The S&P 500 is painting too many short side indicators near here to ignore the idea of a weeklys options short call spread 2855/2850 strikes, using under $500.00. The market internals collapsed at lunch, while the indices formed sell-signal candlesticks on many time frames. Prices are beyond my projected highs of the week, and sideways pivots for the month and week are present.
Buy low and sell high: It’s the cornerstone philosophy of trading and investing that has been pounded into us since we all looked at our first price chart. New converts to commodities, however, learn that selling high and buying back lower can be just as easy – and just as, if not more, effective in these versatile markets.
On the night of Nov. 9, the S&P 500 E-mini futures were halted after dropping 5% on the news that Trump had won the election. Gold was up 4.3% and the Nikkei was down 5.3%. Markets are more comfortable with the status quo and Hillary Clinton representative it in this election. The panic subsided and SPY actually closed up 0.54 from the previous day’s close.
We’ll take a big picture look at the gold market this week and the interplay between the market’s players and price before finishing with an option play that could capitalize on multiple factors leading to increased volatility in the December gold futures contract. Finally, this piece will be short on words and long on charts as we distill the action from monthly down to daily resolution.
Options writing is viewed as one of the more risky trading strategies, but Max Ansbacher has found a way to survive and thrive in the options niche for more than 39 years — 19 of those as principal at Ansbacher Investment Management, where his strategy has produced a compound annual return of 11.52% since 1996 and is up 22.24% year-to-date through July.
Implied volatility came screaming off as the stock market rallied on Tuesday. The catalyst was a warm and fuzzy feeling flowing from China after the central bank slashed interest rates in an effort to help stem the tide of selling.