the stock market broke the resistance at about 3230 on Monday. This new high pushes the market back into the positive for the entire year.
But on Tuesday the stock market started to decline. News hit radar that Apple’s iPhone sales are slowing. Also, senators announced that the next stimulus actions probably will not be done next week.
What can we expect from the next few days? Read this article for a full update on the stock markets.
The earnings season has opened. Microsoft, Tesla, Chipotle Mexican Grill, CSX and Las Vegas Sands report today after the closing bell.
This earnings season will be very important for testing traders sentiment against the background fear of increasing coronavirus cases in the US.
Positive results could boost indices to move up a little more. Especially if the broken resistance is tested. This could become a support and bounce zone after a mild pullback takes place.
We have also to consider that all of the factors from the previous articles are still in force. This includes the China-US shadow war and the upcoming US elections.
So how can an options trader act in this market conditions?
Well, we can follow the current bullish sentiment. But remember: a downside protection as we wrote in previous articles is even more necessary to create a delta edge (delta measures the rate of change of option value with respect to changes in the underlying asset’s price).
Otherwise? Well, options traders can trade not only the expected direction but also volatility. Earnings season is a very good time to apply these specific strategies.
Curious how to apply volatility strategies on a bullish stock market with downside risks and an upcoming earning season? You can by joining our options course, which explains everything from A to Z (see below).
Thinking about options but not sure yet? There are a couple of ways to move forward before committing to the course or educational signal service. Here is how you can stay in touch:
If you are ready to move forward, then you can choose from:
Marco Doni – ecs.OPTIONS expert and CNBC contributor
The articles are not intended to give any advice on how to invest money, they are just for educational purposes.