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Full Time Profits, July 27th, 2018 – FB, V, CRM

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Instead of looking at the S&P 500, we’ll focus on tech. Specifically, the Nasdaq.

Let’s talk about the price action over the past few days.

First, on Wednesday, there was a huge ramp higher into the news that some of the Tariff voodoo is going away with a deal in Europe.

Then… Facebook happened.

Down 20% on earnings, over 150 billion in market value erased.

I’ve tried, really tried, over the past 2 days, to try and think about another similar instance. Where you have one of the largest companies in the market take such a large hit on earnings.

I can’t think of one from the past decade.

Now when the number came out, all I thought was “Man, tech is gonna get smoked tomorrow.”

And then the Nasdaq finished unchanged on the day.

When you have a “black swan” event in one of the biggest stocks in the market, you’d think that there would be some fears of contaigon. It wasn’t lining up.

Now I’m writing this on Friday at lunch, specifically because the discontinuity is going iaway. The QQQ’s are down 1.5% on some decent volume.

I don’t know if the facebook earnings is a one-off event, but it should introduce extra volatility and fear into the market. That’s what I’m looking for… another dip to play.

Trade #1: FB

I’ll say this right now… early dip buyers are going to get smoked in FB. The day’s lows are not the actual lows, it’s actually down at 165. If the stock heads toward that then I’ll start fading the stock.

Trade Setup

Expected Price: 167

Sell to Open FB Sep 150/145 Put Spread

Tier 1: Enter at 0.65, Exit at 0.15

Tier 2: Enter at 0.95, Exit at 0.45

Tier 3: Enter at 1.25, Exit at 0.75

Trade #2: V

Earnings are already out, and the stock is getting hit hard. I’m looking for a retest of previous resistance, which is now potential support.

Trade Setup

Expected Price: 136.30

Sell to Open V Sep 130/125 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

Trade #3: CRM

I want a pullback to the 50 day moving average (not shown on the chart).

Trade Setup

Expected Price: 138

Sell to Open CRM Sep 125/120 Put Spread

Tier 1: Enter at 0.60, Exit at 0.10

Tier 2: Enter at 0.90, Exit at 0.40

Tier 3: Enter at 1.20, Exit at 0.70

Disclaimer

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