President's Day Weekend Update


The market is closed on Monday for President's Day. Next Scheduled Updates are Tuesday.

New Trading Signals
Intermediate Term BuyMGM
Option: April $28.00 Call
Intermediate Term BuySLV
Option: April $14.00 Call
Intermediate Term Sell - CBOE
Option - June $95.00 Put

Market Commentary

Last week I warned against going Long in a market where so many sentiment indicators at extreme bullishness. The take-away was that a change-in-trend lower was imminent.  Accordingly, the Dow went up 800 points week, ironically making a case...for even higher and ridiculously extended bullish sentiment. In the longer run history teaches us that there is only one resolution from such conditions, i.e. an eventual hard reversal down. The only question is whether or not there is enough of a window for higher prices to merit getting Long now, or to just wait out the final stages of the rally and pounce on the first signs of the turn lower?

Above are three trades, one bullish, one bearish, and a precious metal trade, all combining to form a diversified a strategy that can be put on Tuesday. There are 28 and 62 days, respectively, left in March and April options, enough time to scalp 35% on both sides of the coin and still leave a little on the table for further gains. It's a marathon, not a sprint. 


Trading Charts


Trade Performance: January - April Expirations