Note: Summary notes of the meeting are below the video in this article.

Stephen Cox noted that the S&P has created a new high, taking out the previous triple top, which is considered a very bullish sign. Despite staying out of the market previously due to geopolitical uncertainty, the current focus is on positive earnings, and Stephen Cox maintains their prediction that the S&P will be up by at least 10% by the end of the year. A recession in the US is the only factor that would change this positive forecast, although inflationary impacts from the situation in Iran might lead to a slowdown later in the year.

Stephen Cox reviewed the S&P's long-term bullish trend, which remains intact but is currently at the higher end of its parallel channel. Historically, being at the higher end of the channel often leads to a retracement back to the middle ground or a full retracement to the lower end. Stephen Cox believes the market could potentially reach around 7,100 on the S&P, which is the upper resistance area.

Stephen Cox anticipates a short-term pullback in the S&P following the recent gains. The proposed strategy is a low-probability bare put spread, which has only a 20% chance of winning, but offers a significant risk-to-reward ratio of 9-to-1. They emphasized that they are waiting for an "indecision candle" or other exhaustion signal in the rally before entering this trade, as entering now is viewed as nearly impossible.

The bear put spread involves buying the 6,800 put and selling the 6,700 put, costing less than $60 for a potential gain of about $540. Stephen Cox stressed that traders must be prepared to lose the entire amount risked, comparing it to a gamble. If the market continues up, the long put component of the trade would be closed early to mitigate losses, leaving the short put which could then be rolled out and down to May to nearly 6,100, effectively eliminating potential loss.

Michael Carroll questioned whether lowering the strike price to 6,500 would completely take the cost out of the bare put spread. Stephen Cox explained that while this is possible, it would significantly reduce the probability of winning and necessitate a large, fast move for the trade to be profitable. Michael Carroll then suggested applying a ratio put strategy by adding a second short put at 6,500 to reduce the trade cost further, which Stephen Cox acknowledged as a good idea, cautioning only to check the margin requirements.

Stephen Cox stated that the long-term strategy remains the short put strategy, but they are waiting for a pullback to the 6,900-6,800 range to initiate the May trade. Currently, a trader could write the 6,600 strikes for May, allowing for a 7% drop, but Stephen Cox advised waiting for better premiums. Although they are behind their 2.5% monthly target because no April trade has been placed, they believe one trade could make up the difference, and disciplined trading means staying out of the market when the direction is unclear.

Nanik Hotwani noted that the market rally appears counterintuitive given high inflation and oil prices, suggesting that the markets may be discounting political rhetoric. Stephen Cox agreed that inflationary pressure is a concern, noting that the cost of fertilizer has increased by 50% worldwide, which will impact food costs. Other potential derailers to the bullish 8,000 S&P thesis include high oil prices, which are currently manageable but could become critical if they reach $150, and recent weak spots in the revised jobs data.

Stephen Cox addressed the recent sell-off in technology stocks, asserting that a return of bidding interest in these stocks will drive the S&P higher due to technology's superior market weighting. They further illustrated the impact of AI on jobs and businesses, noting that AI is replacing customer service positions and could pose significant trouble for companies like Salesforce, whose customer relationship management systems may be easily replicated by AI.

Stephen Cox reviewed Oracle, suggesting that new buyers should wait for the stock to break resistance and retest it as new support before buying. They expressed a long-term preference for Alaska Airlines, believing it will return to $56 when oil prices stabilize, despite potential short-term volatility. Regarding commodities, Stephen Cox advised holding gold as a hedge against inflation and geopolitical risk, but suggested silver should be traded, not owned, predicting it might trade sideways after its current rally.

Nanik Hotwani shared they had opened a position in UNG at $10.42, seeing it as a good long-term hold given the need for natural gas to power data centres and electricity production. Stephen Cox agreed it was not a bad trade given the low prices and future demand, though they would have preferred to see the downtrend reversed. Stephen Cox advised against averaging in at the current level, but noted that if the price breaks down, Nanik Hotwani's plan to dollar-cost average lower is a sound strategy.

Stephen Gavin asked for a walkthrough on placing the bear put spread trade on the IBKR platform. Stephen Cox explained that they prefer using the MES instrument because it trades 24/5, allowing for quick closing to secure overnight profits without waiting for the market to open. They demonstrated setting up the trade by buying the 6,800 put and selling the 6,700 put simultaneously for the April 30th expiry on the June futures contract, noting that the trade involves physical assignment.

If you require assistance with trade setup, risk management, or strategy review, please schedule a strategy call or face to face strategy session.

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