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Proactive Spreads, June 22nd – CELG, CAT

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Market is undergoing a rotational, time-based correction. Unless we lose 2400, overall trend remains in tact.

There’s still more weakness in the Nasdaq 100, and I am holding out hope that we see further weakness continue there. We’ve seen 134 days in a row where the Nasdaq has closed above its 50 day moving average. This streak is an all-time record. It’s possible we just go sideways and vol stays low but I’m making offerings to the market gods that we get a little more selling in tech.

Trade #1: CELG

Massive volatility pivot in biotech over the past two weeks. I’m expecting trend continuation, after a small pullback.

Trade Setup

Expected Price: 131

Sell to Open CELG Aug 120/115 Put Spread

Tier 1: Enter at 0.70, Close at 0.50

Tier 2: Enter at 1.00, Close at 0.70

Tier 3: Enter at 1.30, Close at 1.00

Trade #2: CAT

Looking for a pullback into the 50 day moving average.

Trade Setup

Expected Price: 101.89

Sell To Open CAT Aug 92.50/90 Put Spread

Tier 1: Enter at 0.35, Close at 0.15

Tier 2: Enter at 0.50, Close at 0.35

Tier 3: Enter at 0.65, Close at 0.50

Disclaimer

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