Markets are grinding higher to new all time highs.
Grinding– not ripping. Volatility has been very quiet over the past week or so, and we haven’t had a good reset in a while.
There’s a tendency for the market, at some point to retest the previous range before it has a good move– I wouldn’t be surprised that we eventually come back and test 4400 just to shake out the weak hands and get everyone hedged.
On the bullish side of things, there’s still the potential for a rollover in bonds. The yield curve has shifted so that’s been helping large banks… yet if we get a decent uptick in rates that will help smallcaps more than large cap tech names.
Today we’re simply planning for any pullbacks in some of our favorite traders.
Trade #1: GS
Very nice run in GS, and it’s starting to get a touch overbought. Look for a test of 400 as the first level, and if it pulls in further you’ve got a previous breakout level, a gap fill, and key rising moving averages to come in and support price
Expected Price: 400
Sell to Open GS 17Sep21 375/370 Put Spread
Tier 1: Enter at 0.85, Exit at 0.14
Tier 2: Enter at 1.19, Exit at 0.42
Tier 3: Enter at 1.53, Exit at 0.55
Stop Out If Close Under 374.89
Trade #2: AAPL
Odds are AAPL breaks out here, but I’d like to play the failed breakout and test of the lower end of support.
Expected Price: 141.63
Sell to Open AAPL 17Sep21 135/130 Put Spread
Tier 1: Enter at 0.73, Exit at 0
Tier 2: Enter at 1.022, Exit at 0.22
Tier 3: Enter at 1.314, Exit at 0.27
Stop Out If Close Under 134.89
Trade #3: IBB
IBB is getting smoked due to higher exposure in MRNA. I want a vol pivot lower low and a test of the rising trendline and 50 day moving average.
Expected Price: 163.39
Sell to Open IBB 17Sep21 156/153 Put Spread
Tier 1: Enter at 0.59, Exit at 0.18
Tier 2: Enter at 0.826, Exit at 0.38
Tier 3: Enter at 1.062, Exit at 0.51
Stop Out If Close Under 155.89