US markets really aren’t showing the global carnage that’s going on. Emerging markets are getting hit, European banks are getting smoked, and the Turkish Lira is getting smoked.
There’s talk of contaigion. That all this global instability will spillover and we’ll have a 1997 event.
I’m not seeing it yet. Markets are too strong, and there’s a LOT of back and fill that can happen between now and then.
The simplest thing to do is focus on liquid stocks in solid uptrends and look for some blood. We don’t need a crash, just a little shake and bake at these levels.
Trade #1: SPX
And the best place for liquidity is going to be the index itself.
2800 is the key pivot level, which coincides with the rising 50 day moving average.
I think a lot of eyeballs are on that level, and it’s a “rookie” level… meaning that buying right at that level will not give you the best risk reward.
Instead, I’ve got my sights set on the gap fill from early July. If we can get that, especially quickly, then that will give us great risk reward.
Expected Price: 2760
Sell to Open SPX Sep 2670/2665 Put Spread
Tier 1: Enter at 0.70, Exit at 0.20
Tier 2: Enter at 1.00, Exit at 0.50
Tier 3: Enter at 1.30, Exit at 0.80
Trade #2: COP
We have had continued success with this name, and it still remains the strongest large cap oil in the space. I’m looking for a pull into the halfway point of the trading range– that second yellow line on the chart.
Expected Price: 67.50
Sell to Open COP Sep 62.50/60 Put Spread
Tier 1: Enter at 0.30, Exit at 0.05
Tier 2: Enter at 0.45, Exit at 0.20
Tier 3: Enter at 0.60, Exit at 0.30