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Full Time Profits, July 9th 2018 – NKE, COP, RUT

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Today’s price action is confirming that, so far, the most recent move lower was simply a shakeout.

Think about the original trade thesis we’ve been working with for months– the market is working through a large, multi-month range.

As it stands, the upper end of the range is 2800, and the lower is around 2600.

If the S&P 500 can confirm a move above 2800, then we should expect new highs. This is already being confirmed in smallcaps, while the Dow is a serious laggard due to trade war risk.

(Speaking of the Dow, the level I’m watching for upside confirmation is around 25,400.)

My bias still remains higher, but I don’t think it will be the same kind of price action we saw in 2017. More volatility, more back and forth.

Trade #1: NKE

Great move on earnings, the stock has faded to nearly half of the gap higher. I’m expecting these levels to hold and the stock to make a rn back to 80.

Trade Setup

Expected Price: 77.11

Sell to Open NKE Aug 72.50/70 Put Spread

Tier 1: Enter at 0.24, Exit at 0.04

Tier 2: Enter at 0.40, Exit at 0.10

No Tier 3, May Need To Roll to Sep.

Trade #2: COP

Conoco is the strongest large cap oil name. I’m expecting continuation higher into its earnings event.

Trade Setup

Expected Price: 70.77

Sell to Open COP Aug 65/62.50 Put Spread

Tier 1: Enter at 0.31, Exit at 0.06

Tier 2: Enter at 0.50, Exit at 0.25

No Tier 3 – Earnings

Trade #3: RUT

The Russell 2000 Index is up 3.5% over the past 5 days. Starting to get a little overbought here.

I think trying to short into obvious resistance is too obvious and too crowded. Instead, I want to see an extension above the most recent levels as the early shorts get smoked.

Trade Setup

Expected Price: 1730

Sell to Open RUT Aug 1790/1795 Call Spread

Tier 1: Enter at 0.75, Exit at 0.25

Tier 2: Enter at 1.05, Exit at 0.55

Tier 3: Enter at 1.35, Exit at 0.85

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