Nasty liquidation day on Friday. If I recall correctly, the selloff was accelerated when it turns out that AAPL cannot, in fact, have their cake and eat it to with the app store. This led to a 0.8% selloff into the close.
Look, it’s been a while since we had a scare. A statistically normal pullback in the S&P would be around 5% — that’s 4318 on the S&P.
Remember– statistically normal– and into that everyone would ABSOLUTELY LOSE THEIR MINDS. But that’s how markets operate.
We’ve also seen this mechanic whereby the selloff centers around monthly options expiration. It’s been the case for the past 4 months, but I think that it’s a little too obvious and we might overshoot a bit more.
I mentioned this last week– don’t force your dip buys with credit spreads, odds are you’ll get much better prices in the next few weeks.
Trade #1: TSLA
We might get a little shakeout before the earnings event mid October. I’m looking for a pullback to the previous resistance level, as well as the rising trendline on the stock.
Expected Price: 692
Sell to Open TSLA 15Oct21 610/605 Put Spread
Tier 1: Enter at 0.8, Exit at 0.08
Tier 2: Enter at 1.12, Exit at 0.34
Tier 3: Enter at 1.44, Exit at 0.44
Stop Out If Close Under 609.89
Trade #2: GS
GS still has this open gap fill, and we’ve got high odds that the most recent pivot support won’t hold as weak hands get stopped out. Into those stops, we want to be buyers.
Note the expiration– it’s a weekly option so we don’t have to include earnings risk in the duration of the option.
Expected Price: 384.3
Sell to Open GS 8Oct21 365/360 Put Spread
Tier 1: Enter at 0.94, Exit at 0.24
Tier 2: Enter at 1.316, Exit at 0.57
Tier 3: Enter at 1.692, Exit at 0.76
Stop Out If Close Under 364.89
Trade #3: DASH
Great mover this week, we’ll be looking for a retest of the breakout level in the mid 190s.
Expected Price: 194.08
Sell to Open DASH 15Oct21 180/175 Put Spread
Tier 1: Enter at 1.2, Exit at 0.55
Tier 2: Enter at 1.68, Exit at 1.01
Tier 3: Enter at 2.16, Exit at 1.36
Stop Out If Close Under 179.89