ITM Update: Predicting the Future

Heather Cullen

Heather Cullen

Author
In The Money

ITM Update: Predicting the Future

In last weekend’s post I said ‘don’t be surprised if it happens again’ – and guess what? It did! There was a market pullback, and SPY bounced off the 50-day moving average just as I had predicted. I am thinking of starting a new career as a seer. (Just joking)

Look at the chart above. That’s SIX times this has happened this year. Traders can be so predictable.

What does this tell us? That right now the bull market is still intact. It will end sometime, of course, all bull markets do. But not today by the looks of things. We’ll keep watching and being 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 everyone started at a different point, but all of you 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 will have these results:

 

  • $21,500 – Lazy ITM
  • $24,000 – Turbo (roll up 6 April)
  • $22,200 – Turbo (roll up and out 11 April)

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

Candlesticks, Reversals and Confirmation

In the ITM book, we looked at candlesticks and patterns, and here we have an almost textbook example of a bottom reversal. The doji (Monday) marked the bottom of the downturn, and it has been confirmed by the green candles moving up in the next four days.

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

Rolling Out and Up

Last week I gave a heads up that it is getting to the time when you have to roll out any September 2021 options. Because you will be selling and buying on the same day it doesn’t matter what day you do this. 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 do this in plenty of time, roll in the next week or so.

Happy Trading

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