12/9 Best Idea For The Week Ahead

We got the strong close yesterday and sure enough we did finish with our 6th straight green weekly candle on the SPY for the first time in years. Although we have not moved much in the last 3 weeks, buyers are clearly stepping in and buying every dip. There were a couple times this week where yields fell and stocks didn’t go up that were concerning to me, but overall so many charts are bullish now, oil is near lows of the year, yields are at their lowest point in months, and the VIX hit its lowest point of the year this week.

There really isn’t much to say other than this is the point where you begin to lighten up and maybe add some VIX calls if you’re worried short term, and just wait for setups you like to emerge. Personally, I’ve said before, it’s hard to be selling puts or putting on new longs with the VIX at 12, you ideally would do that at a more normalized level at 20+. If I had to guess we probably see some selling in early 2024 as people who had big gains this year are trying to hold off into year end before selling.

My best idea this week is a $125 company that just had its highest weekly close ever. You know my stance on the highest weekly close, that is something I look for to gauge strength, we’ve seen it in past best ideas like MSFT a couple weeks back or TMUS last week where a close up there is usually just the beginning of a nice continuation. Considering how hot the market has run, I have a plan here to generate a conservative 20%+ return selling a put spread 12 months out and almost 30% lower.