French Fried Bears: They’re What’s for Dinner!
The market is certainly pleased with the first round of the French Presidential Election. Emmanuel Macron scored a victory and is apparently in the driver’s seat to win the May 7 runoff against far-right populist Marine Le Pen. Le Pen supports a vote for a French exit of the election, and assuming Macron wins, a so-called “Frexit” may be off the table. I wouldn’t count Le Pen completely out just yet though. We’re still living in an era with the Brexit, President Trump, and Italy’s ‘No Vote.’ So anything is possible. Today, the SPX is up 1% and within striking range of the 2401 all-time high. XLF is up 2.4%. The euro is up 1.3% against the dollar. The French CAC 40 index is up 3.9%. And the VIX is down a whopping -23%. So why is this happening? Why are we making such a big move? It’s simple: the bears built a big, big fire. And then they fell in it. Last Thursday afternoon, I pointed out that trader sentiment was looking very bearish heading into the weekend election. As you probably now, the permabears have been out in force saying that everyone’s complacent. But the numbers showed otherwise. For example, the American Association of Individual Investors showed that just 25.7% of individual investors are bullish. That’s well below the long-term average of 38.5%. And as of Friday’s close, the 10-day moving average of the CBOE Equity Put-Call Ratio was 0.703, indicating that traders had been stocking up on puts ahead of the weekend. The last time it was that high was February 8, 2017, when SPX closed at 2294.67. The index then hit 2400.98 on March 1. And then, there’s the ISE Sentiment Index, which measures call options demand relative to put option demand using only opening long customer transactions. (market maker and firm trades are excluded) Its daily average has been just 84 this year, or 84 calls bought for every 100 puts. That’s well below long-term average readings. So there was certainly no shortage of bears heading into the weekend. (h/t to Marc Eckelberry for pointing this stat out on the Virtual Trading Floor® (VTF). And when you get a lot of bears bracing for a negative outcome — like a Le Pen victory — that means there’s ample fuel for a rally if the news is positive, or even neutral. The Lesson to Be Learned High stock prices and valuations do not necessarily equate to bullish sentiment. At its root, a bull market happens when there are consistently more optimists (buyers) than (pessimists) sellers. But even with us within 2% of all-time highs, the data shows that there’s still an awful lot of folks that are braced for downside. It doesn’t seem to make a whole lot of sense… but when is anything involved with the market perfectly logical?
Continue Reading -->T3 Live Weekend Recap 4-22-17 | Trade Ideas & Trader Education
T3 Live Weekend Recap 4-22-17 | Trade Ideas-Trader EducationT3 Live Training Facility NYC-NYWhy SPY Could Hit New All-Time HighsIt was tough to see this one coming.After reversing to finish on the lows Wednesday, SPY gapped up Thursday morning. And following a small, quick pullback, it took off running higher straight through into the afternoon.It reclaimed the 20 day sma (234.71) — barely even pausing — and continued up above the 50 day sma (235.46). It settled into a relatively tight range above the 50 day sma for most of the afternoon but dropped right before the bell to finish a few cents underneath it. The move as on above average volume.So a week of bearish action was wiped out in one face-ripping rally. Reclaiming the moving averages was a big positive for the bulls. CONTINUE READING == >>How the 3-Bar Rule Can Help You Deal With Failed SetupsOur Trading the Pristine Method® Home Study Course teaches traders a unique approach to trading candlestick price patterns.What make it unique?It is 100% objective and systematic, and eliminates all guesswork from the buying and selling process. We teach identifiable patterns that stocks trade in, and then show the exact strategies of what to do in each stage of a stock’s movement, including how to enter, manage, and exit the trade.That said, not all trades work. No pattern makes money 100% of the time, and the failures must be watched for 3 reasons:1) To see and capitalize on a “new opportunity” when a pattern fails but immediately sets up again2) To know how best to manage a position before it fails by evaluating the charts objectively.3) To help you in disaster management mode in the event you are in a position that has failed. CONTINUE READING == >>Register Today | Rob SMith Webinar Monday April 24 | 4:30 PMRegister TodayQuant Edge Training: A New Way to Read Charts 4 Charts You Need to SeeThe market’s been stalling since the 3/1 gap up on Trump’s speech. And lately, we’ve been seeing weakness in the banks, even the ones reporting good earnings, which has traders worried about more downside. I discussed some of the key players like Bank of America (BAC) and Goldman Sachs (GS) this afternoon on CNBC’s Fast Money: So let’s take a step back and take a look at 4 key charts to get an idea of where we stand. 