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Proactive Spreads, June 13, 2019 – DIS, AAPL, VMW

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Take the headline risk away. All the tweets and tarriffs… and the market is trading logically. It bounced at support, and is selling off at the key level of 2900. This supports my theory that the market has shifted from a one-direction kind of trade to higher reversion. More sector rotation and individual stocks moving outside the market.

Right now, this is setup for a failed breakout. The market took out the pivot highs, but sellers have shown up in earnest any push above that level.

Trade #1: DIS

DIS is working out a base and, odds are, will trade higher into its next earnings event. Look for the dips to be bought and for the stock to ramp as Disney+ gets launched.

Trade Setup

Expected Price: 135.72

Sell to Open Aug 125/120 Put Spread

Tier 1: Enter at 0.74, Exit at 0.24

Tier 2: Enter at 1.04, Exit at 0.54

Tier 3: Enter at 1.34, Exit at 0.84

 

Trade #2: AAPL

This is too obvious of a short level. Instead, look for the second push to fill the gap at 200 to scale into bear call spreads.

Trade Setup

Expected Price: 200.72

Sell to Open AAPL Jul 215/220 Call Spread

Tier 1: Enter at 0.65, Exit at 0.05

Tier 2: Enter at 0.95, Exit at 0.45

Tier 3: Enter at 1.25, Exit at 0.75

 

Trade #3: VMW

VMW broke out its base and ran 70 points, only to see a nasty gap down on earnings. I’m looking for a rally to the earnings high to start fading.

Trade Setup

Expected Price; 185

Sell to Open VMW Jul 195/200 Call Spread

Tier 1: Enter at 0.90, Exit at 0.40

Tier 2: Enter at 1.20, Exit at 0.70

Tier 3: Enter at 1.50, Exit at 1.00

Disclaimer

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