In the following trade, we’re looking to seek 50% of max profit. If the tide demands it, we’ll let this winner run. But I believe there are two things that are going to happen here, the broader market will sell off soon or we slowly gauge higher as QE4 stimulus kicks in and yet continued poor economic data slows us down.
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Here’s the Bear Call Spread trade…
Trade Length: 65 days
First Option: SELL 3130 Call for 12/2020
Second Option: BUY 3170 Call for 12/2020
Max Profit: $2,362
Yes! The market is still above the 10 moving average on both the weekly and monthly chart. But, I believe the upside is weak. Understand that we’re going to continually see weaker and weaker economic data. The fact that we’ve had to restart quantitative easing is proof that the market is weak. We’ve lowered interest rates and this has put pressure on bank margins like never before.
They’re not tight for money like in 2008! Now its the fact that there too much money in the system and its showing in the chart.
I fully expect the market to continue higher but not by much and that’s exactly what is going to make this trade profitable!