Options Outlook: Watch Out For The Fed And Apple's Earnings Report

Central banks made for the best week in a long time. On Friday, the PowerShares QQQ Trust, Series 1 (ETF) QQQ was less than a one-day tick away from a new high, yet nothing has changed with regards to the fears that have been fretted over for the last two months.

Looking into this week, central banks will play a role again; The U.S. Fed rate decision could be another trigger. However, it is now consensus that there will be no rate hike, so the blindside could be to the downside -- unless Janet Yellen spills more fuel onto the bull fire.

Related Link: High Hopes For Apple, Alibaba, Other Earnings This Week

Apple Inc. AAPL will report earnings on Tuesday and it will certainly move markets; The stock alone accounts for about 20 percent of the QQQ. So if it moves 7 percent like Alphabet Inc GOOG GOOGL did, it could translate into about a 1.4 percent corresponding move in the QQQ. Add to it the infectious effect that such a move would have on other techs and the market could repeat last week's performance.

Bottom line: Don't fight the Fed or earnings too closely. Avoiding the short-dated trades and going longer in time allows a trader to set short trades that are not immediately in front of danger.