| Are you a new member? | | 1. | Read the Blueprint for Options Success report here | | 2. | Check out our guides to Short Puts and Covered Calls | | 3. | Watch our most recent webinar here | | 4. | Watch our New Member Webinars here and here | Dear Savio, Since the U.S. stock market bottomed out on March 23, traders have been furiously buying stocks, forming a V-shaped reversal on Wall Street. But who has been leading this bullish rebound? Looking at a comparison chart of the ten S&P 500 sectors and the S&P 500 itself, as represented by State Street Global Advisors' Select Sector SPDR funds, it appears every sector has made a significant contribution. Here's the breakdown of the performance of each fund in the sector-comparison chart in Fig. 1: - Energy Select Sector SPDR Fund (XLE): 85.55%
- Materials Select Sector SPDR Fund (XLB): 53.95%
- Consumer Discretionary Select Sector SPDR Fund (XLY): 50.70%
- Industrial Select Sector SPDR Fund (XLI): 50.30%
- Technology Select Sector SPDR Fund (XLK): 46.73%
- Financial Select Sector SPDR Fund (XLF): 45.70%
- Real Estate Select Sector SPDR Fund (XLRE): 45.27%
- SPDR S&P 500 Fund (SPY): 43.72%
- Health Care Select Sector SPDR Fund (XLV): 38.17%
- Utilities Select Sector SPDR Fund (XLU): 37.53%
- Consumer Staples Select Sector SPDR Fund (XLP): 24.94%
Fig. 1 -- Sector Comparison Chart -- Chart Source: TradingView Certainly, the energy sector -- represented by XLE -- has enjoyed the biggest bump since bottoming out, but that's because it fell the farthest during the pullback. Cratering crude oil price wreaked havoc on energy stocks in early 2020. It's hard to give too much credit to a sector that is only seeing a huge bounce percentage-wise because it experienced such a dramatic collapse to begin with. The materials, consumer discretionary and industrial sectors -- represented by XLB, XLY and XLI, respectively -- have each gained more than 50% since hitting their lows. But they fell pretty hard at the beginning of the year too. Plus, the remaining S&P 500 sectors aren't too far behind them. This broad recovery is great news for stock traders, but it doesn't do much to help us identify who's truly leading the bullish rebound. Maybe looking at the major market indexes will help us out. There's no denying stocks across the board have been doing well the past few months, but we are seeing some discrepancies in the performance of the major indexes. Looking at the charts below, you will see the following results: - The Russell 2000 (RUT) is still 14.07% below its previous high (see Fig. 2).
- The Dow Jones Industrial Average (DJI) is still 8.48% below its previous high (see Fig. 3).
- The S&P 500 (SPX) is still 5.92% below its previous high (see Fig. 4).
- The Nasdaq Composite Index (IXIC) is now 1.69% above its previous high (see Fig. 5).
Fig. 2 -- Daily Chart of the Russell 2000 (RUT) -- Chart Source: TradingView 
Fig. 3 -- Daily Chart of the Dow Jones Industrial Average (DJI) -- Chart Source: TradingView 
Fig. 4 -- Daily Chart of the S&P 500 (SPX) -- Chart Source: TradingView 
Fig. 5 -- Daily Chart of the Nasdaq Composite Index (IXIC) -- Chart Source: TradingView So why is the Nasdaq Composite Index, the best performer of the group, climbing above its previous high? And why is the S&P 500 outperforming the Dow Jones Industrial Average? One word: Amazon. Amazon (AMZN) has been a juggernaut this year. The stock is now more than 20% above its previous all-time high of $2,185.95 (see Fig. 6). 
Fig. 6 -- Daily Chart of Amazon (AMZN) -- Chart Source: TradingView AMZN is listed on the Nasdaq, so it is part of the Nasdaq Composite Index. It is also part of the S&P 500. It is not, however, part of the Dow Jones Industrial Average or the Russell 2000. Now, there are certainly other stocks out there that are more than 20% above their pre-pandemic highs, but none of them are as big as AMZN or carry as much market-cap clout. No, if you take everything into account, AMZN is leading the bullish rebound on Wall Street. Why does this matter? The rising tide on Wall Street seems to be lifting all boats, right? That's true. But even during broad market rebounds and bullish uptrends, it's important to find the companies that are driving the move. That way you can focus on them in your portfolio, just in case the tide starts going back out and the fundamentally weak stocks start underperforming again. We believe the companies that are going to continue driving the bullish recovery are those companies that can adjust their business models to a post-pandemic world.
