Todd Horwitz Chief Strategist BubbaTrading.com
Be Prepared not Surprised.
New highs were the story of the week. For the last few weeks, we have watched a Monday sell off followed by new highs. With low interest rates and free money coupled with the trend the rally should continue. Those who try and predict the top usually end up walking away will their tail between their legs wondering what happened.
Markets are always interesting, the natural move for markets is higher averaging an 8% gain year over year. There are bear markets and bull markets and till proven otherwise this is still a bull market. Its always easier to trade in the path of least resistance. When trading and investing the slow and steady win the race.
The options markets are in full support of the bull market, for the 6th week in a row call buying is the number one strategy. However, some bear strategies are closing the gap with put buyers and bear call spreads being heavily used. Rounding out the top 5 strategies from last week are bull put spreads and the selling of calls which could be a covered call strategy.
Technology stacks dominate the bullish trades with AAPL, NFLX, NIO, AMZN and FSLY leading. AAPL and AMZN could be a little misleading with earnings do out this week. The bears are focusing on the SPY and TSLA (wick also has earnings this week.
This week starts the real guts of earnings with FB, AAPL and TSLA followed by next weeks earnings in AMZN, GOOGL and more. Watch the spiking implied volatility as they typically rise into earnings. Be patient, disciplined and remember that the business is a grind and not a casino.
Todd “Bubba” Horwitz
BubbaTrading.com