$AAPL Ran The Market Today
Let’s Dig Deeper
Unusual Options Activity[Read more…]
I told you there was a podcast coming!
Well, this isn’t quite a podcast, to be honest. It was supposed to be a quick market recap. But then some of my listeners started asking some question.
So the general outline is…
- Market Recap
- Outlook for Tomorrow
- Why You Shouldn’t trade options alone…but if you want to the rules involved.
- Tips on trading this $FB tip
- Advice for beginning traders.
- Some other random stuff.
I don’t do this too often, but here are some of my favorite swing trade potential set-ups based on and price and money flow today.
Swing Trade Ideas – June 28th, 2018
Bullish Swing Potential
Bearish Swing Potential
Unusual Options Recap From Today
Some stocks to keep an eye on as well here. $BABA looks ripe for a pop soon.
In markets with this sort of volatility, don’t pick a side heavily. By that I mean don’t put a large chunk of change in a directional trade…don’t trade like it’s the apocalypse throwing tons of money into puts and other ‘hedges’ unless you’re not holding many of those as overnights.
I like to balance my bullish options tendencies with equity holdings in $DOG $SQQQ $TVIX $SDS & $YANG – but I stay dynamically with them. I also have some in my port, but the amount varies with market conditions. Dynamic hedging I call it.
I believe we see a bullish bounce tomorrow, in the morning at least.
This is the last week of the quarter so some of the volatility we’re seeing is portfolio rebalancing by some of the ‘big boys’ as well as profit-taking. A common way to do that rebalancing is to take your profits from the stock, then buy calls while your sell pressure is sending it down, then bid it back up and exercise the calls when they’re ITM. Based on that strategy $BABA is a must watch.
Happy and safe trading all.
These names have my interest piqued for the trading day ahead. While I do still see the market internals continue to weaken, it just means you have to be faster about taking out some profit if it’s a shorter trade. My buddy over in my trading room (sup binks)…has the sort of patience you need with the long(er)-ish options depending on how far down they fall. That and the odds of them coming down against you/us/any trader in a manner that makes the more emotional in us come out. But we’d always been so good in the past at a certain strategy.
Try to remember that markets dynamics are the keys here…this would be a great time to preach Soros and Reflexivity (his Alchemy of Finance is one of the best investing books ever written. I’ve read it more than once because it’s practical yet more lucid than the heavy theoretical econ books. You know, the big ones any of you finance majors used to lug around that taught you efficient market hypothesis was real.
If you haven’t noticed yet (about the EMH fallacies). Here’s a brief concept of Soros and Reflexivity….I do want to write something longform about this soon…but you guys are here for the picks right? :-p
All this has changed as a result of the financial crisis of 2008. My conceptual framework enabled me both to anticipate the crisis and to deal with it when it finally struck. It has also enabled me to explain and predict events better than most others. This has changed my own evaluation and that of many others. My philosophy is no longer a personal matter; it deserves to be taken seriously as a possible contribution to our understanding of reality. That is what has prompted me to give this series of lectures.
So here it goes. Today I shall explain the concepts of fallibility and reflexivity in general terms. Tomorrow I shall apply them to the financial markets and after that, to politics. That will also bring in the concept of open society. In the fourth lecture I shall explore the difference between market values and moral values, and in the fifth I shall offer some predictions and prescriptions for the present moment in history.
I can state the core idea in two relatively simple propositions. One is that in situations that have thinking participants, the participants’ view of the world is always partial and distorted. That is the principle of fallibility. The other is that these distorted views can influence the situation to which they relate because false views lead to inappropriate actions. That is the principle of reflexivity. For instance, treating drug addicts as criminals creates criminal behavior. It misconstrues the problem and interferes with the proper treatment of addicts. As another example, declaring that government is bad tends to make for bad government.– George Soros
[source: https://www.ft.com/content/0ca06172-bfe9-11de-aed2-00144feab49a ]
With that said here’s what I’ve got watchlisted for the day (already in some).
- $PCG – Huge order of aggressive Calls bought towards EOD
- Massive block trade of $CRM; keep an eye out.
