We don’t spot the Cup w/ Handle formation very often, but we see it in TRV. For now we prefer bearish strategies as it battles resistance at 75.  That said, if we see two consecutive closes above 75 we will switch that directional bias to bullish with a quickness.

Best to wait and see.  Alerts are set at 75.10, at which point we intend to put in some bearish Options strategies in TRV.

Major market ETF SPY is sitting almost exactly in the middle of a long-term upward-trending channel. On top of that, it’s just recently bounced off it’s 200-day simple moving average, and is now running up against the bottom of its 50-day simple moving average. We’re setting up for a potentially smaller near-term range while inside a longer-term range, which creates some interesting trading opportunities. 

More to come soon - we may be looking into double diagonals early next week. Until then, enjoy the weekend!

EEM, the Emerging Markets ETF, has been really unpredictable within its range this year. That range is $36 to $44, but it’s been a guessing game as to where it would stabilize between those points. Right now we’re looking at a recent bump upward off the 200-day simple moving average, and a seemingly-meaningful support level at $40. 

We tried a few different regression channels before settling for the one you see on the chart above. Each of them (varied based on starting point) gave us a mean around $40 for today - meaning that the push off from that level last week likely wasn’t a coincidence. If we were going to enter a trade in EEM we’d start at that point.

Since we’ve gapped upward to the 200-day SMA now, there could be an argument made that a return to $40 is imminent, though we don’t necessarily see it that way. If you wanted to be a little adventurous you could try a quick bearish debit spread, banking on a $1 move and the associated profits. 

If a quick trade isn’t your style, the regression channel is pointed downward, meaning that a longer-duration bearish trade may also be reasonable. 

We’ll revisit EEM in a few weeks when we get tired of trading tech stocks. In the meantime, you may want to sign up for our Options Strategy Alerts to make sure you don’t miss the trade when we send it out! 

First Solar gives us a chance to take a breather and talk about a pretty simple chart. There’s not a lot going on here… we’ve got a stock that fell from big prices to small prices, and is gradually creeping back upward. 

Take a look at the dark grey circle in July - that’s the point where the 20-day simple moving average crossed above the 50-day SMA for the first time since FSLR’s precipitous drop. Most technical analysts would consider this a bullish sign, and we agreed. As it turns out, we were right, and FSLR doubled in price in the next 60 days. 

Since the top of that rally the stock has been limited within an ascending triangle (the black lines on the chart). We’re getting close to the point of that triangle, meaning that it’s time for FSLR to decide which way it wants to break… back to the downside (or continuing sideways), which would break the bottom of the triangle, or to the upside, which should take the stock near $40 per share if our measurements hold any weight. 

Normally we’d be very happy to sell $26 calls as part of a spread, to get our breakeven point above the top of the triangle. This month is a little different because the point of the triangle comes before December expiration, meaning we may be more likely to see a break upward soon. As it is, a ratio spread, or another trade that rewards us for taking a little upside bet, may be in order. 

We haven’t decided yet which trade makes sense, but you can bet our Options Strategy Alert subscribers will hear more about this stock in the next few weeks. Make sure you’re signed up, so you don’t miss out! 

AMZN is an intriguing bullish pick right now, with support coming from a long-term downward line and its 200-day simple moving average. There’s already been a little spike after yesterday’s touch of the SMA, so there’s a little more reason to believe in $220 as a support level. Yesterday we looked at bull put spreads, and we’ll take a closer look this afternoon. If this support level holds into early next week (after expiration) then we’ll definitely be looking to put on a December trade. 
 

First Solar (FSLR) looks to be near the top of a 3-month rising triangle pattern, and could break out of this soon. We think it’s a little more likely that $26 acts as resistance again, and we see a return in the stock’s price to $24 at least once more time before breaking upward, possible all the way to $32 or $35, based on the size of the triangle. 

The image shows the stock creeping upward over the last 90+ days, and it doesn’t look to be stopping, so we’re tentatively going to look at bullish strategies later this week, to see if a nice breakout emerges from this medium-term pattern. We’ll shoot out the trade to our members if we see something worth entering! If you want to hear more and you’re not a member, click here to join!  

