The document discusses the transition to a paperless society and the implications for privacy and communication, especially regarding government access to electronic data. It also analyzes recent market trends in various indices, highlighting volumes, indicators, and potential targets for S&P 500, Nasdaq 100, Russell 2000, crude oil, and gold. The authors express caution regarding investment opportunities amid fluctuating market conditions and the ongoing uncertainties in these sectors.

1. Option Queen Letter
By the Option Royals
Jeanette Young, CFP®
, CMT, M.S. and Jordan Young, CMT
4305 Pointe Gate Drive
Livingston, New Jersey 07039
www.OptnQueen.com
optnqueen@aol.com
February 21, 2016
The paperless society.
Whenever a decision is made to go paperless, we are accepting electronic transmissions of our
information and data as a substitute for their paper predecessors. How does that impact us?
Well, we have witnessed an evolution in the medium with which we communicate and store
information. In coming days there will be very little in the way of paper data and information,
good, bad and ugly will be stored on a hard-drive, in the cloud or in some other electronic
method. To disallow investigation by the FBI of an IPhone or other device would be akin to
disallowing the FBI to investigate paper files. If you could imagine, this would be similar to
arguing that speed limits and other traffic laws did not apply to automobiles around the turn of
the century as they were written with horse and buggy in mind As our society adapts to changes
in the world, brought on by advances in technology, so to must our laws. Can you imagine the
problems seen with hand written notes vs. word documents? The same argument regarding
privacy could be made in that instance. How could you possibly allow that invasion of our
privacy yada yada…. How about smoke signals vs. written documents. The world of
communications are an ever changing and dynamic medium. As to privacy, while we don’t
object to the FBI reading our emails or any documents found on our IPhone or other products we
carry when a warrant is in hand, we do note that the current controversy surrounding the San
Bernardino shooter's IPHONE is rather more complex then the headlines would imply. In this
instance, the government has requested that Apple develop a "backdoor," something that
currently does not exist, making it possible to crack open an IPhone. The question of should
Apple do this vs. should they HAVE to do this are very different. We have very strong opinions
on any sort of compulsory labor.
The S&P chart declined in the Friday session which was an option’s expiration day. The volume
was nothing exceptional. Speaking of volume, we did notice a volume peak in the S&P 500 mini
future’s contract on January 20th
and a lesser peak on February 11th
. Both volume peaks
occurred on a downdraft day that ended the short-term downtrend. Neither days had enough
volume to indicate that the market washed out. Of further interest is the “W” like formation that
we are seeing on the daily chart. Our one concern is that the low of February 11th
was lower than

2. the previous low of January 20, which kind of negates the pattern. That said, if the market can
clear above 1940 and then 1946, we believe that a short covering rally could take the market to
1987.75 or so. The most frequently traded price was 1912 and the highest volume was seen at
1911. All the indicators that we follow herein are flattish and are truly not helping. They are all
rolling over but have not given anything close to a signal. The Bollinger Bands continue to be
contracted and have also leveled in their formation. The 60 minute 0.2% by 3-box point and
figure chart is positive. The daily 1% by 3-box chart is much less positive with a recent
downside target of 1530.57. As we approach March, remember that the contract will roll during
the second week of March into the June contract. This tends to skew the market and promote
volatility.

5. The NASDAQ 100 rallied 6.25 handles (points) in the Friday session. The chart shows that the
Bollinger Bands contracted on February 4th
and since that time have leveled off neither
expanding nor contracting. The indicators that we follow herein are replicating the behavior
seen with the Bollinger Bands. Volume spikes are seen on the down day January 20th
but to a
lessor level on February 8th
and even less on February 11th
. Since that time, volume has trailed
off. We seem to be stair-stepping to the downside with down-thrusts followed by rallies. The
downward trending channel lines are 4220.57 and 3828.18.. The most frequently traded price in
the Friday session was 4161 and the highest volume was seen at 4160. The 1% by 3-box point
and figure chart has a downside target of 3196.2 and is bumping up against the downtrend line.
The RSI on that chart has turned positive; however, the Bollinger Bands are contracting. The 60
minute 0.2% by 3-box point and figure chart has a downside target of 3927.38 and has an RSI
pointing lower. This index was the best performing index in the Friday session.

8. The Russell 2000 rallied 4.80 handles (points) in the Friday session. Both the stochastic
indicator and the RSI are pointing higher at overbought levels. Our own indicator is still issuing
a buy signal but is curling over to the downside. The volume for the day was on the light side
and the volume spikes seen in both the S&P 500 and NASDAQ 100 are absent. The last volume
spike was seen in December. The Bollinger Bands for this index are flattish. The down trending

9. channel lines are 1014.237 and 927.575. The most frequently traded price was 1006.50-1005.75
but 12.6% of the day’s volume was traded at 1008. The weekly chart of the Russell 2000 is
concerning and that said, both the stochastic indicator and the RSI are issuing a buy-signal for
that time-frame. The 10 by 3-box point and figure chart is interesting in that we seem to have hit
a wall of resistance at 1009.20. We continue to watch this index but are not ready to buy.

11. The US Dollar Index lost 0.355 in the Friday session. While that isn’t an awful change what is
awful is the candlestick left on the chart from that session. We see a rejection of a higher high
for the week with a close below all but the Monday session. The RSI has rolled over and is now
pointing lower. The stochastic indicator is curling over and will likely issue a sell-signal within
a session or two. Our own indicator will issue a sell-signal in the next session. The volume has
fallen off the cliff to a low level. The Bollinger Bands are contracting from a very expanded
level. The Market Profile chart shows the expanded trading range seen in the Friday session.
The most frequently traded price was 96.75 and the area with the most volume was 96.625,
where 7.5% of the volume was seen. The daily 0.5% by 3-box point and figure chart continues
to look negative. The 60 minute 0.2% by 3-box point and figure chart is even more negative
than is the daily point and figure chart. In defense of the US Dollar Index, the action in the 60
minute chart does show a removal of an internal downtrend line. Wait and see before taking any
action.

14. Crude oil lost 1.05 in the Friday session and continued its stair step lower. The Bollinger Bands
look as though they might be getting ready to expand again. They have been fairly flat of late.
The stochastic indicator is curling over but without conviction and looks a lot like our own
indicator. The RSI is issuing a sell-sign. The only good news about the Friday session is that
the volume is becoming light. The lightest volume seen this week was in the Friday session.
The highest volume and most frequently traded price was 29.10. Crude oil left a bimodal curve
on its Market Profile chart. The daily 1% by 3-box point and figure chart has an upside target of
39.71. The price remains below the downtrend line. The 60 minute 0.5% by 3-box point and
figure chart has a downside target of 28.27. We do not know if this market is bottoming and
would not take a position until or unless the downtrend line at 31.16 was removed on a closing
basis, and then is exceeded for at least two days.

17. Gold traded very narrowly in the Friday session leaving an inside day candlestick on the chart.
The pattern we see is a cup-and-handle. The downward sloping channel lines are 1232.88 and
1177.38. Our own indicators is issuing a buy-signal but both the RSI and the stochastic indicator
are issuing a sell-signal. This divergence is important to note as it tells you to investigate the
price behavior of this product. The Bollinger Bands continue to expand. The daily 1% by 3-box

18. point and figure chart has an upside target of 1794.71. The 60 minute 0.25% by 3-box point and
figure chart has an upside target of 1314.26 and a newer downside target of 1192.31. The RSI is
pointing higher. The spread between platinum and gold is becoming very wide. Gold is trading
at 1228 and platinum is trading at 945.6.

20. 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.
Past performance is not necessarily indicative of future results.
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