4 Trade Ideas for CME Group: Bonus Idea

Here is your Bonus Idea with links to the full Top Ten:

CME Group, $CME, comes into the week approaching resistance after a move up from the 200 day SMA. It has a RSI rising into the bullish zone with the MACD positive and rising as the Bollinger Bands® open higher. There is resistance at 273 and 276 then 280 and 282.50 before 287.25 and 290.50. Support lower is at 269.50 and 266. Short interest is low at 1.1%. The stock pays a dividend with an annual yield of 1.84% and has traded ex-dividend since September 9th.

The company is expected to report earnings next on October 22nd. The October option chain shows big open interest from the 270 to 250 strikes on the put side and biggest at 270 then 280 on the call side. In the November chain open interest is biggest at the 250 put and spread from 270 to 310 on the call side, biggest at 270 and 280. Finally in the December chain the open interest builds from 290 to a peak at 260 then tails to 230 on the put side. The call side sees open interest spread from 280 to 330, biggest at 330 then 290 and 300.

CME Group, Ticker: $CME

Trade Idea 1: Buy the stock on a move over 273 with a stop at 265.

Trade Idea 2: Buy the stock on a move over 273 and add a November 260/250 Put Spread ($3.25) while selling the December 300 Call ($1.90).

Trade Idea 3: Buy the October/November 280 Call Calendar ($6.00) while selling the November 250 Put ($2.05).

Trade Idea 4: Buy the December 260/280/300 Call Spread Risk Reversal ($3.50).

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After reviewing over 1,000 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which in the first full week without economic data, saw it start well for equity markets as they continued to move higher, piling up more new record highs. But that ended Friday.

Elsewhere, look for Gold to continue the uptrend to new highs while Crude Oil moves lower in a short term downtrend in consolidation. The US Dollar Index continues to drift upwards in consolidation, while US Treasuries hold higher in their consolidation, continuing to tease of a reversal higher. The Shanghai Composite looks to continue the short term consolidation in the uptrend to new 10 year highs while Emerging Markets also continue their uptrend to new 4 year highs.

The Volatility Index looks to continue to drift higher from low levels, pumping the brakes on the equity markets move to the upside. The charts of the SPY, the IWM and the QQQ remain strong on the longer timeframe, albeit with a possible reversal candle this week. On the shorter timeframe despite the SPY and the QQQ adding 2 more new all-time highs and the IWM with one, they all ended the week with strong moves to the downside suggesting more downside to come. Use this information as you prepare for the coming week and trad’em well.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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