Option Strategies: .SPX
Hello everyone! Today i want to share some option strategies with you!
1.
$.SPX(.SPX)$ January Analysis
Contrary to what most people are thinking, SPX will break ATH again in the near future and we can see SPX run to 7000-7250+ by 2026.
2020 Analysis: COVID news spread and the market dropped -35% within 2 months. It Took 5 months after the March lows to move back above ATH’s. SPX then rallied to 4818 by Jan’22, a 1,425 point move or 42% gain above the previous ATH’s.
2022 Analysis: Fed started hiking rates due to inflation worries which made borrowing very expensive. They also began Quantitative Tightening which drained liquidity from financial markets. SPX dropped 28% since the Jan’22 highs until finally bottoming in Oct’22. SPX then rallied to 6100 by Dec’24, a 1,281 point move or 26% gain.
Current Analysis: The current market looks similar to the Aug’20-Nov’20 consolidation period before we started the next bull cycle. There’s 2 scenarios here, Scenario #1: We hold 5700 in January and break above the Dec’24 highs in February to start the next move higher. Scenario #2: We break below 5700 and possibly retest Jan’22 highs.
The bearish case is the worst case scenario and we lean towards the bullish scenario occurring as there is no real fundamental catalyst in the markets currently that would suggest a big downturn.
Once we break ATH’s we can see a move towards 7000 and possibly 7,250 by Jan’26!
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