- $SPY money flow was negative but $IVV was amongst the strongest in the market yesterday in money flow accumulation. Which makes to sense.
- It’s a holiday weekend, I wouldn’t expect too much volume so don’t go crazy with adding to your portfolios today. I think the market will go up on a drive by crude. I’m going to assume Baker Hughes drops the active rig count.
- I say that because some of the most bullish options flow was into the some energy names towards the end of the day.
- The banks that were flat and coy for most of the day yesterday all ended on strong buy volume. So watch $XLF today as well.
- I do think bonds haven’t turned bearish again anything…that’s why i bought an equity starter in $TMF yesterday.
- Other Names of Interest: $JD $TSLA [+.55 premarket presently]..LGF.A [+.28] $GE [+.06]
- $AAPL was up way higher but is being brought down now, which a likely explanation as to why the markets as aa whole just came down.
- In this environment you don’t want to be selling volatility yet. Things are too frail.
- Something is up with $AFSI … big order in the name was cancelled at then replaced for a lower fill…which makes me want to think that almost has to imply buy activity.
- $MU had large block orders yesterday as well as money flow accumulation; $NVDA did also.
- $PBR [careful there though]
Watchlist ’em; let’s see what happens. Per the norm I’ll keep you up to date as we go in the room or on StockTwits.
In-terms of trend shifts; almost all of the bonds are flashing buy signals. $TLT I like there; but as mentioned I took $TMF instead yesterday.
Gold – Short-term but flashing some buy signals.
Silver – Bullish [$SLV or $AGQ]
New [or sustainted] Bullish Equity Signals: $R $NI $CNP $SYMC $COTY
ETFs: Still bullish $TUR and own it. Considering $YANG
Bearish Equity Signals: $BAC $BBY $CTL $REX $TGI
Yeah that should be enough for a watchlist for today I think. I actually made one for those of you with TOS.. http://tos.mx/7oQnbO
Today in History: Star Wars was released on May 25th, 1977. May the force be with you.’
What Is Going On With The Markets?
Well… I don’t know. Anyone who claims to know with precision is probably guessing and pulling their claims out of their asses.
Here’s what I see…
Option flow is pointing towards a choppy week here, we may easily end up on Friday where we started at close on Monday.
The same options flow is pointing towards upside after this weekly options expiration coming Friday ( April 13th, 2018).
The options flow I’ve been seeing is implicative of downside towards the end of the week.
A member of my trading room asked me about my thoughts on the potential for a breakout in gold and the implications on markets.
I told him about avoiding biases…our 1 on 1 conversation went a little something like this…..
That was my quick answer…at least in terms of the short-term potential for a spike in gold as markets get shaky here.
Here’s a bit more of an elaboration…
Ahh..these markets eh?
For some of the newer traders reading this, this may very well be the first time you’ve experienced moderate volatility.
Yes. I said moderate.
As you can see, volatility after 2009 (well o8 technically, aka Q.E.) has been pretty tightly based around $10.00.
So yes, quite moderate. Yet, while we’ve broken some of the 2000 levels… (think tech bubble)…this time it’s different.
Yeah. most people say that it’s never different…boom-bust…boom-bust…and continued. My fundamental response is, yes, that’s how markets work. Boom-bust. But allow me to introduce a quick clip from a great movie (Margin Call) to speak for me and you in that respect.
Bullish Start To The Week, But What’s Next?
It’s been a bumpy two weeks for the indices. A few days have seen massive dips and recoveries. One saw a 300+ move in the dow in the matter of a few hours.
A fair amount of newer traders haven’t traded high volatility market situations like this.
It panics them. It makes them overtrade as they try to recoup losses…usually resulting in more losses.
If the above applies to you, calm down and slow down your trading a bit…
Take a step back sometimes. Think of it like this…if you had bought 1 share of $QQQ on February 1st and done nothing with it, you’d be breakeven as of today. If you had bought one on February 5th as the market seemed to be recovering and held through the dip, you’d be up a fair amount.