It’s been a little while since we blogged about SPY, so here goes: we’re sitting right on a long-term upward-trending support level, and we’re bumping up against a less-important resistance line (see chart). What does this mean? We’re thinking it’s bad news for bulls, as we’ll probably see sustained sideways movement, or maybe a little break upward followed by a pull-back. We’re definitely thinking this line will get violated sometime soon… particularly with elections coming up, the market may not be willing to take a bullish stand. 

If you’re an iron condor trader, this might be a nice time to jump in and hope actual volatility is lower than implied volatility, and take a little premium home before Thanksgiving break. Good luck! 

The last six times that IBM broke below its 200-day simple moving average it almost immediately reversed course and pushed back to the upside. This has been a consistent event since the crash in late 2008, and we’re not betting against it continuing this time. Even with significant volume and a big earnings crash, there’s enough here to warrant a cautiously bullish trade. We’re going to let things settle out over the weekend and see what Monday brings us, at which point it may be time to put on a trade! 

P.S. - Earn BIG with Earnings Alerts for only $99/year. This limited time Special Offer expires Thursday October 18th @ 11:59pm PST—NO EXCEPTIONS!!

FSLR (First Solar) is in a very interesting spot. In July we noted that the 20-day simple moving average crossed above the 50-day SMA, and we’ve just seen that positive step reversed. This would normally be a bearish sign, or at least give us pause… but the stock broke upwards through it’s 200-day SMA a few days ago. 

This is a significant achievement… as long-term owners of FSLR will tell you, it’s been a long time since it traded above that average (July of last year, to be exact). At the very least, the 200-Day SMA should serve as a new support level for a while, and we’ll see what happens in the short term as the faster moving averages duke it out.

Earnings come out on the 25th, and barring some other significant price movements, we may be inclined to take a bullish trade and bet that the 200-day SMA is a significant level. 

P.S. - Earn BIG with Earnings Alerts for only $99/year. This limited time Special Offer expires Thursday October 18th @ 11:59pm PST—NO EXCEPTIONS!!

We posted a bear call spread on NFLX for our premier members a few days ago, and the last two days haven’t been kind to that trade. NFLX is up almost 10% over that time frame, and our trade has gone from out-of-the-money to in-the-money. We’re not daunted though, and we’re looking to the Netflix chart for a little relief. 

We’re pushing to the top of the post-earnings range from last quarter’s announcement, and nearing an earnings report later this month. 5 of the last 6 earnings responses in NFLX have been negative, including some enormous 20%+ drops. If that happens again our trade will be back on the good side. 

If you’re not already in a trade, this is a pretty good spot for selling NFLX, up against an important price level and with a history of failing to meet expectations. 

Apple’s been all the news the past few days. After pushing past $700 and nearly doubling it price over the course of a calendar year, we’ve seen an 8% sell-off to the $655 range. If you got long at $700, it’s not happy news, but in general this may not be a bad thing for bulls. As you can see on the chart, AAPL is resting on its 50-day simple moving average now, and is near a long-term support level. We’ve already sent a trade idea to our premier members, and there may be more if see another opportunity. 

A few days ago we passed along to our premier members a trade idea in XLF, specifically, a butterfly spread designed to profit from a pullback in the price of this financial-sector ETF. Well, in evaluating this trade we’re noticing a potential new source of support near $16, and we’re wondering how long this will hold. It’s a very, very short term mark right now, but it was the top of a relevant price range for more than a month earlier this year. We’ll check back after September options expire this weekend and see if there’s more meat here to chew on. 

TLT, the popular 20-year bond ETF, is sitting right back on resistance turned support after bouncing off the $121 level last month. This is the third test of the level, which is usually a pretty important one. We believed in put-selling last time this happened, and we’re in favor of it again - we’ll be looking to the put spreads between $115 and $118 in October for trade ideas today and tomorrow.

If you’re a premier member, keep your eyes open. If not, you can sign up now right here!