Terrorist Bombings Will Spark Profit Taking – Wait For Support – Sell Bull Put Spreads

Posted 9:30 AM ET - The market surged higher the last two weeks on central bank money printing and dovish statements from the Fed. Quadruple witching added fuel to the move and stocks are overextended. We are due for a small pullback this week. The terrorist bombings in Belgium will lead to a light round of profit taking today. I have a few short positions that I will exit. I am on the wrong side of the market and I was expecting a decline this week. My losses will be small. The dip this week will set up an opportunity to sell bullish put spreads. Look for stocks that have broken through horizontal resistance and that are able to hold that breakout. Sell puts below the breakout and use that level as your stop. This option trading strategy allows you to keep your distance and to take advantage of time decay. The SPY will stay above $202 through April options expiration. The news is very light this week and you need to make your money early in the day if you are day trading. If the market has an overnight gap, I will tend to trade in the opposite direction during the first hour. After that, I will use the first hour range as my guide. Look for the volume to taper off as the week unfolds. This is a low probability day trading environment. Keep your size small and try to make your money early. Sell bullish put spreads on any dip. . .

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