The market last Friday opened 122 points up, right to our 10,416 top, and the risk traders still holding the Sept500C were able to sell to highs of 5.85 by 9.49 a.m. for an 84 to 114% return depending upon your first entry. We hit profits every day this past week!
It is time to move to October options, and time to review where the next resistance line will be, and IF we are in a short term bull rally. As you review the economic calendar make note that the early part of the week has little "news" and traders are just returning to the market.
I'm pleased personally that the market held up three days to the upside and was able to hit good resistance areas. 10,550 is strong resistance. If the market can move 10,609 or upwards this week we have a short term bull rally, that has come in good incremental stages, and not huge run ups, a good sign of steady upside.
But it's a market filled with FEAR and uncertainty, and definitely governed by the electronic traders playing for pennies.
We will not yet buy a put, but will follow our rules on BEST buy only on a call purchase. There is ALWAYS a way to make money in the stock market.
And trader KG, who uses our support and resistance lines, wrote :
Floyd,
Bought the 500 sept put for $7.80 right around r-3 and sold for $9.30 a quick 20% profit
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