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Proactive Spreads, March 22nd, 2018 - ADBE, AMZN, MA

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Markets are getting a little looser. The headlines say "trade war" but the true narrative driving price is Fed voodoo. Yesterday there was a Fed meeting that led to a small amount of strength that was aggressively faded throughout the rest of the day and into the overnight session.

My base case is currently reversion, yet the longer price is "accepted" at current levels, the fewer buyers will be in control, which could potentially lead to a loss of 2600. Both the Nasdaq and Russell 2000 are holding up much better, and that may help reinforce the "trade war" narrative that's pushing forward.

Right now my trade strategy remains to sell put spreads into pullbacks on good relative strength names.

Trade #1: ADBE

Great earnings report, the stock has been in a solid uptrend for months. The conversion to a SAAS company has definitely helped their model. I"m looking for a retest of the most recent pivot high.

Trade Setup

Expected Price: 210

Sell to Open ADBE May 190/185 Put Spread

Tier 1: Enter at 0.70, Exit at 0.20

Tier 2: Enter at 1.00, Exit at 0.50

Tier 3: Enter at 1.30, Exit at 0.80

Trade #2: AMZN

Looking for a pull into the rising 50 day moving average.

Trade Setup

Expected Price: 1470

Sell to Open AMZN May 1260/1250 Put Spread

Tier 1: Enter at 1.20, Exit at 0.20

Tier 2: Enter at 1.80, Exit at 0.80

Tier 3: Enter at 2.40, Exit at 1.40

Trade #3: MA

Looking for the 50 day moving average and prior support.

Trade Setup

Expected Price: 170

Sell to Open MA May 155/150 Put Spread

Tier 1: Enter at 0.70, Exit at 0.20

Tier 2: Enter at 1.00, Exit at 0.50

Tier 3: Enter at 1.30, Exit at 0.80

 

 

Disclaimer

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