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Proactive Spreads, August 20th, 2018 – AAPL, NVDA

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It’s like clockwork.

Just a tiny bit of macro news… this time it was the Turkish Lira. The market pulls in a bit, and there’s some rotation underneath the surface, and just like tht we hit a new pivot high.

Since the VIX flash crash earlier this year, the S&P 500 has continued to make higher highs, even if it has been super choppy. Which is fine. I didn’t like trading 2017 because we never got pullback opportunities so this kind of tape is much more congruent with my pullback trading style.

Where we sit right now… there’s no direct edge in the indexes. It’s still summer trading, so a lot of the price movement can be chalked up to statistical noise. Odds are we go higher.

I do think large cap tech is due for a pullback, and that’s where we will focus today.

Trade #1: AAPL

That’s right, AAPL can actually selloff.

I’m looking for a pb2bo (pullback to breakout) on the previous trading range put in 2 weeks ago.

Trade Setup

Expected Price: 210.33

Sell to Open AAPL Sep 202.50/197.50 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

Trade #2: NVDA

My outlook on NVDA isn’t too rosy. I think that the semiconductor space is tired and due for a deeper pullback. The support level from June coincides with the rising 200 day moving average, and I think it will break and a lot of investors will stop out.

Instead, look for the deeper pullback, to where the breakout began a few months ago.

Trade Setup

Expected Price: 226.44

Sell to Open NVDA Sep 210/205 Put 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

Disclaimer

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