Predicting the Future

Heather Cullen

Heather Cullen

In The Money
The Simple Options Strategy that Always Beats the Market

SPY 24 Jul 2021
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Predicting the future

In the last ITM Update I said ‘the bounce off the 50 day moving average – don’t be surprised if it happens again’ – and guess what? It did exactly that! There was a market pullback, and SPY bounced off the 50-day moving average as I  predicted.

I am thinking of starting a new career as a fortune teller. <Just joking!>

If you look at the chart above you will see that that is SIX times it has happened this year. Investors can be so predictable.

What does this tell us? That today the bull market is still intact. It will end sometime, of course, all bull markets do eventually end. But not right now by the looks of things. We’ll stay on the lookout for danger signs, but we are not going to panic over a few normal down days.

How it the ITM Strategy going?

Everyone will have a different result because people started at different times, but everyone must be in profit no matter when you started. And those of you who have been doing the ITM Strategy with $10,000 from the beginning last September have these results:

  • $21,600 – Lazy ITM
  • $24,900 – Turbo (roll up 6 April)
  • $23,700 – Turbo (roll up and out 11 April)

Not bad, don’t you think? For a week when the stock market had the worst down day since February we have finished rather nicely.

Candlesticks, reversals and confirmation

In ITM we look at candlestick patterns, and here we have a classic example of a bottom reversal. The doji on Monday marked the bottom of the downturn, and was been confirmed by the green candles for the next four days.

That’s not to say there won’t be another downturn. Of course, there will be, it always happens. What we don’t know is when it is going to happen. Until then, we will watch out for our danger signals, but until we see them, we sit tight and (try to) keep calm.

Rolling out and rolling up

Last ITM Update I gave a heads up that it is time when you have to roll out any September 2021 options. It doesn’t matter what day you do this because you will be selling and buying on the same day. If you sell low, you will buy low, if you sell high, you will buy high. It evens out.

You don’t want the hassle of being exercised, so remember to roll in the next few days.

Happy Trading

Heather Cullen Author Signature