{"id":7249,"date":"2016-11-30T22:06:22","date_gmt":"2016-12-01T02:06:22","guid":{"rendered":"https:\/\/trades.iwopremium.com\/?p=7249"},"modified":"2017-01-13T12:33:21","modified_gmt":"2017-01-13T16:33:21","slug":"proactive-spreads-november-30th","status":"publish","type":"post","link":"https:\/\/trades.iwopremium.com\/proactive-spreads-november-30th\/","title":{"rendered":"Full Time Profits, November 30th"},"content":{"rendered":"

\"\"<\/a><\/h2>\n

The market is exhaling.<\/p>\n

And that’s OK.<\/p>\n

After a massive move after the US election, we’re seeing a correction. Remember, corrections can manifest three ways: price, time, and momentum.<\/p>\n

It’s very possible that we see a correction through time, that is rotational in nature.<\/p>\n

Meaning that one sector will sell off, another sector will rally, and the market will maintain a balance.<\/p>\n

The one major event we have left for this year is the Fed meeting. They’ll probably raise, and it has already started to get priced into the market.<\/p>\n

How do we know this? Look at rate sensitive assets like TLT, or IYR. These areas of the market have remained soft but will probably not see continued downside momentum.<\/p>\n

Contrast that with areas that do well when rates are rising: XLF and KRE are the best examples. These areas continue to stay bid as we head into the meeting.<\/p>\n

Odds are that the rotation will come from that theme. It’s a “buy the rumor sell the news” event headed into the Fed meeting.<\/p>\n

Trade #1: GS<\/h2>\n

\"\"<\/a><\/p>\n

Goldman Sachs has been one of the market leaders since the beginning of November. The main driver behind this appears to be twofold- a better regulatory environment next year and a yield curve that’s helping banks as a whole.<\/p>\n

Yet it’s starting to get ahead of itself… again.<\/p>\n

The stock is currently 33% above it’s 200 day moving average. Over the past 5 years, this has happened only once back in 2013.<\/p>\n

Now can it head higher? Yeah. Will it be a ripper into the Fed? Probably not, and it’s getting priced in.<\/p>\n

GS earnings is on Jan 18th, so there will be earnings risk in this trade. Ideally we’ll be in and out before we have to deal with it.<\/p>\n

Trade Setup:<\/strong><\/p>\n

GS Jan 240\/245 Bear Call Spread<\/p>\n

Tier 1: Enter @0.60, Exit @0.20<\/p>\n

Tier 2: Enter @0.90, Exit @0.60<\/p>\n

Tier 3: Enter @1.20, Exit @0.90<\/p>\n

Trade #2: V<\/h2>\n

\"\"<\/a><\/p>\n

On the other side of the coin, Visa (V) is not doing well.<\/p>\n

Here’s why: there are two kinds of credit card companies, and their performance (for now) is tied to the rate environment.<\/p>\n

So while Visa and MasterCard are not doing well, Capital One (COF) and American Express (AXP) are continuing to rally.<\/p>\n

The way volatility has started to expand, V will probably have 75 act as a magnet all the way down to 73… That’s the support from the July lows, and that’s where we want to start initiating a new position.t<\/p>\n

Trade Setup:<\/strong><\/p>\n

V Jan 70\/67.50 Bull Put Spread<\/p>\n

Tier 1: Enter @0.35, Exit @0.15<\/p>\n

Tier 2: Enter @0.45, Exit @0.30<\/p>\n

Tier 3: Enter @0.60, Exit @0.40<\/p>\n

Trade #3: CAT<\/h2>\n

\"\"<\/p>\n

Industrials have been running hot post-election, and while they aren’t properly overbought we want to look for an opportunity to buy the dip if it comes.<\/p>\n

If CAT tests the gap open at 90, that will be a good place to initiate some bull put spreads.<\/p>\n

Trade Setup:<\/strong><\/p>\n

CAT Jan 80\/77.50 Bull Put Spread<\/p>\n

Tier 1: Enter @0.35, Exit @0.15<\/p>\n

Tier 2: Enter @0.45, Exit @0.30<\/p>\n

Tier 3: Enter @0.60, Exit @0.40<\/p>\n","protected":false},"excerpt":{"rendered":"

The market is exhaling. And that’s OK. After a massive move after the US election, we’re seeing a correction. Remember, corrections can manifest three ways: price, time, and momentum. It’s very possible that we see a correction through time, that is rotational in nature. Meaning that one sector will sell off, another sector will rally, […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_bbp_topic_count":0,"_bbp_reply_count":0,"_bbp_total_topic_count":0,"_bbp_total_reply_count":0,"_bbp_voice_count":0,"_bbp_anonymous_reply_count":0,"_bbp_topic_count_hidden":0,"_bbp_reply_count_hidden":0,"_bbp_forum_subforum_count":0,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":""},"categories":[24],"tags":[],"_links":{"self":[{"href":"https:\/\/trades.iwopremium.com\/wp-json\/wp\/v2\/posts\/7249"}],"collection":[{"href":"https:\/\/trades.iwopremium.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/trades.iwopremium.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/trades.iwopremium.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/trades.iwopremium.com\/wp-json\/wp\/v2\/comments?post=7249"}],"version-history":[{"count":5,"href":"https:\/\/trades.iwopremium.com\/wp-json\/wp\/v2\/posts\/7249\/revisions"}],"predecessor-version":[{"id":7384,"href":"https:\/\/trades.iwopremium.com\/wp-json\/wp\/v2\/posts\/7249\/revisions\/7384"}],"wp:attachment":[{"href":"https:\/\/trades.iwopremium.com\/wp-json\/wp\/v2\/media?parent=7249"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/trades.iwopremium.com\/wp-json\/wp\/v2\/categories?post=7249"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/trades.iwopremium.com\/wp-json\/wp\/v2\/tags?post=7249"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}