Options Watchlist for September 28, 2011

27 Sep

It’s been a while since I put out an options watch list, but lately we have seen some great moves and option spreads are relatively tight compared to volatility. Here are the stocks we’re watching for tomorrow.

Longs: FAZ, RGLD, TZA, VIX,

Shorts: ACI, CTRP, DOW, DVN, EOG, FSLR, FWLT, GD, GES, GS, HIG, JPM, MET, MMM, MS, MUR, OPEN, PBR, PXP, SU, TS, UPL, VECO

You’ll notice the long plays are inverse ETFs. That’s right ALL of these stocks are bearish plays. This means one of two things will happen tomorrow…

Always Prepare for at Least Two Scenarios

1. More than likely we will gap down given so many of these short setups occur. If you’re not familiar with the TJMacTrading entry methods we like to wait for a break of the low of the high bar, before entering (as apposed to entering a day earlier in anticipation).

If we do open lower and continue to sell off with strongly negative breadth it’s likely we sell off into the close and result in a big body candle on the daily (perhaps selling off down to the S&P 1146 level).

2. The second option is that we fail all of these short setups. A failed setup is stronger than the setup itself, mostly because everyone is not expecting it. If this happens we would continue higher towards the S&P 1225 level.

 

 

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