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Originaly posted by Michael Hodges.


S&P 500 Trading At Long Term Support Line

S&P 500
Call/Put = Call
Entry = Below 1660
Expiration = One Week


The S&P 500 has had a couple of down weeks. What this has done is brought the index down to the long term trend line and put the index into oversold conditions. And right before the start of the fall trading season, the next FOMC minutes and the meaty portion of the 2nd half of the calendar year. Fear of change, fear of the Fed and fear of tapering have provided plenty of reason for short term, near sighted investors to flee the market.

What we have to remember is that tapering means the U.S. economy is strong enough in the FOMC’s eyes to move on by itself. We also have to remember that tapering is not tightening, there will still be asset purchases. There is also still the chance that the FOMC could increase or bring back assets purchases at any time that it sees fit. The long term trend is up and I am still bullish on the markets. I am trading a call on the S&p 500 with a target entry below 1660 and one week til expiration.




Gold Bouncing

Gold
Call/Put = Put
Entry = Above $1365
Expiration = One Week

Taper fears, the Middle East and plain old speculative buying have driven the price of gold way up. Gold has broken above one important resistance line and may have broken the long term down trend. This however does not mean that the trend is now up or that gold will keep rising. Likely, gold will be range bound for a while, at least until after the September round of central bank meetings. Until then I am going to play a put. The spike in gold was so sharp last week that I am expecting an equally strong test of support. I have a target entry above $1365 and am using one week of expiration.





Apple Dapple!

Apple
Call/Put = Call
Entry = Below $510
Expiration = One Week



Apple may have returned as a market leader. The stock, on the heels of an Icahn/Soros driven rally, has now broken above the $500 level. This break out has a target nearly $100 points higher but I am not holding my breath to see that. However, the stock is in play and I am trading a call this week. My target entry is below $510 with one week until expiry.