I think the S&P 500 is going up, so I’m going long: Trader

The S&P 500 has gained more than 2 percent in the past week despite the potential for a Fed rate hike as soon as June, and technical analyst Todd Gordon believes that it will soon go even higher.

The stock market is holding up "extremely well," said Gordon of TradingAnalysis.com.

In order to find levels to make a trade, Gordon uses a weekly graph of the SPY, an ETF that tracks the S&P 500. On the same graph, Gordon points out that $215 is a key level for the SPY because that's where it hits resistance.


From there, Gordon believes that the SPY could hit $215 provided that the ETF does break through the $210 level. These would bring the SPY back to its old highs from mid-2015.


Gordon's trade has him creating a bullish call spread by buying the July 210-strike calls for $3.06 per share and selling the July 215-strike calls for an 85-cent credit. This leaves him to pay around $2.21 per contract.

If the SPY does rise to the predicted $215 level, Gordon stands to make around $2.78 from his trade, or $278 per contract. If the SPY closes at $210, then Gordon stands to lose the $2.21 laid out, with a breakeven point at $212.21.


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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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