These Levels Are Like Magnets for Monday Morning.
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These Levels Are Like Magnets for Monday Morning.

John F. Carter - January 11, 2016

If we get a modest gap down we are planning to take profits on these positions. Although we have targets further down, we are entering into extreme oversold territory, where a violent short covering rally is just a news announcement away.

Hi everybody, this is John, and welcome to the free video. We're just going to take a quick look at the some of the ETFs here for Simpler Options update. I did want to wait until the futures markets opened. As I'm doing this, the NASDAQ is down 27 points. It's not far enough to indicate a potential for a Monday crash, but it is far enough to say, "Hey, the downside pressure's going to continue. Where is it going to go down to?"

So let's take a look at the ETFs. So I'm at a minimum looking for the SPYders to test $189.99, give or take. That's not very far from where we closed. That's about 20 S&P points. Now, in our trading service we've got the four accounts: the 5k account, the 15k account, the 45k account, and the 180k account. And we have in the 5k account some puts on the QQQs left, 45k account some puts on Amazon, and then on the 180k account, we got puts on SPYders, SPX, and Amazon. And what I'm looking at here is, "you know what, it would be great if the NASDAQ futures opened up down 25 points on Monday. In that case I'd be looking to take profits on those puts on the QQQs, puts on the SPYders, puts on SPX, and puts on Amazon. Obviously, if we open up below that, then things could get interesting. If we look at the QQQs, got a little bit more downside room there, down at $102.07. In my experience, once we get this close to a treeline, you are generally going to hit the whole thing, right?

Now, one thing that comes up here. Okay, we'll come back to that, but let's look at Amazon. So Amazon, now, looks like it's almost there, but keep in mind, it closed at $608.36, so it's about give or take $6 or $7 away from its target so the one question that comes up here then, because we bought puts on Amazon that expired 12 days out, okay, so if we get to $601.53 early Monday, do we just take the money and run, and take the profits, or do we then sell a put against it that's 5 days out. Anyway, so this would be, you know, we bought puts that expire next week, the week after next but could we sell puts that expire this week? That's called a diagonal, and it is a very very powerful tool to use, especially in these kind of markets.

Reminder: If you are interested in learning the intermediate to advanced diagonal strategies that I like to use, that I learned from Bruce, he's going to be doing a class utilizing diagonals to increase flexibility. This is critical when a market like this is this volatile. It really opens up the different possibilities as to what you can do with the position, as opposed to "do you take the profits," do you leg into a diagonal and kind of increase the profitability, or do you defend positions that you have with this? This is going to be Wednesday, January 13th from 6pm to 9pm CST. This is a 3 hour class, not the normal 4 hour class, because there is a ton of information here. If you then want to see how this works in a live environment, Bruce is going to do an additional Live Trading segment on Thursday, January 14th from 12pm to 3pm; another 3 hour class. Everything you ever wanted to know about intermediate to advanced strategies, and utilizing diagonals, and you can use them for short-term, like weekly options, or longer-term, like 30 to 60 days out, like he even likes to use for income. So if you're interested in this, and you want to grab a seat, simply go to:

You can go to this page, too. It'll tell you more details if you need to know a little bit more detail about it. The three hour class is just $197, and the way these are priced is that hey, this is something that if you're doing a one lot trade, it could pay for itself. If you want to see and do this live, which I always recommend, it's kind of like, if you're going to read a book on playing golf, you can learn a lot of stuff, but if you go to the driving range, you want to sit there and have somebody who's done before watch you, to kind of give you tips, on like, "you need to loosen your grip on the club." You do that in a lot of that.

So this live event is $297, and it includes this, and there you go. I'll be on there as a student, because I always learn something new in these kind of classes. You all have a fantastic rest of the weekend, and we'll see you at the next update.