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We got a positive sign for stocks in the short term when the S&P 500 on Wednesday finished trading above its 20-day moving average of 3,100, closing at 3,115.
As Chris Johnson said during his Markets Live segment this morning at 8:45 a.m. EDT, he sees that as a bullish signal for the short term – but he's unsure that support will be able to hold.
Investors could become defensive if we don't get up to 3,150 and close above there for a couple days in a row.
To see when we might dip, Chris said to keep an eye on the VIX. Right now, the VIX below 30 is a positive indicator that investors are optimistic about stocks. But there are two key levels to watch: the VIX at 30, and then 35. A break above both would be an indicator stocks could be ready for another correction.
Chris will update Markets Live viewers Monday at 8:45 a.m. on his next real-time broadcast. Make sure to tune in.
And until then, Chris did give viewers this trade recommendation…
Here's Chris' Best Trade Idea for the Next Week
Last night, news broke out that Saudi Arabia threatened to ignite an oil-price war unless fellow OPEC members make up for their failure to abide by the cartel's recent production cuts.
Oil was up 2% in early markets trading, and Chris thinks that momentum should continue into next week.
His favorite way to play the move to the upside for big profits is with call options on the United States Oil Fund LP (NYSEArca: USO).
Right now, you can buy the USO July 10, 2020 $30 calls for $0.20. If USO gets to $30.10 by July 8, you would profit 90%.
Markets Live Next Week
Be sure to catch Chris again next Monday at 8:45 a.m. EDT, right here. He'll update you on the S&P 500's technicals, the VIX, and the oil trade.
And tune in at 11:45 a.m. for live market analysis from Tom Gentile.
If you missed Chris's live stream today, here's the full replay: