Hi Shoppers,

The market really tried its best to trade lower yesterday.

Especially early on.

But it just couldn’t sell off, and the three major indices – S&P 500, Nasdaq, and Russell – all ended higher on the day.

I was also watching Apple (Ticker: AAPL) as it traded lower and then came back to close down $.37 on the day.

While the other indices’ charts are still intact to the upside, AAPL not so much.

I think it is ready to pull back a bit more.

Here is the chart:

Monday took out Friday’s high and formed a complete reversal creating that large red candle.

We had confirmation of trading lower on Tuesday.

I am thinking AAPL wants to trade back down to my old resistance/new support level coming in at $175.

Looking at the options:

I like next week’s puts.

Particularly the 177.50/172.50 put vertical.

You can buy the at the money (177.50) puts at a 20.53 implied volatility and sell the out of the money (172.50) puts at a 22.70 implied vol.

That is putting edge in your trade.

If the stock closes above $180, take your loss.

Trade Review

Wow, what a head fake in the iShares Russell 2000 (Ticker: IWM) on Monday!

But look what happened on Tuesday.

That thing is looking more bullish than ever. 

Next stop $188.50.

Thanks for Reading … See You Next Tuesday,

Licia Leslie