichimoku

Clouds for all time-frames. The 5-period exponential moving average is 1256.83. The top of the

Bollinger Band is 1270.11 and the lower edge is seen at 1228.36. The upward trending channel

lines are 1277.725 and 1246.36. All the indicators that we follow herein continue to point higher

although they seem to be losing some momentum. The most frequently traded price in the

Friday session was 1261.80. The highest volume price was 1260.90 which accounted for 17.4%

of the volume for all sessions. Remember this index will likely out-perform on the upside but

will also out-perform on the downside. We do have the buffer of being small capitulation and

likely there is much less effect from a strong US Dollar.

Crude Oil rallied 98 cents in the Friday session stay clearly in the defined trading range of 47.42

to 54.24. We are above the Ichimoku Clouds for the daily time-frame and below the clouds for

both the weekly and monthly time-frames. The 5-period exponential moving average is 51.21.

The top of the flattish Bollinger Bands is 54.16 and the lower edge is seen at 42.16. This market

has been trying to form a base since the beginning of the year. We continue to believe that

should we close above the upper range at 54.24, that we will cause a short-covering rally and

likely see the market trade up to 58.98 and then 63.23. We could, of course, just stay in the

range for a while longer. The 60 minute .02 by 3-box point and figure chart looks positive;

however, has an internal downtrend line which could give it some trouble. The daily 1% by 3-

box point and figure chart is also positive and does have an internal downtrend line. The most

frequently traded prices in the Friday sessions were 50.68-50.75. On the daily Market Profile

chart the range of crude is clear. We have been in a range for a while and sooner or later, this

will break either up or down. We believe that although the 34-32 level is still alive and well, that

it is likely that we will break to the upside. We suggest that you remain very nibble and remain

open to either direction.

Gold rallied 13.70 in the Friday session in spite of the rally in the US Dollar. The uptrend line is

1197.59. The 5-period exponential moving average is 1202.98. The top of the Bollinger Band is

1225.69 and the lower edge is seen at 1150.22. There is a horizontal resistance line at 1224.00.

All of the indicators that we follow herein are continuing to issue a buy-signal with plenty of

room to the upside. The horizontal support line is 1177.50. We are below the Ichimoku Clouds

for all time-frames. The 30 minute Market Profile chart has a tri-modal display. The most

frequently traded price in the Friday session was 1194.40, although much of it was seen in the

overnight session. The daily 1% by 3-box point and figure chart shows a downtrend line in

place. The chart looks neither bullish nor bearish. The 60 minute 3-box point and figure chart

has an upside target of 1229.60 and what is more important a penetration of the down trend line

and an internal uptrend line. Although we like gold, we are not convinced that all is well and

will proceed with caution.

The US Dollar Index rallied every day of last week after having spent the week before

consolidating and pulling back. The Bollinger bands are still consolidating with the upper band

at 100.02 and the lower band at 96.51. The RSI and our own indicator are issuing continued buy

signals. The index closed on the 99.72 resistance line. Above this point resistance is seen next at

101.92 and at 106.72 above that. Resistance below lies at 97.14 and 95.84. The .05 x 3 30 minute

Point and Figure Chart shows the index to be in a clear uptrend with 100.10 as the next upside

target and with 98.20 projected as the downside target. Changing the time frame of data used and

box size confirms these levels and adds 102 as a potential upside target. The US Dollar Index

may back and fill but through the week it will likely gun for the 100.38 high and make its way to

102 over the next week or two.

Risk Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions

involves substantial risk of loss and is not suitable for all investors. You should carefully

consider whether trading is suitable for you in light of your circumstances, knowledge, and

financial resources. You may lose all or more of your initial investment