Today, I have traded my first transaction for a bull spread. I used to do long call or put and short naked put, which are more risky instrument. My biggest down trade so far is a naked spy long call. I am starting to learn the option trading strategies and put into practice. I bought 2 SPY Nov 117/127 call spread for 6.57 today.
At current stage, I do not suspect the up momentum of US market, even though SPX sell off ugly to 1221 at 11AM. When SPX retest 1225 around 1pm, I feel very frustrated and desperate, asking myself what the hell the market is doing. No dip buyer? going to test 1200? I closed my brower and my cellphone, not want to care about what the fuzzy market was going to do. Luckily market had an unbelievable afternoon bounce. I do not think TA can predict this well. It is a day trading heaven. If I have enough capital to overcome the day trading restriction, I think I will be aggresive to trade this environment.
Tomorrow, the primary indicator should turn to positive, which is the first time since July 22nd. How long it will remain positive is a question. Last time it remained positive for two weeks with gradually distribution, then market sold off hard.
My take for the market is that we are going to continue going up for the rest of the week to touch 200MA (1260 zone). Then next week the market will be in a narrow zone for distribution. After that, the market will see a sharp sell off to test 1200-1220 zone again. It will become a critical time for the market after the selloff. If the market find the buyer again, we will overcome 200MA to have a year end rally. Otherwise, I feel another phase of bear sell-off period will come again.
I really hope the market will choose the first option instead of sell off.
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