The last week has given us quite a bit of volatility in the markets. Thursday’s ECB announcement kept the volatility trend alive for another day. U.S. equity markets also received a bit of a boost from another round of positive labor numbers, with Jobless Claims down 10,000 from the prior week.

The U.S. economy continues to improve little by little. At the same time, the Eurozone is facing a bit of a currency crisis. The combination has helped the U.S. Dollar Index rally to its highest level in seven years. As the Euro declines, and the U.S. Dollar rises, the U.S. markets are becoming attractive for investors around the world.

The S&P 500 made another move above 2000 again this week. I think we are going to see some post-election exuberance combined with optimism as we head into the holiday season. That combination could continue to push the index higher. I am also aware that as we approach year end, investors, traders, and money managers will start to think about taking profits.

I like playing an option strangle, hoping to take advantage of a market move in either direction. I am looking to buy the November E-Mini S&P 500 1970-2060 strangle at 10 points ($500.00) or better. We are long the 1970 put and the 206 call at the same time so risk is defined to the cost of entry plus fees and commissions. The options will expire on November 21st, if the value of the strangle gets to 20 points I would try and get out. I would also consider exiting either leg if the opportunity for a 10 point gain presents itself.

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RISK DISCLOSURE: THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES AND OPTIONS TRADING.  THIS REPORT IS A SOLICITATION FOR ENTERING A DERIVATIVES TRANSACTION AND ALL TRANSACTIONS INCLUDE A SUBSTANTIAL RISK OF LOSS. THE USE OF A STOP-LOSS ORDER MAY NOT NECESSARILY LIMIT YOUR LOSS TO THE INTENDED AMOUNT.  WHILE CURRENT EVENTS, MARKET ANNOUNCEMENTS AND SEASONAL FACTORS ARE TYPICALLY BUILT INTO FUTURES PRICES, A MOVEMENT IN THE CASH MARKET WOULD NOT NECESSARILY MOVE IN TANDEM WITH THE RELATED FUTURES AND OPTIONS CONTRACTS.