The March Mini S&P Index is up 1.50 points at 1123.50 this morning as I write. The included chart shows that the S&P index continues to edge higher, seemingly every day, relentlessly as many analysts continue to look for corrections, every day, relentlessly. I will begin to worry when the analysts quit expecting corrections every day. The other way to look at this is that as long as the Fed has a zero interest rate policy and short term rates are less than 1%, there really aren’t any other good alternatives to get a return on your money outside of the stock market. Stock market values can go up for a long time under this scenario. The directional movement indicators are bullish and the ADX line is edging higher. I recommend holding current positions.
Followers of this letter should be:
Long one March Mini S&P (1190.00 strike) call option from 17.00 points and short 2 March Mini S&P (1220.00 strike) call options from 9.50 points each for a total credit of 2.00 points or $100 gross.
Long one March Mini S&P (1000.00 strike) put option from 23.00 points and short 2 March Mini S&P (935.00 strike) put options from 12.75 points each for a total credit of 2.50 points or $125 gross.
Long one March Mini S&P futures contract from 1125.50 and short one March Mini S&P (1080.00 strike) call option from 70.75 points. (This is a deep in-the-money covered write trade.)
March Mini S&P options expire in 78 days.
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.