December 8th, 2016 Watch-list
Evening traders! The overall market continues to soar higher despite the charts being incredibly over-extended on the daily. At this point, we may be on our way to 20k for the DJIA. Overall, the risk is still fairly high in my opinion for above $20 plays. We're over-extended, yet trying to predict the pullback has been tough. Long term though, the technicals will pay off in my opinion, so we'll continue to look towards the inverse market plays. If we can see another day or two of topside move, may be time to jump on the puts again for the SPY. Below you will find the DJIA daily chart with key support and resistance labeled!
Current Plays on Watch:
SDOW: For those who are not yet in SDOW (or entered and got stopped out and are looking for a re-entry) we're going to utilize the same strategy as before. It is listed below. Adjustments to the profit targets have been made.
VIX/VXX: For those who are in the $VIX options that have not yet expired, we started to see some positive movement topside today which is good to see. As for VXX, those in using the recommended 10% stop loss, we had a small green day today. Very simply put, this one will lag VIX a bit, so if VIX ends up continuing higher, this one should follow suit. Hoping for a strong close to the week.
SPY/SPXS: Mixed bag overall on the SPY options trade. Those who targeted just puts saw solid profit, whereas those who traded the lower risk spread (myself included) saw the max loss (about $90 per contract) occur. Overall I still feel the spread trade was a solid one considering the technical set-up we had. We'll most likely look to target the puts again as a high risk trade for the SPY if we can see another day or two of topside movement, so keep an eye out for that. As for SPXS, same things we talked about for SDOW apply here. IF not yet in or looking to get a re-entry, look for the 3/4 sell signal in the SPY, then target SPXS with the 15 min buy technique. Both charts below for review.