Market Will Break Major Support Next Week – Hang On to Your Put Options

January 30, 2015
Author: Peter Stolcers, Founder of OneOption

Options Trading Strategy - I have been buying at the money put options all week and I have been shorting the S&P. This is an aggressive options trading strategy and your timing has to be perfect. Given the recent selling pressure, I believe we are on the brink of a nice decline. If I am right I stand to make a killing. When the market makes big moves, I can't get my comments out early. I do post them before the open in my trading platform. This is a one-time offer. If you want to try my platform free next week, send an email to: {encode="[email protected]" title="[email protected]"} Posted 11:20 AM ET - Yesterday, the market probed for support early in the day and it found it. Buyers stepped in and the S&P 500 rallied back above the 100-day moving average. As I mentioned in my comments, five-year bull markets die hard and this will not be an easy short as long as we are above technical support. Amazon posted better-than-expected results and the stock is up this morning. Google disappointed for the fifth straight quarter but the stock rallied after the CFO said that they would consider a special dividend if overseas profits can be repatriated at a favorable tax rate. GDP came in at 2.4% and that was worse than expected. Earlier in the week durable goods orders disappointed and we could be hitting a soft patch. Sooner or later, the strong dollar will start to impact exports. All of China's provinces missed GDP expectations. This does not bode well for official PMI's that will be released this weekend. Earnings season has not sparked a rally and the ECB's bazooka has not sparked a rally either. Stay short and be prepared to weather some rallies like we saw yesterday. This will not be an easy short until we consistently close below the 100-day moving average. If the market spends a few days below that level, the 200-day moving average will be tested. Once that fails, we will hit an air pocket. That is what you want to stick around for. Use the 100-day moving average as your stop. Prices look weak today and I am expecting a drift lower all day. I am as bearish as I've been in a few years - stay short. . . image

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