While the Dow and S&P are breaking to new highs, I think the better market to watch is the Nasdaq. Large cap tech got hit pretty hard this summer, with indications of distribution. I want to see how price acts at 142.50 and whether it’s rejected or accepted.
Trade #1: FB
The stock has begun a pre-earnings rally. As the stock moves higher I am ready to short some call spreads… odds are the stock will “price in” good news into earnings so I’m comfortable taking some of that risk.
Expected Price: 160
Sell to Open FB Aug 170/175 Call Spread
Tier 1: Open at 0.73, Close at 0.23
Tier 2: Open at 1.03, Close at 0.73
No Tier 3 Until After Earnings