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Proactive Spreads, July 19th, 2018 – CSX, UAL

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It’s pretty slow out there. We’re seeing rotation back into financials and industrials, and next week is basically a huge earnings bonanza.

That’s right, I said bonanza.

I still think that the market is going to grind up into 2850. The Nasdaq has already hit new highs, and smallcaps are within spitting distance.

The simplest trade here is to look for the big earnings breakouts and play the first pullback. It may just end up being that simple, and it’s the main strategy I’ll be pursuing over the next few weeks.

Trade #1: CSX

CSX beat on earnings, good revenue growth and had a breakout to new highs. I expect the earnings low to hold here.

Trade Setup

Expected Price: 68.24

Sell to Open CSX Aug 65/62.50 Put Spread

Tier 1: Enter at 0.30, Exit at 0.05

Tier 2: Enter at 0.50, Exit at 0.20

No Tier 3, Potentially roll to September.

Trade #2: UAL

Same premise here. Strong move, look for a pullback. It may take a couple days or maybe a week for it to happen.

Trade Setup

Expected Price: 80

Sell to Open UAL Sep 72.50/70 Put Spread

Tier 1: Enter at 0.35, Exit at 0.10

Tier 2: Enter at 0.50, Exit at 0.25

Tier 3: Enter at 0.65, Exit at 0.40

Disclaimer

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