$SPY options – another freaky Friday?

Last Friday, the calls in what I’ve ironically labeled for myself the “Fool’s Game” exploded 250%.

In my post in this link below I noted that going into that Friday, my game was looking at its first losing week this year and there had been no trending day during the week also for the first time this year. I define a trending day as any day either the weekly SPY calls or the puts close with a 100% or more gain.


So what’s this week look like? Pretty much the same as last week.

As of today’s close, this day-trading system, buying SPY calls and/or puts, expiring either Wednesday or Friday, is losing money, a jarring 81% for each $10K traded (it was losing 152% at last Thursday’s close). Obviously, one does not trade this with any more than a small portion of any account. In addition, this week again there has been no trending day.

Can last Friday be happening again this week? I’m going to suggest — yes!

SPY is down this week four days in a row (not much) which tends to be a magical number for a turn-around in my experience with swing trading, especially in this bull market. The Nasdaq Comp is down three consecutive days. CNN Finance’s “Fear and Greed” Index is down four days to 21, an “extreme fear” level, a neighborhood in which one should consider going long. Yesterday, 40 of the stocks in my nifty-50 stock list were on sells (that is usually the bottom or the beginning of the bottom in any downswing, however small). Today those stocks clicked up to just 38 on sells. The VIX gave a swing buy signal to go long on tomorrow’s open.

And tomorrow is Friday. There have been twelve trending days by my definition so far this year and seven of them have come on Friday. Freaky.

Added all up, tomorrow looks like a run to the upside again and the calls could go crazy, again, if its another trending day.

Or the market could have a monster fifth-day-down crash…but then that would also be a trending day, only in the puts instead.

Trending days in the “Fool’s Game”…

The market Friday broke to the upside at the open and never looked back.

As a result it was what I’ve now come to call in my mind a “perfect trending day” in what I ironically call the “Fool’s Game”. That is to say since I started trading and tracking weekly SPY calls and puts solely on as longs and solely as day trades to avoid as much time decay as possible, it is a day when the in-the-money option gains more than 100% on the trend for day.

Friday’s expiring weekly SPY 275 calls vaulted on my day-trading signal into the close for 252% profit on the day trade. That is $25,200 for each $10K traded, in this instance 93 contracts (see the white flag on the lower right of the 10-minute chart below).

Going into Friday, last week’s trading was truly looking like a fool’s game.

From Monday to Thursday, the daily trades were down a cumulative 150% for the week, $15k for each $10k traded, the first weekly loss of the year.

But there had been no trending day during the week, by Thursday no 100% plus day, another first for the year.

And it was also a Friday, when the weekly option expires and there are the most volatile movements. There have been twelve trending days (up and down) in the first ten weeks on this year and five of those days have come on a Friday, making Friday this week once again the best possibility for another trending day.

And so it was to be, as it turned out. Rather spectacularly. For 252%, the second biggest day-trading gain of the year (on February 2nd, the Fool’s Game racked up a 265% gain on a put trade), and turning the loss on the trades for the week into an overall 100% profit.

(click on the chart for a larger view)

#MarketTiming weekly $SPY options in the “fool’s game”

If anyone wants to take a peek (or another peek) into the link below from Thursday, or look down at the entry immediately below this one, they’ll see it was said: “In other words, I expect the market to shoot up on Friday”.


The great trader and “Market Wizard” Linda Raschke once put it very simply: “When you see what you are looking for, jump all over it.”

Well, Friday was a day to look for a rally after the market slid sideways to down all week, and rally it did with the Dow up 343 points, the SPX up 43, and the Nasdaq Composite up 127. TQQQ jumped 4% from its Friday open, UPRO did 3.2% from its open.

Needless to say that is better than money in a bank.

But what about THE FOOL’S GAME I’ve been writing about recently, buying weekly SPY calls and puts as day trades?

