S&P 500 futures hit all time high 2917.5 before retracing back to 2872.7. All the moving averages are still trending up despite being lagging indicator. Traders who are bullish on the market can nimble in when the futures touches 10 weekly SMA. Expect a sideway market for the next few weeks.
Crude oil futures continue to trade between 10 SMA and 50 SMA. As the uptrend is still not confirmed until futures protrudes above 10 SMA decisively, it is recommended to wait for a clearer trend before entering the market. Options income trader who follow the suggestion earlier (at your own discretion of course) should have made some good income. Options income trader can close the previous position to lock in the profit and continue to sell iron condor at 76 (bear side) and 63 (bull side) respectively at further maturity date to take advantage on time decay while waiting for a clearer direction to form.
Gold futures continue to trend down. Touching 10 weekly SMA should indicate a better probability of shorting instead of going long. Unless the futures break 200 weekly SMA decisively, the outlook of the gold futures is bearish.
Options income trader can open to sell a bear call credit spread (e.g. Sell 1235 Call and Buy 1230 Put) to take advantage on the existing market sentiment and time decay. For a more advance trader, the credit that is collected can be used to fund another debit spread position (buy a bear put debit spread). Position sizing and money management needs to be considered as this can be a 2x leverage.
Trader mindset #3 As a rule of thumb, always calculate the worst case scenarios (max that you can lose) and if this is acceptable, then take the trade; else ignore it. Profit will always take care of itself.
6 thoughts on “Weekly Review 3 – 7 Sep 2018 (Stock, Gold, Crude Oil markets)”
Hi, can you help clarify your suggestion for /GC BCS credit spread of sell 1235 call and buy 1230 put? Do you mean BCS(credit spread) sell 1235 call, buy 1240 call? thanks.
Yes you are right, it should be 1240 call, that was a typo, thanks for highlighting this!
Could you also provide guidance on the buy put debit spread, like buy 1200 put, sell 1190 put? thanks again!
Yes you can do that or buy 1200put and sell 1195put, depending the risk that you are willing to take