The air has been let out of the balloon.
Momentum has clearly shifted and buyers are no longer in control. There’s a pivot support level at 2322, and if that is lost, then we should get a swift move down to the previous resistance at 2300.
With that said, this market has been characterized as one giant “left-behind” trade, where we haven’t seen a proper pullback in so long that if it doesn’t come again, and we manage to hold back above 2350 again, then investors will be forced to buyin to stocks in a price-insensitive nature.
Base case is still reversion. Earnings season will bring more vol and more trading opportunities. Make sure to go back and look at the newsletter archives for names that are coming into our price levels.
Trade #1: FB
This may not get a fill before earnings so keep that in mind.
First support is 137.50 and if you want to play for a bounce there, that’s fine, but I’m looking for a deeper correction into 135 which is the major pivot level from the past year’s trade.
Trade Setup
Expected Price: 135
Sell to Open FB Jun 125/120 Put Spread
Tier 1: Open at 0.80, Close at 0.30
Tier 2: Open at 1.10, Close at 0.80
Tier 3: Open at 1.40, Close at 1.10
Trade #2: FDX
This is another look at a trade idea from March 30th. We need to update the strikes and prices.
Trade Setup
Expected Price: 180
Sell to Open FDX Jul 160/155 Put Spread
Tier 1: Open at 0.80, Close at 0.30
Tier 2: Open at 1.10, Close at 0.80
Tier 3: Open at 1.40, Close at 1.10