{"id":7420,"date":"2017-01-17T07:12:56","date_gmt":"2017-01-17T11:12:56","guid":{"rendered":"https:\/\/trades.iwopremium.com\/?p=7420"},"modified":"2017-01-17T09:55:28","modified_gmt":"2017-01-17T13:55:28","slug":"proactive-spreads-january-17th-2017","status":"publish","type":"post","link":"https:\/\/trades.iwopremium.com\/proactive-spreads-january-17th-2017\/","title":{"rendered":"Full Time Profits, January 17th 2017"},"content":{"rendered":"

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Another week gone by, and another week of volatility compression in the books.<\/p>\n

Since the rally late last year, we have seen a time-based correction. There are signs of a failed breakdown which lead to a retest of the upper end of the range, which I think has already been fulfilled.<\/p>\n

It just seems like the market is waiting for something. A catalyst.<\/p>\n

Now we’ve got stock earnings coming out now so that may act as something if a large firm reports numbers significantly different than what the market is pricing in.<\/p>\n

And we’ve got US political risk with the changeover in the administration… but other than that I don’t see anything.<\/p>\n

Which is a little concerning. When the risks aren’t super obvious and written in the headlines, that’s when we want to be a little cautious.<\/p>\n

We also have the VIX at a floor and it’s been there for two months:<\/p>\n

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And stock correlations are pretty low:<\/p>\n

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This is a chart of the European markets and how sectors aren’t running on the same conveyor belt… I’m seeing the same here in US stocks.<\/p>\n

For us, that’s great… it means that individual stock setups are still there and we can pull out a good income in the markets.<\/p>\n

However… at some point a catalyst will come into play and stocks will start trading on the conveyor belt together. It’s probably too early to make that call but it’s something I’m watching and I wanted to bring to your attention.<\/p>\n

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

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The stock has gone sideways for well over a month now. I suppose you could try and play the breakout, however I want to wait for a test of the low 130’s… previous pivot levels and a rising 50 day moving average come into play, making this a good risk\/reward trade.<\/p>\n

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

Expected Price: 132.50<\/p>\n

Sell to Open HD Mar 125\/120 Put Spread\u00a0<\/strong><\/p>\n

Tier 1: Open at 0.80, close at 0.30<\/p>\n

Tier 2: Open at 1.10, close at 0.80<\/p>\n

Tier 3: Open at 1.40, close at 1.10<\/p>\n

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

\"\"<\/p>\n

I’ll be completely upfront with you… I’m extremely hesitant to even suggest this trade. Shorting stocks has not been working and TSLA is a freight train right now.<\/p>\n

However, the stock has rallied over 20% in the past month. This is normally the time momentum significantly slows down.<\/p>\n

Now because this has earnings next month, I don’t want to put on anything too aggressive. This is a “whites of their eyes” trade where I only want to play it if it truly goes parabolic.<\/p>\n

That means I need to see another 20 points out of the stock before I even consider putting on this trade.<\/p>\n

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

Expected Price: 250<\/p>\n

Sell to Open TSLA Mar 285\/290 Bear Call Spread<\/strong><\/p>\n

Tier 1: Open at 0.75, close at 0.25<\/p>\n

Tier 2: Open at 1.05, close at 0.75<\/p>\n

Tier 3: Open at 1.35, close at 1.05<\/p>\n

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

\"\"<\/p>\n

Large cap financials are all getting their earnings reports out of the way, and what I’m seeing so far is a lack of positive response after the earnings report.<\/p>\n

While GS has yet to report, other names like JPM and BAC already have… so far they look like failed breakouts.<\/p>\n

Given how far this sector has moved, it makes sense to anticipate a pullback. Be ready for a move to 230 quickly and start fading it there.<\/p>\n

Right now March options aren’t open, but they will be at the end of the week. I’ll plan a trade with April options, but move to March if it isn’t filled this week.<\/p>\n

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

Expected Price:\u00a0230<\/p>\n

Sell to Open GS\u00a0Apr 205\/200 Put Spread<\/strong><\/p>\n

Tier 1: Open at 0.80, close at 0.30<\/p>\n

Tier 2: Open at 1.10, close at 0.80<\/p>\n

Tier 3: Open at 1.40, close at 1.10<\/p>\n","protected":false},"excerpt":{"rendered":"

Another week gone by, and another week of volatility compression in the books. Since the rally late last year, we have seen a time-based correction. There are signs of a failed breakdown which lead to a retest of the upper end of the range, which I think has already been fulfilled. It just seems like […]<\/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\/7420"}],"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=7420"}],"version-history":[{"count":5,"href":"https:\/\/trades.iwopremium.com\/wp-json\/wp\/v2\/posts\/7420\/revisions"}],"predecessor-version":[{"id":7432,"href":"https:\/\/trades.iwopremium.com\/wp-json\/wp\/v2\/posts\/7420\/revisions\/7432"}],"wp:attachment":[{"href":"https:\/\/trades.iwopremium.com\/wp-json\/wp\/v2\/media?parent=7420"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/trades.iwopremium.com\/wp-json\/wp\/v2\/categories?post=7420"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/trades.iwopremium.com\/wp-json\/wp\/v2\/tags?post=7420"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}