If you are an options seller, this is a good opportunity to collect premium on the upside of the S&P500. That of course means selling (writing) a call; the strike should be above the recent "price contextW, i.e. above 2080. Choose a minimum of 6 weeks until expiration. You may also sell a call spread, e.g short the Call 2080 and long the Call 2120. The analysis is simple MACD in standard settings 12-26-9 on a daily basis, and the recent price high. That is all. All we want is for the SPX500 staying below 2080 for at least several weeks. You may use the SPX options, or the E-mini S&P500 Futures Options, or the SPY Options (the latter two must be adjusted for current price relation to the base SPX500)
too many fakeouts... this spx could move 50 pts in one night up or down.
olieser
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Nobody knows anything beforehand, of course. But experience tells that the likelyhood for limited upside in this situation is great.
The art of selling options (as a matter of fact, with any trading) is: You never know whether the next trade will be a winner. But a strategie that has shown a high likelyhood for success in the past will likely pay off in the future,
all trades on aggregate considered.
Reekardo
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so now do you continute to sell premium with price above all moving averages?
olieser
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I am not going to, since the market is the master. It does certainly look more bullish now. I have changed half of it into premium on the downside, which is generally more juicy. I do that typically for even money after expenses. If the market keeps climbing I might change the rest, too. But first it may be advisable to let expiration week pass and watch the markets Monday.
olieser
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as a comtinuation: Monday after expiration week could have been the start of a consolidation. However, even with accompanying bearisch news from WTI crude oil (Doha-meeting), which was completely bought back (reversed) intraday, and then some, the market has decided to go (at least somewhat) bullish from here.
Experience has it, that from recent highs (yesterday), an immediate crash is unlikely.
Good enough to sell premium below the market. That I'll do.
I'll figure out which indexes. RUT and NDX seem strong but I have not decided yet.
And all will be in small size, as always. I rather do it in tranches than be whip-sawed with too large positions.