July 21, 2017

Further Declines Ahead?

We finally saw a break in the market today. On the 26th I stated a market reversal looks imminent.  The decline today has the market back at that pivotal area. If that breaks we could see $146.50 in DIA and possibly a fill of the New Year gap. The gap fill is going to happen, the problem is we have no idea when. I am not one to play guessing games with the market. An assumption with a high-probability strategy wrapped around it  is more my speed…and the current market could be giving us some opportunities going forward.

We now have a solid top or area of overhead resistance, which allows those of us who sell options premium a decent guideline over the short- to intermediate-term.

Selling options above the current overhead resistance, preferably well-above, is the tactic I will be taking going forward. It is what I have been doing in my High-Probability strategy as well as the Theta Driver strategy.

So, $151.50 will be my target high for SPY. DIA…$140.

Did Barron’s call the top again? They managed to call the bottom in Facebook. Clearly I’m being facetious. My guess is that they will once again repeat that performance…it seems more commonplace than not.

I will be back tomorrow with my High-Probability, Mean-Reversion indicator. As it stands, most of the ETFs I follow are back in a neutral state. My hope is that we see a few of the ETFs push back into oversold territory so I can add a few out-of-the-money bull put spreads with a probability of success above 80% in one, if not both of my strategies.

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Also, I have officially opened up my strategies to the public.  If you are a believer in a statistical approach towards investing please do not hesitate to try one of my options strategies. I use simple mean-reversion coupled with probabilities for each and every trade. Give it a try, it’s free for 30 days.