1) S&P Financial Sector ETF (XLF)I actually also appeared on Fast Money on March 22 to discuss XLF, which had lost momentum by breaking the 8 & 21 day moving averages.You can see the March 22 segment here: CONTINUE READING == >>Trader Training | 9 Tips for Picking the Right Stocks for Swing TradingAs a swing trader, one of the most important decisions you’ll every make is choosing which stocks to trade. You can learn all the winning setups in the world, but if you trade the wrong stocks, you’re going to lose money. So we’ve put together 9 simple tests that can help you steer clear of the ticking time bombs, and keep you focused on the winners. GET THE 9 TIPS HERE == >Is Prop Trading Right for You? Take Our FREE Quiz and Find Out! TAKE THE QUIZ Scott Redler: Market Thoughts Ahead of the French ElectionIt’s been a very choppy week.I wish I had more commitment to a direction, but I just don’t.Technicals are very mixed. The Oscillator is neutral, not oversold or overbought. SPX is almost smack in the middle of the range from the 2400 high to the 2322 low.We are close to reclaiming all the moving averages, but there’s no real conviction. Tech still shows relative strength.Small caps and banks had a bounce off recent support, but I’m not sure if they are out of the woods. Bios are still hanging in, but no one is paying up. XLE is still brokenRead Scott’s Game Plan for Next Week == >>Scott Redler Watch the Video Today | Duration 30:15GET THE NEW TRAINING PODCAST | T3 CEO Sean Hendelman Discusses the Future of Automated TradingOn March 15, 2017, Sean Hendelman, CEO and co-founder of T3 Live and T3 Trading Group, appeared on the Chat With Traders podcast hosted by Aaron Fifield. In this special interview, Sean discusses:How he got started as an investorImportant lessons he learned from losing moneyHow the automated trading space is evolvingThe challenges of latency-sensitive strategiesThe structure of T3 CompaniesJeff Cooper: The Bonfire of the Equities?In this today’s report, I couldn’t help but wonder whether investors/traders are giving short shrift to the idea of a big market event in the event of a Le Pen victory in France. After all, selling volatility and not buying insurance seems the smart move a la Brexit and the US election. Right? Maybe the very buying of insurance for those ‘non-events’ was one of the reflexive factors that perpetuated the rally phases following Brexit and the Trump Victory. Just because the house doesn’t burn down, you don’t cancel the fire insurance do you? I can’t help but wonder whether ‘wise guys’ are selling volatility here and that the 3rd time may be a charm for bears. History doesn’t always repeat of course, but we can learn a lot from it. CONTINUE READING == >>
Continue Reading -->What Is the VIX? And How Can I Trade It?
How can I make money trading the VIX? That’s one of the most popular questions we get from aspiring traders. And they usually don’t like the answer — because you can’t trade the VIX. The VIX — better known as the Chicago Board Options Exchange Volatility Index — is not a security, and thus the number you see on your screen is not a price. It’s actually a trading indicator. The VIX uses prices of various S&P 500 options with expirations between 23 and 37 days to measure traders’ expectations of volatility. The VIX helps us measure sentiment by telling us how much traders are willing to pay for these options. Typically, the VIX rises when traders are worried about downside risk. Why? Because when traders are worried about downside risk, they’ll pay higher prices for downside protection through options. Let’s take a look at a 10-year monthly chart of the S&P 500 (bar chart) against the VIX (purple line): The chart shows that the VIX had major spikes during the: A) Financial Crisis B) Flash Crash C) Euro Sovereign Debt Crisis D) August 2015 Minicrash This illustrates how the VIX rises when traders are scared and markets are coming under pressure. Why? Again, because traders were willing to pay up big for downside protection through S&P 500 options. The same dynamic plays out on shorter time frames. As you can see in this 20-day hourly chart, when the S&P 500 (bars) rises, the VIX (purple line) falls: And vice versa. What You Can Trade We told you before that you can’t trade the VIX directly, since it is an indicator. However, there are many derivatives of the VIX that can be traded. But before we proceed further, you must understand that virtually all VIX-related instruments can be tricky to deal with. And we urge you to read the prospectus and understand the pricing mechanics of any VIX-related instrument you trade. VIX Options and Futures The CBOE has created VIX futures and options. VIX futures trade nearly 24 hours, 5 days a week. And VIX options can be traded just as easily as a standard