Today the S&P 500 nudged yet another record high, but what may lie ahead?
Have a look at this chart below.
This is a six month daily chart of the S&P 500, nothing really sticks out does it?
But let's look closer. (Chart under this one)
()
The chart above is again the same chart of the S&P 500 6 month daily (top chart) however, what have done with this chart is outline for you the current price channel, I have also circled the most recent price action which is very close to the top of the channel.
Now it is possible that we do break out above the top of this channel however, a more likely scenario is that we hit it then balance lower. (If this does not happen, well keep on reading!)
As most of you know who follow my work, I am currently holding a straddle on ticker SPY, (the ETF which tracks of the S&P 500), I posted this to my website TradersChoice.net yesterday. (You are following my stock picks right?)
I also opened up a straddle on ticker VXX yesterday as well, (which I also posted to my website) however, I did close the calls side of that position as VXX began to fall as the trading day progressed. After I closed the calls side of VXX, I rode the puts into the market close. (I was able to pocket a nice profit by the end of the day using this strategy)-I hope you did as well.
With regard to my straddle position on SPY, I am still holding it waiting for the price action to give me a clear signal as to which direction it wants to move, either way because of my straddle I am sitting pretty and will pull a profit.
Gregory Mannarino