Pre-Market Gap Up Puts More Opportunity On The Table
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ETF Trade Watch
The pre-market looks pretty bullish at the moment after a gap up over night. Now, we will watch to see if the market is ready to continue its move higher or if that was the last push before falling back down. One thing is for sure, if we are still in a “bear market” then this is definitely a bear market rally. Only time will tell if we descend back into bear market territory. Until then, we will continue to play what the market puts in front of us.
The two ETFs below could be a good place for us to start.
VanEck Oil Services ETF (OIH)
We are currently keeping our eye on oil as it looks like the price of this liquid gold could be making an attempt to push higher to the low 80s. However, this move may be on hold if the market pushes higher. One thing that is true with the Energy Sector is that it oftentimes moves in the opposite direction of the market. This is good in the sense that this play allows us to take both sides of the field.
If the market sells off after this recent run up, look for a long play on energy names. If the market continues to move higher, a short play could be on the table.
Consumer Discretionary Select Sector SPDR ETF (XLY)
Consumer Discretionary is still on the list of possible trade ideas for today. With this pre-market action, we could very well see this sector run up with the broader market in a rising tide lifts all boast type of situation. Look for market weakness to invalidate this trade, however.
For the full breakdown, be sure to watch my video below where I go over these sectors, as well as any others my students and I will be watching for this session.
If you want to join my students and I as we learn how to look at sector ETFs for our trades then you’ll want to become a member of my Smart Trades options trading service. Not only will you get all my trades, but you’ll also be a part of a growing community of like-minded traders looking to learn and hone their options trading skills.
I look forward to trading with you, but until then, as always…