equity option. However, keep in mind that VIX options typically expire on Wednesday, and VIX options contracts are based on the price of VIX futures, not the VIX itself. VIX ETN’s There are many VIX-derived exchange traded products, the most popular of which is the iPath S&P 500 VIX ST Futures ETN (VXX). The VXX aims to deliver the return of the S&P 500 VIX Short-Term Futures Index. Many traders also follow the Credit VelocityShares Daily 2x VIX ST ETN (TVIX), which aims to deliver twice the daily return of the S&P 500 VIX Short-Term Futures Index. VIX ETN’s can be bought and sold like stocks. However, they only appropriate for short-term trading since they don’t track the VIX — they track VIX futures, which tend to naturally fall over time. Here’s a direct excerpt from the VXX prospectus: The index underlying your ETNs is based upon holding a rolling long position in futures on the VIX Index. These futures will not necessarily track the performance of the VIX Index. And for technical reasons related to the VIX futures term structure, they tend to decline over time: On the flip side, shorting these instruments over the long run is not easy because of margin requirements and other issues. Plain Old SPY Options The easiest way to trade changes in the VIX may be to just trade SPY options. They’re very liquid and easy to trade with none of the complex mechanics involved with VIX futures, options, and ETN’s. For example, if you think the VIX is set to increase sharply, rather than messing with VIX products, you could simply buy SPY put options. Why? Because a higher VIX means higher put options prices. Remember, the VIX is a measure of implied volatility on S&P 500 options. And all things being equal, when implied volatility goes up, options prices go up. (click here for a primer on implied volatility) And on the flip side, to speculate on a falling VIX, one could simply buy SPY call options, since a falling VIX is typically associated with rising stock prices. Sure, the VIX products are sexier and more exciting, but for newcomers to trading, simpler is often better.
Continue Reading -->Weekly Sentiment Update: The Bears Are Still Raging!
Permabulls always say everyone’s bearish. And permabears always say everyone’s bullish. But let’s look at the actual numbers to see how the crowd actually feels. Last week, traders were definitely feeling bearish. We had an inverted VIX curve, big put option demand, and significant negativity among individual investors. Now that the S&P 500 is slamming up towards last week’s highs, let’s take a fresh look at the numbers. 1) VIX Spread – Bearish The VIX is dropping, and the 3-month spread is at +1.0. This shows that traders are moderately bearish. Related: read our primers on VIX basics and VIX curves. 2) CNN Fear & Greed Index – Bearish The Fear & Greed Index is at 34, up slightly from 28 last week. F&G operates on a 1-100 scale, and a reading of 34 means traders are moderately bearish. 3) AAII Sentiment – Bearish The latest AAII Sentiment Survey shows that 25.7% of individual investors are bullish, down from 29% last week. This is well below the long-term average of 38.5%. 4) CBOE Equity Put-Call – Neutral The CBOE Equity-Put Call ratio was at 0.70 yesterday with a 3-day moving average is 0.64. This is indicates that traders are basically neutral. I expect this number to shrink by today’s close. 5) ISE Sentiment – Neutral The ISE Sentiment Index is at 92 (92 calls bought for every 100 puts). The 10 day moving average is just 84.4. So the recent trend shows higher put option demand. However, I’ll actually call this neutral because the ISE Sentiment index has been so down for so long, that today’s 92 reading actually counts as pretty neutral activity. Please note: I am strongly considering dumping ISE Sentiment from this weekly update simply because it’s almost always reading bearish no matter what happens in the market. I may replace it with the CBOE Skew Index, which measures how much traders are paying for protection against tail risk. Conclusion Out of 5 sentiment indicators, we have: 0 bullish 3 bearish 2 neutral We’re not seeing much change from last week’s sentiment report. So my market thesis is unchanged too — I think we could be stuck in a range for a while, though I’ll add I see a better chance of a breakout to new all-time highs than a sharp decline. The current action is reminiscent of last summer, when we consistently had mixed-to-bearish sentiment and stock prices that looked stretched. The result was a seemingly endless sideways grind, because bearish sentiment and high valuations are a good recipe of a whole lotta nothing. The bear case remains the same — what goes up must come down. So the question is whether market volatility has been low enough for a long enough time for a trend change to actually occur. When that changes, I don’t know. But the fact that traders are so bearish implies that the snoozefest could go on for quite a while.
