Marty Schwartz is known as the Pit Bull. He has a trade he looks for every month. Many analysts refer to this trade as the Pit Bull low. This trade was taught to me by one of the Pit Bull’s best friends. I love this trade and I look for it each and every month. This trade is crazy good.
Schwartz looks for SPX to trade at a low for the week on the Thursday / Friday, a week before options expiration Friday. Options expire on the 3rd Friday of every month, so I was taught to look for a weekly low one week earlier on the Thursday or Friday.
The SPX chart below shows that eight of the past nine Pit Bull Low trades have worked to perfection. Only last month did the trade not work…mind you the low came in on Wednesday so it was close.
Moving forward, options expiration this month is August 19. I am bearish the indices this week looking for a weekly low this coming Thursday or Friday. I like the odds of it occurring. I will trade the indices from the short side all week.