The bounce off the June low has ticked a few boxes indicating it is a reversal but it isn’t time to count chickens, or unrealized gains, just yet. Here is something to consider that you may overlook.

The S&P has seen a strong move through the 50 day moving average and appears to have found some momentum, but it has cooled down as it hit the June high. That would be a key point of potential resistance that could thwart this rally and send the markets back down.

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With most traders expecting this rally to continue, put options on the SPY offer a potentially cheap way to play the downside. If the rally does fail at this resistance, the pay off on those puts could be juicy. If you look at the put options and find a strike price that fits your risk profile (I.E. I am willing to risk this much for the potential that this could play out big) it is a trade to take a look at.

Wendy Kirkland has been helping traders spot this kind of opportunities in her Smart Paycheck program for years. If you haven’t looked at it in the past, check it out here.

Keep learning and trade wisely,

John Boyer


Market Wealth Daily