Today we look at the S&P channel and how AGAIN, it gave us the exact exit point for our PUT positions. The only difference this time, is that we did hit the 38.2% retracement in the last rally, and that might provide more pressure to the downside in the markets and if we were to retest the support early tomorrow, we could potentially break it. That said, you should not go short in anticipation, the best trade would be to go long at support levels and short at the resistance of the channel. There is still potential for this market to go to new highs as it continues to trade in the channel. The only two positions that i’ve kept is a small XLF PUTS and a bigger BEN PUTS position. Both these stocks have been incredibly overbought, and even if the market does rally, i expect some downside from these stocks.
Idan,
What options are you using for day trades? Front month high delta options?
For intraday? front month, delta >60… but for swing trades.. like what I have on BEN and XLF.. i’ve got september 1 out of the money.