Markets Recoup Recent Losses With A Strong Rally

Broader Market Weekly Performance:

Dow +1.54%

S&P +1.80%

Nasdaq +3.37%

Russell +3.76%

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MARKET UPDATE:

Markets staged an impressive rally this week. All the major indexes traded higher with the Russell and Nasdaq up over +3% each. The Nasdaq even closed solidly higher Friday without AAPL, which traded all day and closed in the red. The Dow has risen back to challenge recent highs and the S&P only sits about 20 points below its recent highs.

The coming week is a busy one headline-wise with many economic data points to be released. The recent domestic and European headlines have been a little soft but earnings have kept the rally train on track. Earnings fever will begin to wind down over the next few weeks and the "sell in May" drum will continue to be pounded. Our analysis points to another attempt at a leg higher but it will be a hard fought one as earnings releases dry up and economic data suggest the recovery is a little less robust than originally hoped/thought.

The markets have been exhibiting topping behavior and the top is probably in for the short term (S&P 1420). Although, there is a possibility of 1440 if the bulls can keep their momentum.

Navigate wisely and stay profitable, my friends. Happy trading!

BOOKINGALPHA UPDATE:

Monthly Trading Service Commentary:

We opened our first May spread during Friday's afternoon trading. We selected the RUT for our first May position, a Bear Call Credit Spread, taking advantage of it's large rally this week (+3.76%). The Russel is approaching strong resistance at 830. If 830 is surpassed the next level of resistance is 835 and then 841. If these higher prices are indeed reached our spread would still remain far OTM.

We have a couple more positions on the radar that may be released this coming week. However, we feel there may be a little more gas in the S&P, Nasdaq, and Dow's tanks so we want to let it play out a little longer first.

While losses are unfortunate, they are a part of trading. Looking at past trading years you will see drawdowns like this do occur and ultimately, how we prevailed. This is not a justification, merely a reminder that this situation is still within the realm of normal portfolio gyration. While it may be uncomfortable and is surely no fun, my position sizing allows for these drawdowns providing enough capital to recover. See past year's results and let them speak for themselves. For more information please read: Generating Alpha Comes With Volatility

Monthly Trading Service YTD vs S&P 500:

-6.43% YTD BookingAlpha Monthly Advisory

vs.

+11.45% YTD S&P 500

See Trading Record

Weekly Trading Service Commentary:

This week we opened a Bear Call Credit Spread on SPX which we then adjusted in response to the strength of the late week rally:

1.) April27 1405/1410 SPX Bear Call Credit Spread - closed for -27.66%,

2.) April27 1410/1415 SPX Bear Call Credit Spread - expired worthless for +11.11% in 2 days.

We deployed the 1405/1410 position during Thursday's tight trading. At the time, the spread was comfortably out of the money and had carried a high probability of expiring worthless for profit.

However, in the afternoon, markets began to rally for no real reason catching many traders off guard. The S&P rose to within 3 points of our short spread strike. Following our trading rules including adhering to our stop loss thresholds and mitigating risk, we closed the spread for a loss and redeployed the spread at higher strikes. The new, replacement spread expired worthless for full profit which helped offset some of the loss on the original spread.

The Weekly Trading Service is now back to 100% cash and will be looking to open new positions this coming week.

While losses are unfortunate, they are a part of trading. Looking at past trading years you will see drawdowns like this do occur and ultimately, how we prevailed. This is not a justification, merely a reminder that this situation is still within the realm of normal portfolio gyration. While it may be uncomfortable and is surely no fun, my position sizing allows for these drawdowns providing enough capital to recover. See past year's results and let them speak for themselves. For more information please read: Generating Alpha Comes With Volatility.

Weekly Trading Service YTD vs S&P 500:

-11.92% YTD BookingAlpha Weekly Advisory Portfolio

vs.

+11.45% YTD S&P 500

See Trading Record

Check out the BookingAlpha Trading Record

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