Continue Reading -->TETF: A Cosmo Kramer Approach to ETF Investing?
In recent years, investors have been plowing mountains of dough into passive index ETF’s. Why? Because actively-managed mutual funds and hedge funds have 2 major disadvantages: 1) Poor performance 2) Higher expenses So when the ETF Industry Exposure & Financial Services ETF (TETF) launched today, I couldn’t help but take a close look at this new ETF. This new fund follows the Toroso ETF Industry Index, which provides exposure to publicly-traded companies in the ETF industry. My initial thought was that it sounds like Cosmo Kramer’s coffee table book about coffee tables: But Kramer’s book overdelivered on its promise — not only is the book about coffee tables, but the book itself is a coffee table. Meanwhile, TETF is a plain-vanilla bank/brokerage industry ETF using a hot keyword for marketing purposes. Here is a breakdown of the fund holdings from the press release: Tier 1, 50% of the Index’s exposure, is made up of companies with substantial participation in the ETF industry, providing direct financial impact to shareholders, including BlackRock, Charles Schwab, Invesco, State Street, WisdomTree, and more. Tier 2, 25% of the index’s exposure, is made up of companies with substantial participation in the ETF industry, providing indirect financial impact to shareholders, including KCG Holdings, NASDAQ, Intercontinental Exchange, Inc., and more. Tier 3, 15% of the Index’s exposure, is made up of those companies with moderate levels of participation in industry, including Bank of New York Mellon, US Bancorp, FactSet, Ameriprise Financial, and more. Tier 4, approximately 10% of the Index’s exposure, includes companies that are new or participating in a smaller way in the ETF industry relative to their overall focus, and includes such names as Morningstar, Eaton Vance, Goldman Sachs, Legg Mason, Citigroup, and more. The problem is there are very few pure ETF companies, aside from WisdomTree (WETF). According to BlackRock’s (BLK) most recent quarterly earnings report, just 37% of its assets are ETF’s. And many of these companies, like State Street (STT) and Invesco (IVZ) have plenty of exposure to actively managed mutual funds — the very market the ETF business is supposed to be killing. So I can’t see a reason to consider TETF over something like XLF. XLF has a much lower expense ratio (0.14% vs. 0.64% for TETF), plus it’s more liquid, it’s optionable, and it has a long trading history. And odds are they’re going to have pretty similar performance over the long run anyway. This is why it’s important to take a deep look at trendy ETF’s — odds are there’s already something on the market that does the same job at a lower price with better liquidity. On a related topic, within the next 2 years, expect to see plenty of mediacal marijuana/canabis, virtual reality, and biohacking funds that are ordinary ETF’s covered in the buzzword of the day.
Continue Reading -->How to Use the VIX Curve to Judge the Market’s Mood
Many traders view the VIX — formally known as the Chicago Board Options Exchange Volatility Index –as a stress gauge for the market. (click here for an introduction to the VIX) But knowing the level VIX alone isn’t very helpful, and it has little value as a predictor of price. One way of getting real value out of the VIX is comparing it to the prices of VIX futures. The VIX uses implied volatility levels on a variety of S&P 500 options expiring in 30 days to estimate traders’ expectations of volatility. So if we compare the VIX with prices of VIX futures expiring later in time, we can get an idea of the market’s mood. We do this by looking at the VIX curve, which is a plot of VIX future prices by expiration. Typically, the VIX curve slants up and to the right because the prices of later-dated futures are higher. Here’s an example from VIXCentral.com: This is called a state of contango. If you think about VIX futures as insurance, this makes perfect sense. Why? Because when there’s more time to expiration, there’s more of a chance that insurance will pay off. If you want to buy VIX futures because you think the VIX will spike 25%, you have a far greater chance of having your bet pay off if you have 6 months to expiration rather than 3. Therefore, the seller of VIX futures will charge higher prices for later-dated futures. On the flip side, occasionally, the VIX curve will invert — or enter what is called backwardation. Here is an extreme example from August 24, 2015, when the market had a mini-crash: As you can see, the near-term VIX futures prices are higher than the later-dated ones. This means that traders expect so much near-term volatility that they’ll pay tremendous amounts of money for VIX futures that are close to expiration. So how can you make sense of all this? One good rule of thumb is to use the 3-month VIX curve as a proxy for fear in the market. This is calculated by taking the VIX future expiring in 90 days, and subtracting the VIX spot price from it. So if the VIX future expiring in 90 days is priced at 15 and the VIX spot price is 11, the 3-month curve is calculated as +4. And if the VIX future expiring in 90 day is priced at 14 and the VIX spot price is 15, then the 3-month curve is priced at -1. Generally speaking, here are some 3-month VIX curve levels you can use to determine how optimistic or fearful traders are. +5: Traders are extremely bullish and in danger of being complacent +4: Traders are very bullish +3: Traders are optimistic +2: Traders are neutral +1: Traders are moderately bearish 0 or below: Traders are very fearful Just keep in mind that as with all sentiment indicators, the VIX curve should not be used a buying or selling indicator on its own. Rather, it should be considered as another potentially helpful tool in your decision making process.
