Editors Note:

Market rallies are wonderful, especially when they come after periods of high volatility and negative performance. However, after a +348 point spike on the Dow, +131 on the Nasdaq and +46 on the S&P, to add a new position at the open the next day would be stupid.

While there are no guarantees the odds favor a down day on Wednesday. Profits need to be taken and winning plays closed. This could be simply a morning drop, full day decline or a couple days of choppy trading.

A lot of investors believe they have to make a new trade every day. Those are the ones that end up losing money in the long term. It is best to trade only when it makes sense to trade. It does not make sense to go long a new position after a nearly 3% one day rally on the Nasdaq.

We currently have 17 positions. That is far too many to handle if the market reverses course significantly. Adding another one in a severely overbought market is just asking for trouble. I do recommend buying any material dip because market sentiment has changed. I believe the worst is behind us but that does not mean the volatility is over.

Be patient. There is always another day to trade if you have money left to invest.


NEW DIRECTIONAL CALL PLAYS


No New Bullish Plays


NEW DIRECTIONAL PUT PLAYS


No New Bearish Plays