More Bearish By the Week – Support Should Hold Next Week – Take the Free Trial

April 17, 2015
Author: Peter Stolcers, Founder of OneOption

If you want to see what I'm trading today - take the FREE TRIAL Posted 10:10 AM ET - Traders are always tempted to engage the market and to have a directional opinion. During the last 25 years, I've learned how to suppress this temptation. There are times when you have to lay low. If you can come to grips with this reality, you have a chance of being successful. The market has been trapped in a range for six months and a smaller trading range has developed. Prices are compressing and we don't have a catalyst. I didn’t even have to update the chart this week. When you're faced with this type of environment, you have to trim your size and change your strategy. You don't have the market helping your positions so you need to use stops and set targets. When I review my trading performance each year, the vast majority of my trading profits come from a few good runs. I wait for the market to line up with individual stocks and then I buy options. I increase my size because I know I have the wind at my back. Two weeks ago I started selling out of the money put credit spreads in April. This was the best strategy I could have employed. I was able to keep my distance in a directionless market and I was able to capitalize on time decay. This strategy gave me something to look at and it kept me from making stupid mistakes. Analysts have been scrambling each day to justify the wiggles and jiggles. I guess they have to find a "story" or they won't have any viewers. The bottom line is that buyers and sellers are paired off. Mega cap tech stocks will start to announce next week. Apple posts on April 27th and I'm expecting a good market bid until then. Global economic conditions are slipping and industrials will struggle. SLB is up after posting earnings, but I feel like energy might be getting a little stretched. The market is that the upper end of the trading range and I will get a little more bearish with each passing week. It is still too early to get short. Next week I will be focusing on post-earnings plays and I will add them to Pete's List. This is available to subscribers who have 10+ symbols. If you have not signed up for the Free Trial you should. You can view this list and access trade signal for every stock. You can also view the chat that is only open to my Elite subscribers. I am adding Netflix to my list. This run feels like short covering and when it reverses, I want to make sure I catch the signal for my trading system. That could take a couple of weeks or it could happen Monday. If you want to follow me on this one, subscribe to one symbol (NFLX). Don't read too much into the decline today. Remember that this is options expiration and the recent price action is nothing but noise. Earnings releases will crank up next week and the price action should improve. If you want to see what I'm trading, take the free trial or sign up for 10 symbols. . . image

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