RBB Pattern

With the news that oil supplies are the price of oil has started moving lower.  One very big beneficiary of declining oil price is the airlines. UAL looks to have completed a bottom pattern and breaking above resistance. 

The light volume pullback has now set up one of my favorite trading patterns, the RBB Pattern.  (Rounded Bottom Breakout)  We may be a little early with this idea but the pattern is now providing a very low risk entry.  To take advantage of this idea consider the JAN 57.5 Calls for a quick directional trade.  A move up to just $65 could produce more than a 45% return.  A close below support would be a reason to stop out of the position. 

Recently Closed Trades

CSCO 17% • BAC 31% • CREE 48% • WMT 245% • NFLX -40% • STX 42% • 2^nd CSCO Trade 30%

Today’s Market Prep Note

With the last 3-days of selling, traders are starting to wonder, Where is Santa?  Gloom and doomers have been predicting the demise of the 2017 bull run all year.  Now having strung together the first 3-day selling streak since August they are out in force predicting the market top has happened.  Could they be right?  Of course, even a broken watch is right twice a day.  Before diving headlong into a pit of despair take a minute to examine the charts.  The DIA and the SPY are still trending up!  The QQQ’s are suggesting caution, and the IWM is holding a significant support.  Also, take notice that there has been no panic selling and the VIX is not registering fear.  Historically the so-called Santa Rally appears 7 to 10 days after the beginning of December.  Stay focused on price it will provide us the answers.

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Doug Campbell is not a licensed financial adviser, nor does he offer trade recommendations or advice to anyone except for the trading desk of Right Way Options Inc.