Continue Reading -->Weekly Sentiment Update: Bears Are Everywhere and They’re Killing Volatility!
Permabulls always say everyone’s bearish. And permabears always say everyone’s bullish. But let’s look at the actual numbers to see how the crowd actually feels. In last week’s sentiment update, the data indicated that traders had gone bearish even before the US missile attack on Syria and the nonfarmpayrolls miss. Yesterday, we clearly saw even more bears coming out of their caves. So let’s take a complete look at where we stand ahead of the long holiday weekend. 1) VIX Spread – Bearish The VIX is near a 6-month high and the 3-month curve has inverted. Typically, we see this after the market gets wrecked — not when the SPX is less than 3% off all-time highs. This is definitely bearish. 2) CNN Fear & Greed Index – Bearish The Fear & Greed Index is at 28, down from 43 last week. F&G operates on a 1-100 scale, and a reading of 28 means traders are most definitely fearful. 3) AAII Sentiment – Bearish The latest AAII Sentiment Survey shows that 29% of individual investors are bullish, up slightly from last week’s 28.3% reading. This is well below the long-term average of 38.5%. 4) CBOE Equity Put-Call – Bearish The CBOE Equity-Put Call ratio was at 0.69 yesterday with a 3-day moving average is 0.70. This is indicates that traders are bearish. 5) ISE Sentiment – Neutral The ISE Sentiment Index is at 139 (139 calls bought for every 100). The 10 day moving average is just 87. So the recent trend shows higher put option demand. However, I’ll actually call this neutral because the ISE Sentiment index has been so down for so long, that today’s 139 reading counts as pretty bullish activity. Please note: I am strongly considering dumping ISE Sentiment from this weekly update simply because it’s almost always reading bearish no matter what happens in the market. I may replace it with the CBOE Skew Index, which measures how much traders are paying for protection against tail risk. Conclusion Out of 5 sentiment indicators, we have: 0 bullish 4 bearish 1 neutral This is reminiscent of last summer, when we consistently had mixed-to-bearish sentiment and stock prices that looked stretched. The result was a seemingly endless sideways grind, because bearish sentiment and high valuations are a good recipe of a whole lotta nothing. The bear case certainty seems the same — what goes up must come down. So the question is whether market volatility has been low enough for a long enough time for a trend change to actually occur. Here a chart of the S&P 500 along with realized volatility from last July. I marked the Snooze Periods so you can see just how long the present on has persisted: As you can see, it’s been trending down since October — that’s a pretty long stretch considering how much news we’ve gotten. When the trend changes, I don’t know. We’ve had catalyst after catalyst and the market’s shrugged it all off. There’s been the Fed, a lot of economic data and news, a heavy flow of political news, and an explosion in geopolitical tensions. But the fact that traders are so bearish implies that the snoozefest could go on for quite a while.
Continue Reading -->Do you Love the Smell of Fear in the Morning?
