I’m trying my best to ignore the political newsflow, so let’s keep it simple.
As long as SPX holds above 2940, things look good. The longer it holds above 2940, the higher the odds of a test of new highs. Today’s price action feels like, so far, a failed breakdown so this is constructive price action.
Combine that with… if yields rise and crude holds 55/bbl and smallcaps catch a bid, then you’ve still got a recipe for a strong move setup in the markets.
If the market loses 2940, then we’ve got high odds of a volatile chop into the end of the year.
Trade #1: MA
I’ve been stalking this for a proper pullback for months now. I think we finally will get it. There was an exhaustion gap higher that failed miserably, and the stock put in a textbook bear flag pattern.
I’m not long term bearish on this stock, I just think it will come back and test the lower end of the range where I can play the dip.
Expected Price: 260
Sell to Open MA Nov 240/235 Put Spread
Tier 1: Enter at 0.85, Exit at 0.25
Tier 2: Enter at 1.15, Exit at 0.35
Tier 3: Enter at 1.45, Exit at 0.45
Trade #2: LULU
LULU had good earnings, and pulled into fill its earnings gap. I expect trend continuation here.
Expected Price: 193
Sell to Open LULU Oct 180/175 Put Spread
Tier 1: Enter at 0.65, Exit at 0.15
Tier 2: Enter at 0.95, Exit at 0.25
Tier 3: Enter at 1.25, Exit at 0.35
ALL OUT ON CLOSE UNDER 178