Last week’s trading strategies roundup by Todd Horwitz, Chief Strategist, BubbaTrading.com
Markets rallied early last week and paused late. Basically, we saw the markets retrace to the mean. The holidays are over, and the markets should get back to business. That does not mean they will suddenly get busy this week but there should be an increase in volume.
Last Friday was the Jobs report which was positive. However, no one ever talks about the revisions which show a net loss for the year. Most of the economic data has been negative or revised. Although the trend is mixed there is a high probability of a sell-off.
We would look for action to start around the triple witching Friday expiration. That could be the end of the rally attempts and the start of selling pressure. Obviously, we can’t predict with certainty and will react to price action when it comes.
The VIX continues to get clobbered indicating a spike and a down move is coming, there is too much complacency. Iron Condors led the way followed by Bull Put Spreads, Bear Puts, Bull Calls, Bear Call Spreads.
The bulls were buying SPY SPY , AMZN AMZN , AAPL AAPL , QQQ QQQ , and XLU XLU , while the bears were selling HZNP HZNP , TLT TLT , SQ SQ , DWAC DWAC , and JBLU JBLU . The markets are acting as expected.
Remember, we can’t predict what’s next, but the price action will give indications and guide us in the right direction. All signs are starting to point lower however flexibility is the key to trading successfully.
As traders and investors, we have one thing to remember, follow the trend of the market. Be patient disciplined and leave your emotions out. The most important thing to remember is money management and self-control.