Markets continue their grind higher. This feels like summer trading combined with a perceived narrative in the markets.
First, we have earnings coming up… starting this week. Second, we have the Fed cut at the end of the month.
Yes, cut. It’s already priced in. The Fed Funds Futures are at a 100% chance of a cut. If you think they won’t cut, then you can make a boatload of money going against the market.
This is a buy the rumor sell the news kind of event. If the market is jamming higher into the end of the month, that will be a good time to start getting aggressively short. Until then, it’s best to focus on pullbacks in relative strength stocks.
Trade #1: DIS
I think DIS will continue to trade up into 150. Any dips are buyable as anyone who missed the boat on the breakout will be adding to positions into any dip.
Expected Price: 143
Sell to Open DIS Sep 135/130 Put Spread
Tier 1: Enter at 0.78, Exit at 0.28
Tier 2: Enter at 1.08, Exit at 0.58
Tier 3: Enter at 1.38, Exit at 0.88
Trade #2: COST
This is the strongest stock on my screeners. Definitely due for a retracement of the most recent move, and into that retracement I want to be a buyer. I expect the stock to eventually pull into 275, which is where the 20 day moving average will be to support price.
Expected Price: 275
Sell to Open COST 30Aug19 265/260 Put Spread
Tier 1: Enter at 0.80, Exit at 0.30
Tier 2: Enter at 1.10, Exit at 0.60
Tier 3: Enter at 1.40, Exit at 0.90
Trade #3: ADBE
I’m looking for a full retracement into the gap fill from the beginning of the month.
Expected Price: 294.65
Sell to Open ADBE Sep 265/260 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