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IncomeLab Live Aug 15th, 2017
Full Time Profits, August 17th 2017 – FB
Since the failed breakout from last week, the S&P 500 has continued to trade a little “looser.” We’ve seen some pretty hard selloffs, gaps, failure to sustain any further upside.
Odds are, we just trade sideways… because, well that’s what recent market action has traded like.
A change in character here would be a gap fill at 2440. That means there weren’t enough buyers to accept current prices… and a retest of the lows from the large selloff is not characteristic of what we’ve seen all year.
Key resistance is 2470, support 2440. Expect more rotation and plenty of shakeouts.
Trade #1: FB
Looking for a pullback into the rising 50 day moving average.
Trade Setup
Price Target: 163
Sell to Open FB Oct 150/145 Put Spread
Tier 1: Enter at 0.60, Exit at 0.10
Tier 2: Enter at 0.90, Exit at 0.60
Tier 3: Enter at 1.20, Exit at 0.90
Full Time Profits, August 14th – CAT
Volatility has finally started to pick up, and we’ve recently seen a hard selloff into the previous range. The broad market hasn’t seen much technical damage, yet underneath the surface fewer and fewer stocks in solid uptrends– only 43% of stocks in the S&P 500 are currently above their 50 day moving average.
Too early to tell whether we’ll see a lower low… there’s been many times this year where the market has a large selloff and finishes at the lows, only to have the market reverse hard and continue its uptrend.
Trade #1: CAT
Looking for a pullback to previous support and the rising 50 day moving average.
Trade Setup
Expected Price: 110
Sell to Open CAT Oct 110/95 Put Spread
Tier 1: Enter at 0.60, Exit at 0.10
Tier 2: Enter at 0.90, Exit at 0.60
Tier 3: Enter at 1.20, Exit at 0.90
Full Time Profits, August 10th – BIDU, C
Based on closing prices, the S&P has traded in about a 10 point range for a month. Volatility is really compressed and breadth has deteriorated a bit. Key support coming into play at 246 and if that gets lost the next level to watch is 244.60, then the gap fill down at 242.
If we do manage to pull back, many investors will “feel” terrible about it… even though a 3% correction is simply statistical noise. Keep your mind out of the noise and focus on your setups.
One more quick note… there’s been some headlines about North Korea. The best proxy to use is to watch the VIX for the KOSPI (korean stock index). Unless that rips higher, then assume most of the headlines are noise.
Trade #1: BIDU
Massive breakout on earnings, and the long-term chart is setup for higher prices. Post-earnings support is at 218, I want a break of that to flush out the weak hands.
Trade Setup
Expected Price: 218
Sell to Open BIDU Sep 200/195 Put Spread
Tier 1: Open at 0.60, Close at 0.10
Tier 2: Open at 0.90, Close at 0.60
Tier 3: Open at 1.20, Close at 0.90
Trade #2: C
Looking for a pull into the rising 50 day moving average.
Trade Setup
Expected Price: 66
Sell to Open C Oct 60/55 Put Spread
Tier 1: Open at 0.60, Close at 0.10
Tier 2: Open at 0.90, Close at 0.60
Tier 3: Open at 1.20, Close at 0.90
Full Time Profits, August 7th 2017 – MA
Markets continue in a super tight range that started back in July. Very, very low volatility with rotation underneath the surface. To put it into context… the only vol we have seen was back on July 27th. That day’s range encompasses all price action for nearly 3 weeks worth of action.
Trend is still up so until we see evidence to the contrary, most bets should be on the bullish side. Key support at 2450, key resistance at 2500.
Trade #1: MA
This stock caught a little heat on earnings, and I’d like to see it rollover and retest the key levels from June, which coincide with a rising 50 day moving average.
Trade Setup
Expected Price: 125.10
Sell to Open MA Sep 120/115 Put Spread
Tier 1: Open at 0.60, Close at 0.10
Tier 2: Open at 0.90, Close at 0.60
Tier 3: Open at 1.20, Close at 0.90