Like yesterday's morning note indicated, it was shaping up to be a busy day! The remaining open orders from last week and Monday were filled at the open in the Monthly Trading Service. The fills were really good for those orders thanks to the opening gap up; "good" meaning executions above the trade entry limit prices. This is why I use GTC orders as orders may not get filled on the day they are released but typically trigger within a day or two.
I also took advantage of the volatility yesterday to open Bear Call Spread positions on RUT (Russell 2000 Index) for both the Monthly & Weekly Trading Services. I selected the RUT because the premiums were far better than the IWM (the ETF tracking instrument that mimics the RUT) for the trade I was looking to make.
RUT rose above the 200 DMA yesterday but the volume was super light and the rally lost traction all day. The light volume and diminishing rally was the same across all indexes. It was a great day to sell Bear Call Spreads using the volatility to place the spreads comfortably above the market and OTM (Out of The Money) while generating healthy premiums. The market remains overbought and needs to digest the recent gains. Preferably, some backing and filling needs to occur to sustain a further rally.
Watch the short term moving averages (10, 13, & 20 day) as markets need to close the gap between the current prices and the location of those moving averages.
Navigate wisely and stay profitable, my friends. Happy trading!
+72.33% 2011 BookingAlpha Monthly Advisory
+42.22% 2011 BookingAlpha Weekly Advisory
vs.
-0.01% 2011 S&P 500
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