Since the Federal Reserve decided not to taper this month, a bullish scenario for the rest of the year is starting to emerge. This big piece of policy allows for a bullish trade in SPY to begin with a 25% commitment. The target for the trade would be $180.00. Currently the SPY trades at $171.61.
Because there are other large pieces to the end of year puzzle to be fit, an argument not to fully commit needs to be heeded. The government still needs to work through their funding issues. Any stoppage will have a negative effect on the market and will put the bullish trade in jeopardy. Corporate earnings are due out next month. Even thought there might be some bad news earnings wise, it is the guidance that is important. Bad guidance will end the bullish trade. Decent guidance will propel the trade.
If the government avoids a shutdown, and there is positive guidance, going full trade would make sense. But if there is a shutdown, and guidance fails, the bullish trade should end at your stop loss.
Current holdings for The Keane Trade are:
- Ford Oct $18.00 call options (link here)
A previous post regarding the idea behind the trade can be found here.
**Disclaimer - This blog is just reporting information and should not be considered as a recommendation to buy or sell any financial instrument. Do your due diligence before investing or trading. **