Markets are a little soft on the back of the Turkish Lira crashing.
I swear to you, it was only two days ago when I showed my wife the chart of USDTRY and said “we should go back to Turkey.”
And then we had a 10% move today. Yeah, I’m looking at tickets now.
Whenever you see this kind of move in an emerging market currency, or anything that’s outside of what we “normally” view as a market risk, we always think about contaigion.
Will it spill over and find a way to make AMZN actually sell off?
Remember, the 1997 crash was all about Malaysian debt that just spilled over into a ton of other places.
I don’t think there’s enough evidence for that yet. Markets are still pretty firm and there’s plenty of dip buyers.
My guess… and this is what I think would frustrate the most market participatnts…
Indexes trade in a stupid tight range into Labor Day. Earnings are out of the way, it’s August, and while we will hope for some churn to get into some plays, it’s just going to get quiet.
Heck even POTUS is on vacation. Hard to get new trade war headlines out there.
Right now, we’ll look at a deep oversold play in BIDU and two other pullback trades.
Trade #1: BIDU
I almost sent this out a week ago, but then I thought “Nah, there’s no way BIDU will actually trade into the April lows.”
Yet here we are. The hard selloff post earnings into the multi-year range lows. Premium is still elevated, and I like it at this price level.
Expected Price: 219.46
Sell to Open BIDU Sep 200/195 Put Spread
Tier 1: Enter at 0.77, Exit at 0.27
Tier 2: Enter at 1.07, Exit at 0.57
Tier 3: Enter at 1.37, Exit at 0.87
Trade #2: UNP
Looking for a pullback into the 20 day moving average.
Expected Price: 146
Sell to Open UNP Sep 140/135 Put Spread
Tier 1: Enter at 0.74, Exit at 0.24
Tier 2: Enter at 1.04, Exit at 0.54
Tier 3: Enter at 1.34, Exit at 0.84
Trade #3: NKE
Looking for a pullback to breakout pattern.
Expected Price: 78.55
Sell to Open NKE Sep 75/72.50 Put Spread
Tier 1: Enter at 0.40, Exit at 0.15
Tier 2: Enter at 0.55, Exit at 0.30
Tier 3: Enter at 0.70, Exit at 0.45