Futures were showing a slightly higher open ahead of midnight but turned into pumpkins afterwards and ahead of the overseas markets opening. They recovered ahead of this morning’s open here at home but the choppy action continues as the zombies put pressure on Russia.
There is a lot of headline risk over the weekend with the referendum scheduled on Sunday for Crimea to join with Russia. The outcome will likely have serious consequences and the result will cause another response from head officials here at home on Monday.
For this reason, Wall Street is nervous.
We mentioned the other indexes could follow the Dow’s test to their 50-day MA’s (moving averages) and as option traders, next week could offer a great opportunity to play this move, or, a possible rebound from here.
Most slick talking pros are hoping for a 5%-10% pullback, and are saying they will buy it, but they missed the gravy train all of last year and most of this year. Although the action has been volatile, fresh all-times highs have been set and they may not get the opportunity to “get in” this time around if Monday’s open is strong.
This would assume all goes well over the weekend but the word “assume” can be damaging if there is a continued selloff and long positions are taken today.
Although it has been a slightly down week, we were well prepared for the action as we limited our exposure while locking in a monster call option winner (WWE, up 203%) and a few other breakeven trades.
Our plan was to trim our Daily and Weekly portfolios where we could to lock-in gains and to prepare for the possible upcoming volatility.
While we normally don’t like to add new positions ahead of the weekend, we’ve had a phenomenal first quarter so we can nibble a little bit and be aggressive while the big boys play catch up. We are adding 2 New Trades today.
As we make the turn, the Dow is lower by 10 points to 16,099 while the S&P 500 is down a point to 1,844. The Nasdaq is down 5 points to 4,255 and the Russell 2K is up a 6-pack to 1,182.
Meanwhile, the S&P Volatility Index ($VIX, 16.89, up 0.67) is up 4% and has traded to a high of 17.29. While we have mentioned most suit-and-ties ignore the VIX, once again it is giving us very telling clues on if a bottom is in or if there will be further weakness. We should know by Monday’s close how next week unfolds but our feeling is there could be a bull party if Putin is slow playing his hand.
Subscribers, check the Members Area for the New Trade and current updates. We also have a Profit Alert on a trade up 21%.
We will be back Sunday night with the Weekly Wrap and Monday morning with the Daily. You will not want to miss either issue. Until then, have a great weekend everyone!
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