Markets are bouncing off oversold conditions, and while we didn’t properly retest the low, it’s a “close enough” for me.
The base case remains the same– the market is attempting to knock out a new, multimonth trading range that we’ll probably stay in for a while.
Right now you should be peeling off existing trades and getting setup for new opportunities. I don’t think it makes sense to short here– too early, but if we get a squeeze in the next week we’ll look to initiate some index call spreads.
Trade #1: LULU
Great breakout, this is a multi-year breakout and I expect this trend to continue. Retail as a whole have seen some leaders pop up, and I want to be involved into pullbacks.
Expected Price: 91
Sell to Open LULU May 82.50/80 Put Spread
Tier 1: Enter at 0.35, Exit at 0.05
Tier 2: Enter at 0.50, Exit at 0.25
Tier 3: Enter at 0.65, Exit at 0.40
Trade #2: NVDA
NVDA is catching some heat because of Citron… they used to move markets but they’ve been early and wrong on this one for a while.
In case we do manage to get a flush I want to be prepared.
Expected Price: 202
Sell to Open NVDA May 170/165 Put Spread
Tier 1: Enter at 0.80, Exit at 0.30
Tier 2: Enter at 1.10, Exit at 0.60
Tier 3: Enter at 1.40, Exit at 0.90