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Full Time Profits, April 9th, 2018 – GS, NKE, RUT, MSFT

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I’m not sure “choppy” is the right way to describe the market.

“Choppy” would be a few days back and forth without a whole lot of movement.

This… 2% moves. I guess it could be called choppy but it’s gotta be a really big knife.

We have a condition where the market is trendless, yet the actual volatility in the market is very high. Current volatility is just above 20%, and the previous “event” that had readings this high was the big selloff in 2016.

My basic thought is this… the longer we stay in this range, the higher the odds we see a rollover and a retest/break of the low. If you want to be bullish, you should see rejection of lower prices and acceptance of higher prices… and we simply haven’t seen that.

If the market manages to get and hold above 2670 then there’s a chance of a massive squeeze up to 2750, but until that happens any price action under that should be considered trend deterioration.

The main catalyst from the past few weeks has been tarriffs and trade. Certainly a large, macro-driven event… but we’re coming into earnings season. Single stock risk will come back into play, and for me the bullish case here is that if earnings and margins are still good then the economic saber rattling will take a back seat to earnings growth.

Right now, the best play for new trades is to start planning for a flush.

Trade #1: GS

Looking for a break of the Feb lows and a retest of the Oct/Nov support. Yes, I know that’s far away but for me the risk/reward isn’t in play unless we come into that level.

Trade Setup

Expected Price: 235

Sell to Open May 215/210 Put Spread

Tier 1: Enter at 0.80, Exit at 0.30

Tier 2: Enter at 1.10, Exit at 0.60

Tier 3: Enter at 1.40, Exit at 0.90

Trade #2: NKE

I want a push to the lower end of the range again.

Trade Setup 

Expected Price:  63.17

Sell to Open NKE May 60/57.50 Put Spread

Tier 1: Enter at 0.40, Exit at 0.10

Tier 2: Enter at 0.55, Exit at 0.30

Tier 3: Enter at 0.70, Exit at 0.40

Trade #3: RUT

Look for a retest of the Feb lows to start scaling into new put spreads. With this one you want a FLUSH, not a slow drip down.

Trade Setup

Expected Price: 1450

Sell to Open May 1360/1355 Put Spread

Tier 1: Enter at 0.80, Exit at 0.30

Tier 2: Enter at 1.10, Exit at 0.60

Tier 3: Enter at 1.40, Exit at 0.90

Trade #4: MSFT

Similar premise: looking for a flush to retest the lows.

Trade Setup

Expected Price: 84

Sell to Open MSFT May 80/75 Put Spread

Tier 1: Enter at 0.90, Exit at 0.40

Tier 2: Enter at 1.20, Exit at 0.70

Tier 3: Enter at 1.50, Exit at 1.00

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