Options Outlook For The Week Of June 9: 2013 Bull vs. 2014 Bear = Fair Fight

Last week was an important week for traders; the events had the potential to impact trading theses. With Eurozone committed to growth and the US recovery still on track, the markets can be traded with more confidence than the prior week. Recently, traders doubted Draghi's commitment to act. Traders also were scared that growth was stalling and that it wasn't the weather. Now, the fight between the 2013 bull and the 2014 bear rages on. But unlike 2013, this time around it's a fair fight; bears are not scared yet.

Traders should watch for potential pitfalls that could trip these markets:

• Bulls may be tempted to book some profits on these rips.
• TLT and Yen are no longer inversely trading with markets tick for tick, but the TNX is. So, it seems that as 10yr rates rise, markets may stall.
• Extremely low VIX leaves no margin for errors. This is a multi-year low.
• There are more calls in VIX than puts; but there are more puts in indices than calls. So traders are still cautious

There is a resurgence of the love for Apple AAPL. Most experts now say: 'we like Apple here.' They all hated it at 400. Then again when it fell to 505. Now that it's back near its all-time-highs, everyone loves it again. This doesn't make much sense. It can move markets: from 4/16, half of the NDX move can be attributed to only one stock: Apple. Apple rose 25 percent; it may not have another 25 percent from here. So the NDX will likely need other tickers to step up.

Related Link: Has Priceline Already Seen The Top?

This week: During Monday's pre-open, US futures will likely be dictated by China and Japan trades. Over the weekend, China import/export and Japan lending, GDP and consumer sentiment data was all released. Bulls will keep pumping the upside potential while the bears will remain quiet. The small caps will be key on Monday. Momentum stocks will also be important; they help gauge the real appetite for risk.

From an options perspective one can do the following:

• Continue to profit from collecting premium via selling iron condors. Doing this with leaps can be successful as well.
• • It could be profitable to sell credit call spreads with a decent buffer and hedges.
  • It may be advisable to pick on a few weak-looking tickers such as: WellPoint WLP, Zillow Z, Salesforce CRM and Las Vegas Sands LVS. These are lotto debit put spread trades where cost is small but with decent payout.
  • Traders could also make lotto calls in Baidu (NASDAQ: BIDU) for June based on a hunch. There also appears to be a move coming in Chipotle Mexican Grill (NYSE: CMG), so traders could flip a coin to pick a direction for a lotto trade.
  • Check the video below for a recap of this week's options outlook: