Market Overview

Pullback Proivdes 2 New Spread Opportunities For Monthly Trading Service

Today's overreaction to Friday's Jobs data provided a nice entry for 2 new positions in the Monthly Trading Service:
1.) IWM Bull Put Credit Spread
2.) DIA Bull Put Credit Spread
The new IWM Spread is below the put side of our current RUT Iron Condor. The DIA is an underlying we don't trade that much but there was very large volume in the puts so we seized the opportunity. Days like today are why we like to keep some powder dry. Quick moves that nobody expected (like today because everyone expected Friday's Jobs report to smash expectations) provide great opportunities to deploy opportunistic spreads.
The large gap down open was approximately the low of the day and markets strengthened through the session. Friday's jobs numbers were not that bad and if anything, keeps a new round of potential QE on the table. The trend is still in tact and things are not broken yet. The market was looking for a reason to step back and has used the Jobs data and rising European debt rates as its excuse.
It is still too early to tell whether the rally will immediately resume, like it has every other time recently, or if there are still lower prices to come. The charts, trends, and technicals are still in tact and the health of the economy is still in good shape. For now, we see nothing screaming a large-scale breakdown for equities. But, be advised that selling could continue for a few days while the market finds its footing.

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: Global Markets


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