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Full Time Profits, August 20th, 2021 – NKE, AMZN, SQ
After a little shakeout, the S&P held the previous range lows, just above a rising 50 day moving average and key trendline.
I’m not sure that this was it… there wasn’t enough of a hedging panic to put in a low in the market, but overall, large caps look fine. The Russell 2000 is near the low end of its trading range, and it needs to hold for overall risk appetite to stay bid. For the moment it looks like it will.
Right now, we are going to plan some setups that require just a bit more push to the downside. We’ve already been filled on a handful of other names so we don’t need to go “all in” from just a small pullback.
Let’s be patient and look for the best entries available.
Trade #1: NKE
The stock had a great runa fter earnings, and did see a small gap down. If we can get a second push lower, it will come into a key pivot level, a rising 50 day moving average, and a VWAP from the earnings breakout.
Trade Setup
Expected Price: 159.59
Sell to Open NKE 15Oct21 145/140 Put Spread
Tier 1: Enter at 0.75, Exit at 0.02
Tier 2: Enter at 1.05, Exit at 0.26
Tier 3: Enter at 1.35, Exit at 0.32
Stop Out If Close Under 144.89
Trade #2: AMZN
AMZN has traded like hot garbage since its earnings report, and is getting oversold enough to justify an entry. I want to play against the pivot lows from the last earnings fade as a clean entry.
Trade Setup
Expected Price: 3135
Sell to Open AMZN 17Sep21 3020/3010 Put Spread
Tier 1: Enter at 0.75, Exit at 0.83
Tier 2: Enter at 1.05, Exit at -0.74
Tier 3: Enter at 1.35, Exit at -1.08
Stop Out If Close Under 3019.89
Trade #3: SQ
SQ had a failed breakout above 280, and while it could stabilize here, I want to see another push just under that trendline and pivot support for an entry.
Trade Setup
Expected Price: 247.21
Sell to Open SQ 15Oct21 220/210 Put 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 Under 219.89
Full Time Profits, August 16th, 2021 – DPZ, KLAC, COST
Quite the stick save today. There was a hard probe lower across multiple sectors… I thought we’d see a decent rollover, but buyers showed up aggressively and we finished at the highs of the day.
This is not bearish price action, and it feels like money is being forced back into names. It could go back to how rates faded today, and there’s just too much liquidity in the system right now, with not as many investible assets available.
Today we’re focused on two post-earnings plays, and a stock that I’ve been stalking short for a bit that is ready to go.
Trade #1: DPZ
Domino’s had a great run topped off with a solid earnings report. It’s been a little weak, and odds are we will need to probe a bit lower for new buyers to show up.
Trade Setup
Expected Price: 500
Sell to Open DPZ 17Sep21 480/470 Put Spread
Tier 1: Enter at 1.8, Exit at 0.4
Tier 2: Enter at 2.52, Exit at 1.02
Tier 3: Enter at 3.24, Exit at 1.34
Stop Out If Close Under 479.89
Trade #2: KLAC
After a nice earnings report, KLAC faded hard with the rest of the semiconductor space, and is near the top of the trading range from the past few months. It also has the rising 50 DMA coming into play right around these levels.
Trade Setup
Expected Price: 326.44
Sell to Open KLAC 17Sep21 300/290 Put Spread
Tier 1: Enter at 1.5, Exit at 0.05
Tier 2: Enter at 2.1, Exit at 0.52
Tier 3: Enter at 2.7, Exit at 0.65
Stop Out If Close Under 299.89
Trade #3: COST
It’s time to pull the trigger to the short side on this one. The price action is reaching extremes and odds are high for a rug pull before its earnings event.
Trade Setup
Expected Price: 456
Sell to Open COST 17Sep21 475/480 Call Spread
Tier 1: Enter at 0.75, Exit at 0.02
Tier 2: Enter at 1.05, Exit at 0.26
Tier 3: Enter at 1.35, Exit at 0.32
Stop Out If Close Over 475.11
Market Primer, August 15th, 2021
Full Time Profits, August 12th, 2021 – GS, AAPL, IBB
Markets are grinding higher to new all time highs.
Grinding– not ripping. Volatility has been very quiet over the past week or so, and we haven’t had a good reset in a while.
