A High-Risk, High-Reward Retail Play

Today may be just what the options doctor ordered. A push higher for at least the majority of the day would serve to sap out a good portion of the premiums sitting in May put contracts. The bad news is that this is often a temporary situation, not necessarily the start to a recovery rally.

I do think this bounce could get as high as $135.20 on the SPDR S&P 500 (SPY) before it fizzles. I would set a trailing stop around $133.88 right now and let the morning work itself out. Treasuries and volatility are trending opposite of equities, and that is a good sign for bulls, so as long as we hold support and do not see Treasuries turn higher, then I would simply keep a trailing stop on longs. Yesterday, we didn't see this action in Treasuries and volatility while the market was higher. Ignoring it made for a painful afternoon....386 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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