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Full Time Profits, November 16th, 2018 – SBUX, PG, ADBE

November 16, 2018 By Steven Place

After volatiltiy spikes, both to the upside and downside, the market will attempt to reach a new equillibrium where buyers and sellers can agree on price.

During aggressive selloffs, this leads to a whippy, volatile range with aggressive rallies and selloffs where there is no bid in sight.

Something of note- all major moving averages are clustered around each other, with plenty of moving average crosses that are going on and will continue. On multiple timeframes there are crosscurrents and confusion.

As it stands right now, there is no evidence to suggest any kind of trend, either higher or lower. Odds are, it’s going to be “garbage tape” with continued probes higher and lower until the market establishes a new kind of equillibrium. We’ve seen this before, go look at Jan-Mar of this year, Jan-Feb of 2016, Aug-Oct of 2015, and Fall of 2011.

Trade #1: SBUX

This is one name that is showing great relative strength. It had solid earnings and is hitting 52 week highs. I want to see a test of the post-earnings high to initiate a trade.

Trade Setup

Expected Price: 66

Sell to Open SBUX Jan 62.50/60 Put Spread

Tier 1: Enter at 0.45, Exit at 0.15

Tier 2: Enter at 0.60, Exit at 0.30

Tier 3: Enter at 0.75, Exit at 0.45

Trade #2: PG

Another relative strength play. Looking for a pullback to the most recent range and the rising 20 day moving average (in blue).

Trade Setup

Expected Price: 91.59

Sell to Open PG Jan 87.50/85 Put Spread

Tier 1: Enter at 0.45, Exit at 0.15

Tier 2: Enter at 0.60, Exit at 0.30

Tier 3: Enter at 0.75, Exit at 0.45

Trade #3: ADBE

ADBE is one of the last tech holdouts during this market selloff, and to me it looks to be holding on by a thread. The stock has tested this support level about 7 times, and the more times a support level is tested, the higher the odds of a breakdown.

I’m not sure my target will get hit, but I want to be prepared just in case tech takes another dump.

Trade Setup

Expected Price: 221

Sell to Open ADBE Jan 195/190 Put Spread

Tier 1: Enter at 0.95, Exit at 0.45

Tier 2: Enter at 1.25, Exit at 0.75

Tier 3: Enter at 1.55, Exit at 1.05

Disclaimer

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