Market Overview:
Friday saw the first big sell-off in the markets in over 2 months as news of the growing political unrest in Egypt hit the wire. For the first time since Nov 30 the S&P closed below its 10-day SMA. This upcoming week will be driven by how the crisis unfolds in Egypt. I suspect most other market news will simply be ignored. I'm expecting the sell-off to initially continue on Monday then for the market to stabilize above S&P 1250.
SPY Options Trading:
If we open down big on Monday I will look to sell weekly 124 or 125 puts in SPY. I think SPY will find support around its 50-day SMA (~ 125) this week.
Key Levels in the SPY:
Resistance: 128.15 (~ 20-day SMA), 128.85 (~ 10 day SMA), 129.25
Support: 127.20, 126.25, 125 (~ 50-day SMA)
Individual Stock Trading:
GLD -
I got stopped out of my short GLD put position last Thursday. It sure looked like gold was on its way down, then the Egypt news hit and changed everything. I think that downward bias returns this week, so I'm going to look to fade this rally in gold. I suspect gold will open higher this evening and thus GLD will open higher tomorrow morning. I'm going to look to sell weekly GLD 132 or 133 calls on strength Monday morning. There should be some resistance in GLD around the 132.50 level.
USO -
I expect oil to continue higher this week. There will be a lot of volatility so I may look to sell some weekly options in USO. If oil gets back to $95/barrel, then I'll look to sell some weekly USO 40 calls.
No comments:
Post a Comment