On Wednesday, the market gapped higher on the back of good AAPL earnings and the anticipation of Fed “voodoo.” After the Fed announcement, the market took out yesterday’s lows.
This is a textbook “bearish engulfing” candlestick pattern.
I’m not sure this is going to end up being a massive double top, but let’s put a “normal” pullback in perspective.
A 3% pull off all time highs– just 3%! — puts the market at 2865. That would be a very similar pullbck that the market saw at the beginning of march.
There’s also an open gap at 2834 which looks very fillable. As we head into the back end of earnings season, we will be hard-pressed to find catalysts that will drag the market higher. We may (gasp!) start to see more two-way action. I’m biased, because that’s what I’d like to see.
Trade #1: XOM
I’m looking for a retracement to the previous earnings highs, which should act as support all the way down to 73.
Trade Setup
Target Price: 75.50
Sell to Open XOM Jun 72.50/70 Put Spread
Tier 1: Enter at 0.50, Exit at 0.10
Tier 2: Enter at 0.70, Exit at 0.30
Tier 3: Enter at 0.90, Exit at 0.50
Trade #2: INTC
INTC is into day 5 of a post-earnings trainwreck, and it’s back into the 50 pivot level that was previous resistance through the second half of 2018. I like playing the dip here.
Trade Setup
Expected Price: 50.55
Sell to Open INTC Jun 47/44 Put Spread
Tier 1: Enter at 0.40, Exit at 0.10
Tier 2: Enter at 0.60, Exit at 0.30
Tier 3: Enter at 0.80, Exit at 0.50
Trade #3: NKE
If NKE tests the support levels from March, I want to be involved. This would be a stretch.
Trade Setup
Expected Price: 82.50
Sell to Open NKE Jun 77.50/75 Put Spread
Tier 1: Enter at 0.40, Exit at 0.10
Tier 2: Enter at 0.65, Exit at 0.35
Tier 3: Enter at 0.90, Exit at 0.60