Don here...
We've got a half day of trading, keeping things quiet…or so you would think.
Let me start by saying, the response to my 0DTE webinar was OVERWHELMING.
I knew that trading 0DTE products was popular…but my word.
For those of you who weren't able to attend, you can check out a replay of the event HERE.
Now, while the S&P 500 drifts higher on holiday volume, Blake Young just flagged something that should concern every trader watching the tape.
Consumer sentiment just hit one of the three lowest readings in 20 years.
The University of Michigan number came in at 52%. You have to go back to 2022 and 2011 to find anything lower. Consumer confidence is sliding hard alongside it.
Blake also pointed out a major disconnect in the economic data. Every report outside the Bureau of Labor Statistics is flashing red. Retail sales came in flat at 0%. Yet we're supposed to believe GDP grew at 4.3% while the government was shut down for six weeks and accounts for roughly 20% of spending.
The math does not add up.
Here is what Blake is doing about it. He is hunting for oversold defensive names while the broader market retests its highs on thin volume. He walked through three specific setups:
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Mondelez (MDLZ) dropped from $71 to $54 and stopped moving. Blake outlined a February call spread buying the 57.50 strike and selling the 52.50 for roughly $2.80 on a $5 wide spread.
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NextEra Energy (NEE) is sitting at previous support with an exhaustion gap signaling potential upside. The at-the-money January put sells for exactly 2.5%, which is Blake's sweet spot for income trades on dividend payers.
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Boston Scientific (BSX) is setting up for a breakout above $94.40. Blake detailed a February 90/100 call spread for $5.88 on a $10 spread, putting the cost basis right at current levels.
These are defensive sector plays in utilities, healthcare, and consumer staples. They are positioned to catch a rotation when the broader market finally pulls back from these holiday highs.
π Click here to watch Blake break down each trade setup and the economic data driving his thesis
To your success,
Don Kaufman
Chief Market Strategist, TheoTRADE
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