The Bottom Line We're thrilled the stock market is doing as well as it is, but we are continuing to focus on the fundamentally strong stocks in the Strategic Trader portfolio. Now is not the time to lose sight of the strategies and methodologies that made us money during the previous bull market, protected us during the recent bear market and continued to generate income during the rebound. While we're not in any trades on AMZN because the company's share price is too expensive, we are focusing on other companies that are poised to not only recover post-pandemic but also thrive. Strategic Trades Review We have recommended several long-term positions that we are managing through long and short stocks, short puts and covered calls to take advantage of longer-term trends. When it's time to open or close a trade, we'll send you alerts via e-mail. For more info about our Strategic Trader positions, you can read trade alerts and view our portfolios. You can also see more trade-specific details by clicking on the trade links below. The strategic trades listed in the table below summarize our current level of exposure (short puts, long and short stocks, covered calls, etc.) to the stocks we have recommended and our cumulative returns to date. 
The cumulative return of each position includes the profit or loss from any exposure we have had to the stock since the original recommendation. Click here to view a short educational video that explains how and why we're tracking the trades in our Strategic Positions Portfolio this way. We’ll be discussing each of our current trades in next week’s live Strategic Trader webinar. Click here to reserve your spot now. If you're new to options trading -- or if you'd like a quick refresher course on a specific aspect of options trading -- please visit our Education Center right here. We've created a large archive of high-quality instructional videos. And if you haven't checked it out yet, we also have a series of options selling courses in our Course Library.
We're confident they'll help you become a much better options trader, no matter what level you're at now. | Open Positions These are the Strategic Trader positions that are currently open and active (Charts courtesy of TradingView). 
Bank of America (BAC) -- On June 10, we recommended you "sell to open" the BAC July 10th $25 Put Write for $0.60 or better. BAC has pulled back slightly from its recent highs, but we think it will remain above our strike price through expiration. If you have not already established a position in BAC, or are working on scaling into a position, and the option is trading at, or above, our recommended minimum price, we still recommend entering this trade. 
Microsoft (MSFT) -- On June 9, we recommended you "sell to open" the MSFT July 10th $180 Put Write for $2.60 or better. MSFT has exploded higher today, and we will likely be able to take even more profits off the table and roll out this trade soon. If you have not already established a position in MSFT, or are working on scaling into a position, and the option is trading at, or above, our recommended minimum price, we still recommend entering this trade. 
Cisco Systems (CSCO) -- On Aug. 2, we recommended you take possession of CSCO common stock at $56.00 per share when our CSCO August 2nd $56 Put Write expired in the money. On June 5, we recommended you "sell to open" the CSCO June 19th $50 Covered Call for $0.19 or better. CSCO continues to move higher, but we anticipate the stock will be consolidating between support at $46 and resistance at $50 for a while. This should keep the stock well below our strike price until expiration. If you have not already established a position in shares of CSCO, we recommend waiting to buy shares of the stock. If you already own shares and have not already established a covered-call position on CSCO, or are not working on scaling into a position, and the option is trading at, or above, our recommended minimum price, we still recommend entering the covered-call trade. 
Wynn Resorts (WYNN) -- On April 1, we recommended you "short" the WYNN common stock for $55.00 per share or better. On June 3, we recommended you "sell to open" the WYNN June 19th $80 Covered Puts for $1.30 or better. WYNN pulled back a bit this week after rallying last week, but we expect the stock to remain above $90 in the near term. This should give us an opportunity to take profits off the table on our current trade and sell another covered put against our short position. If you have not already established a short position in shares of WYNN, we recommend waiting to short shares of the stock. If you already have a short position in the shares and have not already established a covered-put position on WYNN, or are not working on scaling into a position, and the option is trading at, or above, our recommended minimum price, we still recommend entering the covered-put trade. 
Sturm, Ruger & Company (RGR) -- On June 2, we recommended you "buy to open" the RGR July 17th $65 Long Put for $2.00 or less. RGR is hovering just below its recent highs around $72.50. We are still expecting the stock to drop back down toward its recent lows of $65. If you have not already established a position in RGR, or are working on scaling into a position, and the option is trading at, or below, our recommended maximum price, we still recommend entering this trade. 
