Proactive Spreads, June 3rd, 2021

The S&P continues to flirt with all time highs, and overall structure still looks as though we will break above it sooner than later.

4130 still the level I’m watching, the longer we hold above it, the higher the odds of a breakout.

We did see some weakness in tech today. TSLA is getting hit on a Chinese delivery report, and the Nasdaq 100 (finally) saw a move outside of its trading range.

I would be OK with some more selling. In fact, I would enjoy it… it’s just that, as it stands, this feels like a summer shakeout before we start heating up into earnings season.

There’s some other macro data with the Fed that could become an issue. They’re going to start unwinding some corporate bond purchases, and if the market wants to throw a tantrum that’s her perogative.

It’s taken me about an hour to write a few lines as I jump back and forth between this and AMC prices, so we’ll just leave the analysis here for now.

Trade #1: NVDA

NVDA is running hot on the back of good earnings numbers, a stock split, and nice relative strength in the sector. It’s almost to a point where I want to fade it. I’m OK with missing the absolute top, because I’ve been an early short on NVDA before and it’s not fun. We are looking for one more push to the upside to start a position.

Trade Setup

Expected Price: 715

Sell to Open NVDA 25Jun21 750/760 Call Spread

Tier 1: Enter at 2, Exit at 0.64

Tier 2: Enter at 2.8, Exit at 1.36

Tier 3: Enter at 3.6, Exit at 1.8

Stop Out If Close Over 750.11

Trade #2: SPG

Very clean breakout here. I want to see a test of the previous breakout level for a continuation trade.

Trade Setup

Expected Price: 126.66

Sell to Open SPG 16Jul21 120/115 Put Spread

Tier 1: Enter at 0.95, Exit at 0.26

Tier 2: Enter at 1.33, Exit at 0.59

Tier 3: Enter at 1.71, Exit at 0.78

Stop Out If Close Under 119.89

Trade #3: UPS

After a strong move after earnings, the stock has consolidated above 210. This has the look of a rug pull… clear out the stops sub 210 and then reverse higher after deeper pockets come in. That’s what we are playing for here.

Trade Setup

Expected Price: 208.5

Sell to Open UPS 16Jul21 195/190 Put Spread

Tier 1: Enter at 0.78, Exit at 0.06

Tier 2: Enter at 1.092, Exit at 0.3

Tier 3: Enter at 1.404, Exit at 0.39

Stop Out If Close Under 194.89

U.S. GOVERNMENT REQUIRED DISCLAIMER – COMMODITY FUTURES TRADING COMMISSION. FUTURES AND OPTIONS TRADING HAS LARGE POTENTIAL REWARDS, BUT ALSO LARGE POTENTIAL RISK. YOU MUST BE AWARE OF THE RISKS AND BE WILLING TO ACCEPT THEM IN ORDER TO INVEST IN THE FUTURES AND OPTIONS MARKETS. DON’T TRADE WITH MONEY YOU CAN’T AFFORD TO LOSE. THIS WEBSITE IS NEITHER A SOLICITATION NOR AN OFFER TO BUY/SELL FUTURES OR OPTIONS. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE DISCUSSED ON THIS WEBSITE. THE PAST PERFORMANCE OF ANY TRADING SYSTEM OR METHODOLOGY IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY, SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN

Proactive Spreads, June 3rd, 2021 – NVDA, SPG, UPS

Disclaimer