The price action over the past few days was enough take down our market up call of 05/28. When the SPY Bull Bear ratio falls below 1.25, and price falls below the long and short term Chaikin trend (with the long term line no longer trending up), we're in market down mode. A few stops got hit, reversing gains on stocks we entered in the past few weeks. Current stocks in our portfolio won't be liquidated unless stops are hit or the Power Gauge turns bearish. We'd be selling covered calls on these stocks to take advantage of high premiums during the down move if they were in our personal accounts, though we're not tracking those moves here.
For the time being, we'll look at Out of the Money bear call credit spreads for new trades. It's our favorite strategy for a side-ways to down markets.
Here's one we traded today: SOLD -6 VERTICAL SINA 100 SEP 14 52.5/55 CALL @.60
For the time being, we'll look at Out of the Money bear call credit spreads for new trades. It's our favorite strategy for a side-ways to down markets.
- We're looking for optionable stocks with tight bid - ask spreads
- Weak sectors
- Weak industry groups
- Bearish Power Gauges
- Declining Long Term Chaikin Trends
- Stocks near the Chaikin Trend or bouncing up near resistance in an overall downtrend.
- No earnings within 30 days of trade initiation
- Chaikin sell signal
- We generally sell spreads that have between 3 and 6 weeks until expiration. But that's a matter of personal choice.
Here's one we traded today: SOLD -6 VERTICAL SINA 100 SEP 14 52.5/55 CALL @.60
RSS Feed