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Our indicators are giving bearish readings this week, a downgrade from neutral readings last week. There has been a lot of political news this week; President Trump was elected to “drain the swamp,” but it now seems that the swamp is trying to drain him instead.
Now, the reason that this is important for us as traders is that it is starting to have a huge effect on the market, as we saw this week when the Dow dropped nearly 400 points. The new controversies, whether they turn out to be of merit or not, make the odds that Trump’s administration will be able to move forward with its tax reform and health care bills much weaker.
Even aside from the political situation, we are still in the historically bearish month of May. I am personally maintaining a neutral stance at this point, and I wouldn’t be surprised to see some of this volatility continue further into the summer. For that reason, I am recommending a bearish trade today, involving United Parcel Service, Inc. (NYSE:UPS).
Buy to open the UPS Jul 100 Puts (UPS170721P00100000) at $1.45 or lower.
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