Markets continue to march higher on the back of tech earnings.
And that’s about it– we don’t want to overthink this too much. Unless the Nasdaq 100 breaks support or the S&P loses 3200, then we must assume the trend will continue. Market vol continues to decrease, which makes a VIX of 25 VERY expensive. When so many are overhedged with expensive protection, it becomes very difficult for the market to rollover.
Trade #1: CMI
Looking for a pull into key pivot support and a rising 20 day moving average.
Expected Price: 188.09
Sell to Open CMI 18Sep20 170/165 Put Spread
Tier 1: Enter at 0.65, Exit at 0.04
Tier 2: Enter at 0.91, Exit at 0.09
Tier 3: Enter at 1.17, Exit at 0.13
Stop Out If Close Under 169.89
Trade #2: FB
FB gapped up to new highs, but isn’t seeing much followthrough. If tech gets week, I want to play it on the half gap fill and start scaling in.
Expected Price: 245.16
Sell to Open FB 21Aug20 230/227.5 Put Spread
Tier 1: Enter at 0.42, Exit at 0.06
Tier 2: Enter at 0.588, Exit at 0.198
Tier 3: Enter at 0.756, Exit at 0.266
Stop Out If Close Under 229.89
Trade #3: QQQ
Just in case large cap tech decides to jam higher this week, I want to play short into the first weekly pivot resistance.
Expected Price: 273.98
Sell to Open QQQ 21Aug20 283/286 Call Spread
Tier 1: Enter at 0.7, Exit at 0.3
Tier 2: Enter at 0.98, Exit at 0.57
Tier 3: Enter at 1.26, Exit at 0.77
Stop Out If Close Over 283.11