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Proactive Spreads, April 23rd, 2018 - GLD, GS

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The market structure is playing out in the "rangebound garbage" scenario.

The market finally cleared 2650, filled the gap just above 2700, and then faded hard to the top of the range.

It's to be expected in this kind of market. It's not a trend, just high-reversion as we auction higher and lower to establish the bounds of this multimonth range.

There's been a handful of setups triggered recently, and so far they're all working well.

This week is slammed with earnings reports, and unless a new "macro" event takes back the narrative, watch for these large-cap tech stocks dictate direction in the near term. Especially GOOGL and AMZN.

Trade #1: GLD

 

Looking for a test of the lower end of this year's trading range.

Trade Setup

Expected Price: 123.50

Sell to Open Jun 120/117 Put Spread

Tier 1: Enter at 0.40, Exit at 0.10

Tier 2: Enter at 0.60, Exit at 0.30

Tier 3: Enter at 0.80, Exit at 0.50

Trade #2: GS

This is an update to an existing setup (April 9th), but because enough time has gone on, we need to change the duration and strikes.

Trade Setup

Expected Price: 235

Sell to Open GS Jun  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

Disclaimer

U.S. GOVERNMENT REQUIRED DISCLAIMER - COMMODITY FUTURES TRADING COMMISSION. FUTURES AND OPTIONS TRADING HAS LARGE POTENTIAL REWARDS, BUT ALSO LARGE POTENTIAL RISK. YOU MUST BE AWARE OF THE RISKS AND BE WILLING TO ACCEPT THEM IN ORDER TO INVEST IN THE FUTURES AND OPTIONS MARKETS. DON'T TRADE WITH MONEY YOU CAN'T AFFORD TO LOSE. THIS WEBSITE IS NEITHER A SOLICITATION NOR AN OFFER TO BUY/SELL FUTURES OR OPTIONS. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE DISCUSSED ON THIS WEBSITE. THE PAST PERFORMANCE OF ANY TRADING SYSTEM OR METHODOLOGY IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY, SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN