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Proactive Spreads, July 1st, 2019 – GLD, TWLO, ROKU

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Markets popped over the weekend on some bullish G20 news and that the trade war, for now, has stalled out.

For most of the trading session, there was a rejection of prices at these levels yet into the afternoon volume came in aggressively and held the market up.

This is bullish price action, especially when liquidity tends to be lower during the summer. Stocks are not extended and enough time has gone on where new buyers can easily get the market back above 3000.

Right now, I’m stalking the stealth correction seen in SAAS stocks. This makes sense– it’s normal reversion and I want to take advantage of any second correction lower.

Trade #1: GLD

Last month we nailed the top in gold, and now I’m looking to play it on the other side. Any push into that lower gap fill will find buyers.

Trade Setup

Expected Price: 128.75

Sell to Open GLD Aug 124/122 Put Spread

Tier 1: Enter at 0.29, Exit at 0.01

Tier 2: Enter at 0.41, Exit at 0.16

Tier 3: Enter at 0.53, Exit at 0.28

 

Trade #2: TWLO

This stock saw a failed breakout higher on a momentum divergence. I’m looking for a retest of the lower end of the range.

Trade Setup

Expected Price: 122

Sell to Open TWLO Aug 100/95 Put Spread

Tier 1: Enter at 0.75, Exit at 0.05

Tier 2: Enter at 1.05, Exit at 0.35

Tier 3: Enter at 1.35, Exit at 0.65

 

Trade #3: ROKU

ROKU was drastically overbought and has since corrected. I’m looking for a retest of the rising 50 day moving average.

Trade Setup

Expected Price: 87

Sell to Open ROKU Aug 65/60 Put Spread

Tier 1: Enter at 0.76, Exit at 0.06

Tier 2: Enter at 1.06, Exit at 0.36

Tier 3: Enter at 1.36, Exit at 0.66

 

 

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