I have been having a number of conversations around is the bull dead, and with the market so whippy, is it worth trading. I am not sure, but I see the September highs as the top, but I don't yet see a collapse, as the Central Banks will keep promising to start QE4, so what to do.
For me, I think selling collateralized puts weekly on SVXY (or deep in the money calls) is where I will focus for now. I am going to stay in that posture, until 192.61 is taken out (I will adjust that support as time goes by). My goal is to harvest 30-50% annualized cash premium and give myself a 14% cushion (won't lose money unless stock closes below Strike plus premium). If you have the wherewithal, set a sell contract on ES below 1920 for additional piece of mind.
By doing this, you are protecting yourself somewhat for a downside move, and you are not really missing anything if we bust to new highs (which is less than 15% away). Something to think about.
My best read going into next week is Monday/Tuesday flat to down (Monday is last POMO). Wednesday through Friday higher, and then we go and test the lows again. If I am wrong, I am harvesting, if I am delayed I am harvesting, If I am right, I will buy VXX at ES 1920 and lower and abandon the call writing/put selling until I get another buy signal on the market.
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