Setting Up for FOMC. Buying Jan 18 SPY 258 Calls. I want to be positioned long before the 2:00 PM ET Wednesday FOMC meeting. Powell is widely expected to raise rates while also signalling the tightening cycle is near completion during the 2:30 PM press conference. That’s why I think a quick relief rally could occur. It’s a high risk play in that I will be very right or very wrong and therefore I could enter a strap straddle (a “lopsided” bullish straddle with a 2 to 1 call to put ratio).
Shorting XLB. After a good run-up with the US-China Trade War “cease fire” rumors (read: Shenanigans), Basic Materials rallied right into a trend following downtrend. It’s the correction that I am looking to take advantage of as well as many of the heavily weighted names in the ETF that are ripe for a short as well.
Foundation: Trade of the Week Take Two
Bruce’s Setup on EFX 9/25/17