MTM Options Trader Newsletter - Option Trades for a Bearish Outlook

[image]() [image] This Week in the Market It was a bruising week for the market as stocks took a deep dive lower after an inflation number (CPI) missed expectations, and FedEx reiterated worsening business conditions, which caused its stock to tank. The major indexes’ moves above their daily 50-day moving averages were temporary with all three once again well below that level. Before last week the market had been making progress to the upside, but some numbers cannot be ignored by market participants. A non-bullish to bearish bias makes sense if the indexes remain below their moving averages. As you might guess, implied volatility levels have spiked, testing levels made at the beginning of the month. Here is the only thing you need to know about this week: the FOMC meeting. The latest rate hike will take place Wednesday afternoon, and at the time of this writing there was just over a 75% chance the Fed members would boost rates 75 basis points. The other potential option is a full point rate hike. What might be just as important is what Fed Chair Powell says afterward. Either way, it will most likely result in some very turbulent activity in the market this week. Several other economic reports are due out this week, including a couple of housing numbers. As always, sitting on your hands and being flat might be your smartest position, and collars might be your best option and friend as an investor. Have a healthy, safe and dynamic week! Sep 20: Housing Starts Sep 21: Existing Home Sales Sep 21: FOMC Sep 22: Jobless Claims Sep 22: Current Account Sep 22; Leading Economic Indicators [Read Our Blog]( Option Trades for a Bearish Outlook Several weeks ago, we looked at option strategies for a bullish forecast for the market, underlying or both. Today we will explore a couple of option strategies for a bearish outlook. As we did previously, let’s consider a few examples of a bearish outlook either for the market or an individual underlying. Bearish The three most bearish opportunities in regard to technical analysis are a stock or the market breaking through support, a stock in a downtrend and a bearish reversal at resistance. A bearish move through a support level may be the biggest potential... [Continue Reading ...]( MTM Watchlist Here are a few trade ideas we may look at this week in group coaching class: SPY – We have consistently looked at bear calls and at times iron condors at significant support and resistance levels. Expect that trend to continue into this week. VLO – If the market keeps dropping it will most likely take VLO with it. But if it doesn’t, the stock rallied off its 200-day moving average. Potential bull call spreads may be considered. TSLA – Here is a stock that has shown relative strength compared with the market even closing flat on Friday. Potential bull puts or short iron condors will be explored. [image]() The strategies in this newsletter are for educational and informative purposes only. All information disclosed in this newsletter should not be considered complete in its entirety. Market Taker Mentoring, Inc. will not be held responsible for changes, oversights, errors or omissions. Dates, prices, news and other information may not be accurate. Please verify all information before trading. You alone are responsible for your own investment decisions. Options involve risk and are not suitable for all investors. Before trading options, please read Characteristics and Risks of Standardized Option (ODD), which can be obtained from your broker; by calling (888) OPTIONS; or from The Options Clearing Corp., 125 S. Franklin St., Suite 1200, Chicago, IL 60606. No statement in this newsletter is intended to be a recommendation or solicitation to buy or sell any security or to provide investment or trading advice. Traders and investors considering options should consult a professional tax advisor as to how taxes may affect the outcome of contemplated options transactions. Copyright Market Taker Mentoring, Inc. 2008 - 2022. All rights reserved. Reproducing or redistributing this content is a violation of federal law. [image] If you do not wish to be contacted via email, you can unsubscribe using this link: [Unsubscribe]( Unsubscribing from email notifications DOES NOT cancel your class, subscription or recurring payments. We recommend that current students do not unsubscribe from email notifications. If you unsubscribe from email notifications, you will not be notified on how to access the classes or subscriptions in which you are enrolled. Market Taker Mentoring, Inc. PO Box 117 Frankfort, Illinois 60423 United States