The intermediate- to long-term view on equities is that this choppy, schizophrenic market will eventually resolve itself to the upside.
Reported earnings are going to pick up considerably this week with names like Google, Amazon, Intel, Starbucks, Ameritrade, Boeing and other stocks from a multitude of sectors. Always check earnings dates prior to putting on a trade.
During earnings season, there can be a tendency to be less active on our parts because of a large number of stocks that are reporting. We are not going to be putting on a position with options or swing trading long or short the underlying when earnings are going to be reported in the coming days.
This will not stop us from trading S&P options that expire in a few days or day trading individual stocks. The best way to take advantage of those recommendations is to be with us in the Green Room during the trading day.
As a subscriber to this letter, you do get a significant discount.
Below is a daily chart of SPDR S&P 500 ETF (SPY).
Trade: Over the 30-Min. high, consider shorting Apr (4/25) $265/260 bull put credit spread (2 DTE) for a limit of $.60/share (closed at $.78/share). Note: If SPY gaps down (which is preferred to get more deeply oversold), then short a $5-wide OTM put spread.
Technical Setup: Three-day pullback to support after breakout from bullish consolidation and Major Support at r200-MA.
Option Strategy: Bull Put Credit Spread (BPCS).
Stop Loss: Lower of day’s low or $265.60.
Below is a daily chart of GrubHub Inc. (GRUB).
Trade: Over $104.45, consider shorting Apr (4/27) $97.5/92.5 bull put credit spread (5 DTE) for a limit of $.50/share (closed at $.65/share). Note: higher risk because spreads are very wide.
Technical Setup: Three-day consolidation within range of Bullish +WRB Breakout from Major Support at r50-MA daily, bullish weekly Buy Setup.
Option Strategy: Bull Put Credit Spread (BPCS).
Stop Loss: $99.66.
Below is a daily chart of Workday, Inc. (WDAY).
Trade: Over $133.56, consider shorting Apr (4/27) $128/122 bull put credit spread (5 DTE) for mid-point but a limit of $.80/share (closed at $.95/share).
Technical Setup: Bullish 3-day consolidation in top half of Bullish Wide Range Bar Breakout above 20/50-MA daily, bullish uptrend weekly and monthly.
Option Strategy: Bull Put Credit Spread (BPCS).
Stop Loss: $128.88.
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Master Trader and You Building Your Financial Future Together
Happy trading! If you have any questions or comments, please e-mail Greg Capra at Greg@mastertrader.com or Dan Gibby at Dan@mastertrader.com
All the best,
Greg Capra
Managing Director of Master Trader
Trading the Pristine Method — Origin and End
Dan Gibby
Chief Options Strategist
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