It’s still a little difficult to believe.
90% probability of a hike today, and everything going on in Main Street is so far removed from what we’re seeing on Wall Street. Look at oil prices, look at diesel. That’s a shock to the system we probably haven’t even felt yet.
I was on with Schwab’s Big 3 this morning with three ideas, so let me walk you through them.
There’s a sector that has hit or exceeded the lower edge of its expected move for five consecutive weeks. Count them, five. The option market says it should travel three bucks and it’s gone further than that every single week.
That’s some fierce sell side activity, and it’s left statistically wild oversold conditions behind it. I’m a contrarian in there.
I’m looking for a brief but violent move back to the upside, and I used a $5 wide call spread to play it.
The second one is bearish, which is where I live anyway.
A product that got a nice bid a few weeks back and has done absolutely nothing since. It rallied, it flattened out, and now it feels like it’s rolling back over.
The people who got beaten up in this thing are not coming back, and I’m not going to overthink it.
I went all the way out to November on that one. A $5 wide put spread for a dollar, risking a buck to make five.
And the third one is a name I have a genuine love hate relationship with.
It’s sitting right underneath a big time technical resistance level and fighting with it today.
I saw heavy call buying this morning, which is incredibly bullish activity, and then it faded fast.
So I bear up, but minimally, and short term before its earnings. Three or four weeks is more than enough time for a little pullback, which is all I need.
Every strike, every expiration and every debit is in the segment.
===>Watch it here
To your success,
Don Kaufman
