Trading the Santa Rally

How I'm trading the Santa Rally.

The Santa rally will happen next week through Jan 3rd-ish, if it happens. It doesn't always happen, but all the market indicators are there that it will.

SPY crossed 4600 last week, which is highly bullish. This week will be volatile with inflation numbers and Powell making comments. It's the perfect week to buy little dips, if you ask me...

So here's how I am setting myself up for success.

#1 - LEAPS. 

I'm buying LEAPS on down days and selling them on $2-3 dollar moves. I'm buying Delta .65 and capturing .65 cents on the dollar with each LEAP.

#2 - Covered Calls - Buying Low + Selling High

I'm buying shares on down days, waiting for the stock to rise a couple of days later. The I sell a  covered call from the higher stock price. Choosing the Dec 29th expiration date. If the stock price drops from the high, I have the opportunity to roll the call in closer to the purchase price so I get even more premium. $$$$

#3 Buying odd lots of shares and selling the shares on 2-3 moves up.

#4 - Setting up bullish credit spreads. If you're a part of the program, check out Module 3 to review how to set these up! If my stock takes off, the upper leg of that spread could pay out huge!

#5 - I may even do a put here and there. You know I rarely sell puts, but this is a prime opportunity.  I'll make sure they expire on Dec 29th!