Hi Traders,

The S&P 500 closed at a record Tuesday and the Dow cleared 54,000 for the first time ever. My screen says buyers ran out of room right at the top of my channel.

So this week I'm trading both directions. I want puts on the index, and I want to own one of the big banks.

The Index Ran Out of Room

My idea for puts this week is the S&P 500, as the futures have traded to the top of my channel (the two parallel lines that mark where a contract has been finding its buyers and sellers) by $7.75. On a $7,800 underlying that is just about spot on!

Here it is on the chart with today's candle looking like a gravestone doji (the market pushes higher, then hands the entire gain back by the close, which is my signal the uptrend is changing):

I'm not looking for a crash or anything. Just a pullback to $7,700.

The rally that got us here ran on headlines. Oil dropped more than six percent to $75.32 on hopes the Strait of Hormuz reopens soon, and that one move carried the tape.

Underneath it, the market is thinner than a record close suggests. Piper Sandler's chief technician called this recovery good but not great, because participation is lagging. August through October is also the weakest three-month stretch of the year for the index, according to Bank of America.The VIX closed higher Tuesday while stocks ripped.

Somebody was paying up for protection into the highs.

Now wait for a confirmation of trading lower on Thursday before purchasing those puts. Use a close back over $7,755 as your stop loss.

The S&P 500 is the scoreboard everybody checks. It's about 500 of the largest US companies spread across all 11 sectors, and technology carries the heaviest weight by far. That's why a 2.59 percent day in the Nasdaq drags the entire index to a record. When it stalls at the top of a channel, the biggest money in the market has stopped paying up.

Citi Is Back in the Pitchfork

My favorite to trade higher is Citigroup (C), as the stock has made its way back into my pitchfork clearing the most recent highs:

We have RSI moving bullishly with MACD just crossing bullish (two momentum gauges that measure whether a stock is gaining or losing steam).

The fundamentals back up the chart. Citi's second quarter brought in $24.8 billion, its biggest revenue quarter in a decade, with earnings of $3.15 a share against the $2.74 Wall Street wanted.

Management followed it with a $30 billion buyback and a 12 percent dividend raise.The stock sold off anyway, down to $134 on the print, because Citi held its full-year return target steady while stepping up spending.

It bottomed near $132 at the end of July and has climbed back over $137 since.

That's the reset my pitchfork was waiting for.

The top of the channel comes in at $148, which lines up with the 52-week high, but I am targeting $144, the highs of early July. Use a close below $137 as your stop loss.

That target doesn't ask for much. UBS trimmed its number to $142 on Monday, and the average analyst target still sits above $155.

C is one of the largest diversified financial companies on the planet, a holding company running banking, trading, and consumer products for individuals, corporations, and governments across more than 160 countries.

Markets and Banking are carrying the stock. Trading revenue and deal fees turned the slowest of the big three banks into this year's leader.

What the Crew Does With These Monday

My two names go in the pile with everybody else's. Mark and the crew work through all 10 live on the Ticker Highlight Show and turn the winner into an option trade.

So what will the crew choose for the Ticker Highlight pick of the week?

Tap this link, pick your own subscription rate, and get Monday's pick as soon as it hits.

Trade Accordingly,

Licia Leslie