March 7th, 2023

Mr. Powell Goes To Washington

The S&P 500 (SPY) was lifted last week after bouncing off the 200-day moving average (purple line below). It’s good news that a key level was defended, but we could quickly see ourselves back on that line after this week.

The S&P 500 (SPY) was lifted last week after bouncing off the 200-day moving average (purple line below). It’s good news that a key level was defended, but we could quickly see ourselves back on that line after this week.
Fed Chairman, Jerome Powell will appear before Congress this week as part of the semiannual testimony on monetary policy.

The job market remains strong, but Powell has insisted on doing whatever it takes to fight inflation. That means the markets are torn at the moment. You can see that in the chart above as the SPY is right back at the same level it was at the end of January.

We’re likely to hear that the Fed will continue raising rates, but is unlikely to go back to 50 basis-point increases. All of this means I think we are likely to head into a choppy period in the markets – back to larger intraday swings but flat over a longer period of time as the market hangs on every word of the Fed.

One way that I like to trade flat markets is by using my 4-Day Trade system. This system gets you in the market multiple times per week but closes trades on average in 4 days or less. This keeps your capital less exposed to market movements, and the system actually profits when the market stays flat.

I’ve traded this system since August and by the end of the year in just five months, the system won 95% of trades with a potential profit of $8,230 on a $15,250 portfolio. That is a 53% potential return in five months!

Now, if you’re wondering how you can learn the rules of the strategy and how you can make the same trades multiple times per week, I invite you to go to this link for more information.

I taught this strategy to a group of investors at the latest Investor’s Blueprint Live conference last week. That link unlocks the 4-Day Trade system as well as three days of additional presentations that show you how you can trade in this market environment.

You’ll even see me place a live trade during the conference and show you exactly what I’m looking for while trading. We closed the trade three days later for roughly a 25 – 35% profit.

If that’s just one of the presentations over three days, imagine what else you can learn from this!

Speaking of flat markets, the trade idea today is Avery Dennison (AVY). The first chart is the weekly chart and you can see that the stock hasn’t moved much since the end of January.

Now, let’s zoom in on a daily chart.  After earnings on 2/2/23, this stock hasn’t been able to break out of its trading range. 

That makes it perfect for an Iron Condor trade. An Iron Condor is a fancy title for the combination of a put credit spread with a call credit spread. The two spreads assume the stock won’t move too far in either direction.

Let’s assume the stock will stay between 190 and 175 by April 21st. We can take advantage of the lack of movement by selling two different option spreads.

For example:
Sell to open 21-APR 190 call
Buy to open 21-APR 195 call
Sell to open 21-APR 175 put
Buy to open 21-APR 170 put

In pre-market trading, this is offering a credit of $267 on an investment of $233. That’s a potential for a 114% return in the next 45 days if the stock stays between 175 and 190 at expiration.

If you want to know more about iron condors and other trading tactics you can use in this market, check out this link https://go.tradersreserve.com/ibl-2023-recordings to unlock your access to this trading tactic and more!  

If you have any questions, comments, or anything we can help with, reach us at any time.

Email: [email protected]

Phone: (866) 257-3008

Jeff Wood

Editor, Filthy Rich Dirt Poor
Coach, Options Testing Lab

Any trade or trade idea discussed is for educational purposes only.  They will not be tracked as an official trade recommendation.