Market Context

Good day all,

Fourteen straight trading sessions have been in the red. That is pretty much (less 1 day) 3 consecutive weeks of lower lows and closes in the red. Hard to believe that this time last week the SPX settled at 2600. Five trading days later 2416 which is a -184 point swing to head into the weekend before Christmas. Selling rallies seems to be a trick that many traders are catching onto, so much to the point that it seems like the market is setting itself up for the ultimate bear trap. Our big support number in the Dow is still intact at 21,600. However, the fact that we closed below support levels this week in the Dow and SPX indicates to me that we are likely in for lower lows next week. The two key bearish reversals to watch for in today’s close were 23,052 and 22,415, we elected the first but not the second, which indicates further downside but not a meltdown. If I had to take a guess, I would say further downside into the 26th followed by a rally into the end of the year and then further downside forming a low in January. The VIX closed above 30 which means yet again there are ample opportunities to protect a capital via our hedges and yield. Just as subscribers yielded on today’s expiration in the SPX, having placed an unbalanced condor and managing to yield 72% return! Here’s to more opportunities in a market full of volatility.  Join us, click the “Become An Astute Insider” button below to be part of these great hedges and more!

Risk & Reward

Our SPX Hedge that settled right at the sweet spot. 72% return on capital is indeed a great way close the week.