For the past month the Russell 2000 has been crushing the S&P 500. The Russell for March is up 2.08% and the S&P 500 is down -2.58%. More to point, the Russell is now oversold on the QPI Oversold Indicator at 29.75.
So I recommended in my options service the following trade:
We are going to play the Russell 2000 via $IWM. We will buy calls on the iShares Russell 2000 ($IWM) using the April $153 Call that is trading at $3.30. $IWM is at $153.22.
IWM042018C000015300
There is no limit to this trade and the breakeven is $156.30 due for expiration April 20th.
Logic
We have it hit oversold a 29.75. More on this over the weekend. Good luck.
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The risk indexes outpacing the stodgy ones is one reason for not getting too twisted about all the downdrafts of the last few months. Things are correcting but there is no real de-risking going on. I’ve got a SPY position, but at the same time, not pushing too hard. At some point there will be a ripping rally, but don’t want to leveraged until the profits are going my way.
I’m long TNA 70 calls for next week