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.
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.
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