Napalm, son. Nothing else in the world smells like that. I love the smell of napalm in the morning. -Lieutenant Colonel Bill Kilgore, Apocalypse Now It looks like traders are starting to worry about serious downside. Yesterday, I pointed out that safety assets were showing big gains amid rising geopolitical tensions. Today, the VIX jumped over 16 for the first time since November 10, 2016. And the VIX is stil trading as a massive premium to actual market volatility. And one of my favorite sentiment indicators — the CBOE Equity Put/Call ratio — skyrocketed to 0.79 yesterday. This is well above the YTD average of 0.65. As you can see in the chart below, we’ve seen 4 spikes to similar levels in the past 5 months. And all of those spikes occurred near interim lows in the S&P 500. Traders can rarely use sentiment indicators as buy/sell signals. They tend to only be useful at extremes. For the CBOE Equity Put/Call, a 0.79 is an outlier, but not a major league freakout. Nonetheless, this latest reading implies that traders are rapidly pricing a lot of fear into the market. When I complete my next Weekly Sentiment Update tomorrow, we should see even more bearishness than last week. The big question now becomes: is a lot of fear enough fear to form a bottom?
Continue Reading -->Weekly Sentiment Update: The Bears Were on Patrol, Even Before Syria and the Weak Jobs Report
Permabulls always say everyone’s bearish. And permabears always say everyone’s bullish. But let’s look at the actual numbers to see how the crowd actually feels. With the US missile attack on Syria and the NFP report miss, now is the perfect time for a sentiment update. Last week, the bears were out in force as we digested near all-time highs. But with the bulls still holding steady, let’s see if anything’s changed. 1) VIX Spread – Neutral The VIX spiked a bit post-Syria, but interestingly enough, it’s now DOWN on the day — even after the NFP miss. That has the 3-month VIX spread is at +2.16 which indicates that traders are starting to grow skittish. Readings around +2 are neutral. 2) CNN Fear & Greed Index – Bearish The Fear & Greed Index is at 43, up slightly from 34 last week. F&G operates on a 1-100 scale, and a reading of 43 means traders are moderately fearful. 3) AAII Sentiment – Bearish The latest AAII Sentiment Survey shows that 28.3% of individual investors are bullish, down from 30.2% last week. This is well below the long-term average of 38.5%. 4) CBOE Equity Put-Call – Bearish The CBOE Equity-Put Call ratio was at 0.66 yesterday with a 3-day moving average is 0.63. This is indicates that traders are slightly bearish. 5) ISE Sentiment – Neutral The ISE Sentiment Index is at 108 (108 calls bought for every 100). The 10 day moving average is just 90. This indicates that demand for put options continues to outstrip that for calls. However, I’ll actually call this neutral because the ISE Sentiment index has been so down for so long that 90 is actually high relative to recent history. Please note: I am strongly considering dumping ISE Sentiment from this weekly update simply because it’s almost always reading bearish no matter what happens in the market. I may replace it with the CBOE Skew Index, which measures how much traders are paying for protection against tail risk. Conclusion Out of 5 sentiment indicators, we have: 0 bullish 3 bearish 2 neutral This shows even more bearishness than last week. Note that the all of these indicators except for the VIX spread, were released BEFORE the attack on Syria and the nonfarm payrolls miss. So it’s not like the market was necessarily braced for good news, even though traders were optimistic about NFP because of the recent ADP and jobless claims beats. It is indeed possible that the next readings of the 4 others may grow more bearish in the near future. And interestingly enough, the SPX just slipped into the green, thoguh small caps and banks are underperforming. It should be an interesting day, to say the least…
Continue Reading -->Scott Redler Discusses the Market Complexion with CNBC
In yesterday’s Market Insider Column with Patti Domm on CNBC.com, T3 Live Chief Strategic Officer Scott Redler broke down yesterday’s weak market action in the aftermath of the release of the Fed’s March Meeting Minutes: The real test is whether the market will fall below and close below the 50-day moving average, which it hasn’t done since Election Day. That would be a signal the complexion has changed, and that would breed more caution,” said Scott Redler, partner with T3Live.com. Redler, who follows the market’s short-term technicals, said the dramatic reversal in the S&P 500 Wednesday may be a forewarning of more turbulence to come. “When you break key levels and hold them, it’s a constructive signal for the bulls. If you push above levels and it fails, it could give you some clues that there’s more weakness to come. The banks and small caps were giving clues even before the Fed said the market is quite high,” said Redler. Click here to read the full article on CNBC.com, which also includes commentary from market legend Art Cashin, who serves as director of floor operations at UBS.
Continue Reading -->