Below is technical analysis based on chart readings. Refer to chart for macro commentary.
SP500 meaningfully tested 3000 five times in the past 12 months.
First two formed an M resistance - didn't break through. Third time was also two very close attempts - didn't break through. Finally, in July, we have seen 3000+ twice. One's already past us, the other one - we are in it right now. Does this look familiar to you? Another M shape maybe? Coupled with the macro conditions, I believe the market cannot go much higher from now on, and will correct 10-15% by Dec 2019.
I have sold my SPY . Planning to enter below strategy this week:
Short 270 SPY call Dec2019
Long 300 SPY call Dec2019
Initial credit to buy TLT
Monthly covered call on TLT
I will close above strategy by Dec 2019. Fingers crossed.
I like your descriptions on chart. A DCF valuation of the S&P500 reveals it is about 15% overvalued also using growth rate of 5% and discount rate of 8.6%. Apple announces earnings tomorrow, I'm expecting a drop in earnings which could be the catalyst for a drop in the indices. The FAANGS are looking high and overvalued, Netflix has dropped, Apple should drop tomorrow and Amazon is looking ripe for a fall. For an options play, I'd prefer an in the money put on the SPY rather than a spread. I think AAPL, UBER, SQ, GDDY AND TSLA will fall quite hard soon. TSLAs drop after earnings a few days ago is a harbinger for this group to fall. Good luck!
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@victorko, thanks for the comment. Appreciate your additional analysis on FAANG and suggestion on option play. Happy trading!