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My indicators are giving pretty solid bullish readings this week, an upgrade from neutral-to-bearish readings last week, and from a technical perspective, the markets seem as though they are going to continue moving higher. I will probably be leaning more towards neutral over the next month or so, as I’m expecting another trading range to develop, but at this point, I am bullish on stocks.
One thing that suggests that we’re not going to see a dramatic drop in stocks is that the S&P 500 Volatility Index (INDEXCBOE:VIX) is once again trading around the 12 level.
Meanwhile, the U.S. dollar has been very strong. The U.S. is still the strongest and most stable country in the world. Just as we saw international investors rush to the safety of U.S. Treasuries when the situation in Italy looked like it was starting to worsen, they are also seeking safety and protection by buying up U.S. dollars.
With the major indices breaking higher out of their consolidation ranges, I believe the path of least resistance for the market is to the upside right now, and I want to take advantage of that with a bullish play:
Buy to open the Twenty-First Century Fox Inc Class B (NASDAQ:FOX) Oct 42 Calls (FOX181019C00042000) at $1.45 or lower.
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InvestorPlace advisor Ken Trester brings you Power Options Weekly, which delivers 5 new options trades and his latest trading advice to you each Friday. Trester has been trading options since the first exchanges opened in 1973 with a winning streak that goes back to 1984 with money-doubling average annual profits since 1990.