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Our indicators are now giving neutral readings, a slight downgrade from last week’s bullish readings. With the market pausing to refresh following Wednesday’s Federal Open ÃÛÌÒ´«Ã½ Committee (FOMC) meeting, the rally should continue until at least mid-January — but there will certainly be some ups and downs along the way.
The market sank following the Fed’s rate-hike announcement, but my view is that Wednesday’s session was just the market taking a breather before its next leg higher. However, I am becoming more cautious at this point because sentiment indicators are at extremes, and the number of newsletter advisors that are bullish is now at about 60%, which is awfully high.
With that in mind, today I’m recommending a bearish trade with a longer-term expiration.
Buy to open the Hanesbrands Inc. (NYSE:HBI) Apr (2017) 21 Puts (HBI170421P00021000) at $1.20 or lower.
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