Editor's Note

There is a good chance we are going to see a breakdown in the Russell soon. The index finally broke short term support to close at a three-week low and the odds are good we are going to see a breakdown going into August. That is the weakest month of the year.


No New Bullish Plays


IWM - Russell 2000 ETF- ETF Description

The IWM is the ETF for the Russell 2000 and includes all 2,000 companies in that index. It tends to mimic the index and options are cheaper because of the smaller range of movement.

The Russell closed at a three-week low after failing to move higher while the Dow, S&P and Nasdaq were making new highs. With August normally the worst month of the year and the Fed rate cut already priced into the market there is a good chance the Russell could lead the market significantly lower.

Buy Sept $152 Put, currently $3.11, no stop loss.
Sell short Sept $147 Put, currently $1.83, no stop loss.
Net debit $1.28.