As of Sunday evening, markets are gapping higher on the back of French election results.
Again, it doesn’t matter what the actual results are, simply that another “speed bump” of uncertainty has gone away.
A gap and hold above 2360 would indicate that it is a catalyst breakout, and given the fact that we haven’t seen a strong move in two months, the trend can easily resolve higher.
If the gap fails miserably and we finish back at Friday’s levels, that will be indicative of a move to 2300.
Trade #1: GS
The stock gapped into support off of earnings. It’s possible that it continues to see some movement to the downside, but this is a good place to initiate some long exposure.
Expected Price: 215
Sell to Open GS Jun 195/190 Put Spread
Tier 1: Open at 0.60, Close at 0.10
Tier 2: Open at 1.00, Close at 0.60
Tier 3: Open at 1.40, Close at 1.00
Trade #2: RUT
Looking to pull some income out of this index. It hasn’t moved much this year, but over the past week has started to outperform the S&P. We’ll use a stop on this one.
Expected Price: 1380
Sell to Open RUT Jun 1320/1310 Put Spread
Tier 1: Open at 1.80, Close at 0.50
Tier 2: Open at 2.50, Close at 1.80
No Tier 3
Stop out On a close Under 1340