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Proactive Spreads, July 5th 2017 – NFLX, TSLA

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I hope you all had a wonderful, relaxing break away from the markets!

We’re looking at a chart of the Nasdaq 100, which has significantly deteriorated since I started looking for further weakness last month.

This correction is rotational in nature. While tech is getting hit, banks and small cap stocks are seeing a ton of money flow. Normally when a “big correction” hits, it takes everything with it. The fact that only particular sectors are seeing weakness is still a fairly bullish sign.

Trade #1: NFLX

This is a carryover from a previous trade idea, but because earnings are up soon and enough time has gone on, we need to change up the trade setup.

Trade Setup

Expected Price: 145

Sell to Open NFLX Aug 125/120 Put Spread

Tier 1: Open at 0.65, Close at 0.15

Tier 2: Open at 0.95, Close at 0.65

No Tier 3 Until After Earnings

Trade #2: TSLA

We played this back on the short side on June 8th, and it worked out great. Now I’m looking for a pull into the 50 day moving average, as well as previous resistance becoming support.

Trade Setup

Expected Price: 330

Sell To Open TSLA Aug 280/275 Put Spread

Tier 1: Open at 0.90, Close at 0.30

Tier 2: Open at 1.30, Close at 0.90

No Tier 3 Until After Earnings

Disclaimer

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