There’s a tendency for the market, at some point to retest the previous range before it has a good move– I wouldn’t be surprised that we eventually come back and test 4400 just to shake out the weak hands and get everyone hedged.
On the bullish side of things, there’s still the potential for a rollover in bonds. The yield curve has shifted so that’s been helping large banks… yet if we get a decent uptick in rates that will help smallcaps more than large cap tech names.
Today we’re simply planning for any pullbacks in some of our favorite traders.
Trade #1: GS
Very nice run in GS, and it’s starting to get a touch overbought. Look for a test of 400 as the first level, and if it pulls in further you’ve got a previous breakout level, a gap fill, and key rising moving averages to come in and support price
Trade Setup
Expected Price: 400
Sell to Open GS 17Sep21 375/370 Put Spread
Tier 1: Enter at 0.85, Exit at 0.14
Tier 2: Enter at 1.19, Exit at 0.42
Tier 3: Enter at 1.53, Exit at 0.55
Stop Out If Close Under 374.89
Trade #2: AAPL
Odds are AAPL breaks out here, but I’d like to play the failed breakout and test of the lower end of support.
Trade Setup
Expected Price: 141.63
Sell to Open AAPL 17Sep21 135/130 Put Spread
Tier 1: Enter at 0.73, Exit at 0
Tier 2: Enter at 1.022, Exit at 0.22
Tier 3: Enter at 1.314, Exit at 0.27
Stop Out If Close Under 134.89
Trade #3: IBB
IBB is getting smoked due to higher exposure in MRNA. I want a vol pivot lower low and a test of the rising trendline and 50 day moving average.
Trade Setup
Expected Price: 163.39
Sell to Open IBB 17Sep21 156/153 Put Spread
Tier 1: Enter at 0.59, Exit at 0.18
Tier 2: Enter at 0.826, Exit at 0.38
Tier 3: Enter at 1.062, Exit at 0.51
Stop Out If Close Under 155.89
Full Time Profits, August 10th, 2021 – AMD, MSFT, FB
The S&P is very, very quiet over the past three days. We did see a new marginal high, but we really aren’t seeing much of a push higher right here.
I think this could be a function of index composition. We’re on the backend of earnings seasons, and many tech names had the good news priced in.
On top of that, we FINALLY saw a break in treasuries, leading to higher rates. The current relationship (and it’s not permanent) is that when rates go up, it means tech sells off and we see runs in banks, commodities, and smallcaps.
I think that mechanic can persist, and it should give us some nice opportunities in large cap tech names IF we can manage a decent pullback.
Trade #1: AMD
This was a nice parabolic runner, and has seen some of the excesses wear off. The trend in AMD is still quite nice, and I think this does continue higher, but I’d like to see one undercut of today’s lows for a fresh entry.
Trade Setup
Expected Price: 103.27
Sell to Open AMD 17Sep21 92.5/90 Put Spread
Tier 1: Enter at 0.51, Exit at 0.17
Tier 2: Enter at 0.714, Exit at 0.35
Tier 3: Enter at 0.918, Exit at 0.46
Stop Out If Close Under 92.39
Trade #2: MSFT
This is a bit ambitious, but I think that softie has a chance to see a decent retracement. Earnings are out of the way and the stock didn’t really move that much, along with a failed move higher during Monday’s trade.
There’s the rising 50 day moving average and key support at 275. I don’t want to use that as my exact entry point, but just a little higher than that to start scaling in.
Trade Setup
Expected Price: 279.63
Sell to Open MSFT 17Sep21 265/260 Put Spread
Tier 1: Enter at 0.66, Exit at 0.08
Tier 2: Enter at 0.924, Exit at 0.1
Tier 3: Enter at 1.188, Exit at 0.11
Stop Out If Close Under 264.89
Trade #3: FB
Not sure we’ll get it, but I’ve got a measured moev that takes us down to the most recent pivot level. If we get there, I’ll be scaling in aggressively.
Trade Setup
Expected Price: 339.89
Sell to Open FB 17Sep21 325/320 Put Spread
Tier 1: Enter at 1, Exit at 0.32
Tier 2: Enter at 1.4, Exit at 0.68
Tier 3: Enter at 1.8, Exit at 0.9
Stop Out If Close Under 324.89