Mid Day Trading Update – Holding Pattern
After some initial weakness in the morning session, the markets have retraced back to $155 on the SPY proving even further that the current environment can only be characterized by choppy. Strangely enough, during the sell-off this morning, many stocks traded in the opposite direction and managed to stay bullish despite the downticks in the broad indexes.
Finding alpha in large-cap names has become increasingly difficult the past few sessions and until the market receives the catalyst it needs to break the current low-volatility trend we may be sitting in this consolidation pattern for a bit longer.
If one has to trade options and simply can not sit on their hands, the ideal way to play this kind of market is to write credit spreads to capture the time decay as we head into the end of the week. Stocks like Priceline (NASDAQ: PLCN), Google (NASDAQ: GOOG) and Apple (NASDAQ: AAPL) have all sat in their respective ranges and are seeing their OTM puts and calls losing considerable value due to the non-activity. This is where you want to position yourself rather than betting on big picture breakouts/breakdowns.
Most of us here at Sanglucci.com are now sitting on our hands waiting patiently for some juice to come back here. We may get it off further news out of Cyprus.
Make sure to register for our FREE webinar after the close where we will explore the $340K winning trade in Apple from Monday!
Stay tuned for more updates!
The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.