The rise in the overnight futures is too tempting to pass up a couple index plays as well.
After I sent the last email I was still scanning charts and I think there are a couple more plays we can enter with a reasonable chance of succeeding on the Monday gap open.
I am going to add the Russell 2000 IWM ETF and the Dow Transports IYT ETF. Both are poised to gap significantly higher and hopefully we can hold some of those gains for the rest of the week.
IWM - Russell 2000 Index - $65.39
The Russell collapsed -12% over the last two weeks but remained farther over critical support than any other major index. I am going to recommend we sell an ATM put on the expectations the ETF will gap open by several points.
ENTER TRADE ONLY IF IWM is positive.
SELL MAY $65 PUT (IWM-10Q6500) currently $2.23 stop IWM @ $66.00
Chart of IWM
IYT - Dow Transports ETF - $77.66
Dow transports have been strong up until last week when the market killed everything. Stronger jobs report plus improving economics and a shortage of truck drivers should mean the transport sector is seeing better times.
ENTER TRADE ONLY IF IYT is positive.
SELL MAY $77 PUT (IYT-10Q7700) currently $1.90, stop IYT @ $78.00
Chart of IYT