Extra Space Storage (EXR) -- On May 15, we recommended you take possession of EXR common stock at $95.00 per share when our EXR May 15th $95 Put Write expired in the money. On May 20, we recommended you "sell to open" the EXR June 19th $95 Covered Call for $0.60 or better. EXR has broken above the down-trending resistance level that has kept it down for most of the year. We anticipate having our shares called away from us next week at expiration, which isn't a negative outcome. Because our shares of EXR will be called away for $95 per share, the same price we paid when taking possession of the shares, we will breakeven on our common stock position. Because we get to keep all of the premium from selling the covered call, we will lock in a tidy profit. If you have not already established a position in shares of EXR, we recommend waiting to buy shares of the stock. If you already own shares and have not already established a covered-call position on EXR, or are not working on scaling into a position, and the option is trading at, or above, our recommended minimum price, we still recommend entering the covered-call trade. 
Nike (NKE) -- On March 13, we recommended you take possession of NKE common stock at $99.00 per share when our NKE March 13th $99 Put Write expired in the money. On May 19, we recommended you "sell to open" the NKE June 19th $97.50 Covered Call for $1.30 or better. NKE is hovering just below its 52-week high. While there is a chance the stock could see some profit-taking, we're anticipating our shares will likely be called away from us when the covered call expires. Though our $97.50 strike price is below the $99 per share we originally paid for our NKE common stock, we have collected enough premium to make this position profitable despite selling our shares for a lower price. If you have not already established a position in shares of NKE, we recommend waiting to buy shares of the stock. If you already own shares and have not already established a covered-call position on NKE, or are not working on scaling into a position, and the option is trading at, or above, our recommended minimum price, we still recommend entering the covered-call trade. 
Coca-Cola Company (KO) -- On March 20, we recommended you take possession of KO common stock at $57.00 per share when our KO March 20th $57 Put Write expired in the money. On May 13, we recommended you "sell to open" the KO June 19th $47 Covered Call for $0.36 or better. KO is still struggling to break above $50, which means there could be a pullback. However, if the market continues to rally, we will likely see these shares called away from us next week. If you have not already established a position in shares of KO, we recommend waiting to buy shares of the stock. If you already own shares and have not already established a covered-call position on KO, or are not working on scaling into a position, and the option is trading at, or above, our recommended minimum price, we still recommend entering the covered-call trade. 
iShares Investment Grade Corp Bond ETF (LQD) -- On May 1, we recommended you "short" the LQD common stock for $128.00 per share or better. LQD has broken above its resistance at $132. We're evaluating the potential of a covered put on this trade similar to the one sold against WYNN. If you have not already established a position in LQD, or are working on scaling into a position, and the option is trading at, or above, our recommended minimum price, we recommend waiting to enter this trade. 
Ball Corporation (BLL) -- On Sept. 20, we recommended you take possession of BLL common stock at $77.50 per share when our BLL September 20th $77.50 Put Write expired in the money. On April 28, we recommended you "sell to open" the BLL June 19th $77.50 Covered Call for $0.60 or better. BLL made a run at our strike price of $77.50 before pulling back. If the stock doesn't break above our strike price before expiration, we plan to sell another call against it. If you have not already established a position in shares of BLL, we recommend waiting to buy shares of the stock. If you already own shares and have not already established a covered-call position on BLL, or are not working on scaling into a position, and the option is trading at, or above, our recommended minimum price, we still recommend entering the covered-call trade. Closed Positions These are the Strategic Trader positions we closed since the last update. Microsoft (MSFT) -- On June 9, we recommended you buy to close the MSFT June 19th $180 Put Write. The position was closed for a return on margin of 7.99%. Bank of America (BAC) -- On June 8, we recommended you buy to close the BAC July 2nd $23 Put Write. The position was closed for a return on margin of 11.02%. Bank of America (BAC) -- On June 4, we recommended you buy to close the BAC June 19th $22 Put Write. The position was closed for a return on margin of 13.37%. Webinar Preview: Join us Tonight at 8 p.m. ET During tonight’s live webinar, we’ll review the weekly newsletter, discuss coming events in more detail and walk through our top trades. We also encourage you to submit your questions live during the session. We want to do everything we can to help you become a successful options trader, which is why you’ll have live access to us for an hour every week. And if you have any questions or comments you would like to send us in advance of the live session -- or anytime during the week -- you can write to us at feedback@investorplace.com. If you can't attend the session live, you can watch the archived version on our website in the "Webinars" section. It'll typically be posted within about two hours of the end of the live session. Sincerely, 
John Jagerson and Wade Hansen
Editors, Strategic Trader | 
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