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Full Time Profits, April 20th 2017 – IBM, NFLX

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The best way to characterize this market is a “slow bleed.”

There hasn’t really been any capitulation on the indexes, and a handful of mega-cap stocks are keeping the S&P and Nasdaq afloat.

My thesis is still the same– the longer the S&P 500 holds under 2360, the higher the odds that we see a correction.

Yet my “gut feel” here is that the anxiety is not from people owning stock, it’s from the cash on the sidelines. I know I feel it… if the market pops then I’m left behind again, missing out on profits.

On the institutional side, we may see a trade where the markets get jammed back higher due to that anxious cash.

Trade #1: IBM

Very strong gap lower on IBM. Look for a lower low at 158 to sell some spreads.

Trade Setup

Expected Price: 158

Sell to Open IBM Jun 150/145 Put Spread

Tier 1: Open at 0.60, Close at 0.10

Tier 2: Open at 0.90, Close at 0.60

Tier 3: Open at 1.20, Close at 0.90

Trade #2: NFLX

NFLX is a touch weak after its earnings event, and has been in the tightest range we’ve seen in a while. I’m looking for the gap at 133 to get filled and act as support, then a reversal into the previous range.

Trade Setup

Expected Price: 135

Sell to Open NFLX Jun 125/120 Put Spread

Tier 1: Open at 0.80, Close at 0.30

Tier 2: Open at 1.10, Close at 0.80

Tier 3: Open at 1.40, Close at 1.10

Disclaimer

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