The March Mini S&P Index is down 3.50 points at 1105.00 this morning as I write. The included chart shows that the S&P continues to struggle every time prices reach near the 1114.00 area as it did for about the 10th time over the past month, yesterday. So far, the price pull backs off these highs have been shallow, so the overall upward bias in the S&P continues. The directional movement indicators are bullish but the ADX line continues to edge lower suggesting a lack of trend strength. There just doesn’t seem to be enough momentum to move stock prices much further up yet although you get the sense that eventually prices will push to higher levels, begrudgingly. This is still the classic climbing of the wall of worry which makes up many stock bull markets. I am content to hold on to our ratio call and ratio put spreads that we already have for now.
Followers of this letter should be long one March Mini S&P (1190 strike) call from 17.00 and short 2 March Mini S&P (1220) call options from 9.50.
You should also be long one March Mini S&P (1000.00 strike) put option from 23.00 points and short 2 March Mini S&P (935 strike) put options from 12.75 points each for a total credit of 2.50 points or $125 gross.
March Mini S&P options expire in 94 days.
David Hall
The information and opinions contained herein comes from sources believed to be reliable, but are not guaranteed as to accuracy or completeness. The risk of loss in trading futures and/or options can be substantial. Each investor must consider whether this is a suitable investment. When trading futures and/or options, it is possible to lose more than the full value of your account. All funds committed should be risk capital. Past performance is not necessarily indicative of future results.
This newsletter is not intended for dissemination to the public without prior approval from David Hall
