Commentary for last week
The SP500 index had the worst first week of the year in history. The price declined about 6.09% in a single week.
China was blamed as the cause of a broad market decline decline that spread around the world. But actually it is time for the bull market to have a correction after rallying for six years. The bus is too full.
Based on SPY closing price, we have a long-term selling signal. That means the Bear market is beginning.
Last week’s trades
Last week’s trades commanded unusually rich premiums, especially early in the week. Traders smelled a decline and were looking for Puts to hedge long positions. We sold Puts with strikes at 1920 and 1900 at decent prices.
Friday afternoon we covered all our positions for a few pennies each, primarily because we we wanted to leave for the day and didn’t want to leave a position open.
It was a good break, because the 1920 Puts got caught in the late afternoon crash and ended up about 9 point in the money. But all our trades were profitable in the end.
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