Archives for August 2018
Full Time Profits, August 31st, 2018 – AAPL, LULU
The “macro” landscape behind this market is confusing me.
You would think when emerging markets see enough risk, it would lead to some kind of selling in domestic markets.
Right now, the Turkish Lira is getting clobbered. The South African Rand crashed. The Argentine Peso crashed. We’re starting to see more spillover in other currencies.
The bearish view here is that dollar strength is a direct result of central bank tightening, and it will eventually matter to the markets.
That’s the disconnect I see. Emerging market volatility is continuing to ratchet higher, while SPX vol is near its 6 month lows.
This could be nothing. It could be my own bias of wanting the market to pullback so I can get better entries. I’m not expecting a 1997 EM crisis or anything.
Over the past few days, the market has pulled in a tiny bit, but it really isn’t much. Underneath the surface there has been rotation. AAPL has gone absolutely bananas, and I want to fade that here.
As for the overall market, I think we’re due for a pull in. There’s a gap on the S&P at 2875 that is begging to be filled.
Trade #1: AAPL
This is a parabolic short. The stock has 3 days in a row above its upper bollinger band, and it’s currently 13% above it’s 50 day moving average… that doesn’t happen very often. I like scaling into call spread sales at these prices.
Trade Setup
Expected Price: 227
Sell to Open AAPL Oct 245/250 Call 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
Trade #2: LULU
This is a Post Earnings Announcement Drift setup, where we expect the stock to stay bid for the next few weeks.
Trade Setup
Expected Price: 158.70
Sell to Open LULU Oct 145/140 Put Spread
Tier 1: Enter at 0.70, Exit at 0.20
Tier 2: Enter at 1.00, Exit at 0.50
Tier 3: Enter at 1.30, Exit at 0.80
[CLOSED] – AMZN Scaling Put Calendar
Update: September 14th, 2018
Closing out AMZN Calendars
Full Time Profits, August 28th, 2018 – SQ, WYNN, VMW
Monday saw a breakway gap with upside followthrough on some trade news. Or whatever the narrative is right now.
In fact, we don’t even need news for this market to run. The lack of news can be a catalyst in and of itself.
Markets are a big overbought, but this is starting to feel more “2017-ish” where any kind of correction is tiny… where we go weeks without a 1% drop in the markets.
Personally, I don’t want that to happen. I do better when volatility is up. When I can dip buy actual dips. Right now, we’re not getting that. I’ll be a little patient here, but if the market starts going in “run-away” mode, I’ll start to sell spreads more aggressively.
Trade #1: SQ
Looking for a shallow retracement here.
Trade Setup
Expected Price: 76.63
Sell to Open SQ Oct 70/65 Put Spread
Tier 1: Enter at 0.95, Exit at 0.25
Tier 2: Enter at 1.35, Exit at 0.65
No Tier 3: We are widing out the profit potential on Tier 1 and 2, and will keep some dry powder to roll if needed.
Trade #2: WYNN
Looking for a gap fill to fade.
Trade Setup
Expected Price: 160, If hit within the next 2 weeks
Sell to Open WYNN Oct 175/180 Call Spread
Tier 1: Enter at 0.75, Exit at 0.25
Tier 2: Enter at 1.05, Exit at 0.55
Tier 3: Enter at 1.35, Exit at 0.85
Trade #3: VMW
Anticipating the gap fill and a pull into the 200 day moving average.
Trade Setup
Expected Price: 138
Sell to Open VMW Oct 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
[CLOSED] – SPX Oct Iron Condor
Update: September 19th, 2018
Closing out the trade for a profit.
[CLOSED] – AMD Bear Diagonal Spreads
Update: August 29th, 2018
Closing out the trade for fast profits.