Friday that system was up 141% with a combination of trades in the weekly 273 put and the 271 call, both expiring that day. The 273 puts lost $1254 per $10K in the trade while the 271 in-the-money calls gained $14,482 per each $10K trade (there were two) for a total gain for the day of 131%.

The Friday expiration makes for the best day trades in the weeklies. Has been that way all year with this Friday as, obviously, no exception. Its 131% net brought the total gain for the week to 226% — $22,600 for no more than $10,000 in any day trade during the week.

I have not much more to say except to remind that everything said here is for entertainment and educational purposes only, and for my own personal trading journal, and should not in any way be construed as investment or trading advice.

#MarketTiming – What a “long” glorious week!

This is an update of this post in this link, made last weekend:

#MarketTiming – Time for a bounce…

Wow! The predicted “bounce” has turned out to have been an understatement to what happened in the market this week.

Remember the 1961 movie “The Absent-Minded Professor” with Fred MacMurray, which introduced the world to flubber? Well, this week was a FLUBBER OF A BOUNCE, and since today it turned long-term breadth positive it is a bounce that has likely turned into a rally.

If I had to guess, instead of just following along, I suspect the pause begins tomorrow. If it gaps up, the rest of the day will likely be flat as the monthly options expiration plays out. If it gaps down or opens flat, there’s a good chance it rises again to the close and starts the pause there.

Just guessing this stuff…

Regardless, it has been a truly glorious week for swing traders – among the leveraged index ETFs TQQQ is up 15.8%, TNA up 12.1%, UPRO up 10.7%, even SVXY in the blistered VIX complex is up 15.3%. The at-the-money monthly SPY 263 call from Monday’s open, expiring tomorrow, is up 179%. Among the bellwether stocks AAPL is up 9.2% (that is a heavy market-cap lift in an awfully short time), BIDU up 13%, NFLX up 11.2%. I’m going to update my bellwether stocks later but suffice it to say here all twelve as of the close today are in the black for the week.

Now for a few cautionary notes.

If there is any trouble with this, it is that it has been a straight up move since last Friday. All the major indexes and most of the sector ETFs are up five days in a row. Much of the market is wildly overbought on short-term basis. This up move has been crazy. It is easily three standard deviations of an average advance and done in five consecutive days! (See the histogram on the Nasdaq Composite chart below.) I can’t even remember the last time anything like that happened, and obviously not in the last six months of this huge bull market. Forty-seven of the stocks on my nifty-50 stock list are on buys with 31 overbought (see the swing trading signals below), and yet we are not at new highs. This is going to have to have a pause, some backing and filling, then a resumption of the upswing before one can be sure it is yet another bullish rally in the on-going bull market.

The trouble with rallies out of hard drops, like the one the market took before this bounce, is that by the time they are obvious, they are sometimes over.

In addition, if the fierce sell-off that has preceded this bounce was a shot across the bow of the bull market, it is possible the buying this week is the last leap into the market by those long-ago left behind — if so, and if this rally fizzles before new highs (or even at marginal new highs) then this could be an advance before a mighty, mighty big flop.

Whenever this ends, we are going to have one of the biggest bear markets in history. If you don’t think so, you must not know history or you think “it’s different this time.” History says it is never different this time.

Even flubber bounces had to come back to earth.



PRICE: Buy. (Day 5).
VOLATILITY: Buy, (Day 5).


SPY CLOSE – 273.03
QQQ CLOSE – 165.70
CNN MONEY’S FEAR AND GREED INDEX: 11, falling, extreme fear level).
NIFTY-50 STOCK LIST: 47 Buys; 31 Overbought, 0 Oversold, 1 new buys today, 1 new sells.

(click on the chart for a larger view)

$SPY #Options – #DayTrading 10K in weekly puts…FINAL UP 55%

Trading weekly 286 puts – 64 contracts at $1.49 – to start the day trade.

Current return per $10K in the white flag on the lower right of the chart below.

Will update.

Update #1 – stop at breakeven.

Update #2 – the trade topped out at up 39% (the green vertical line on the updated chart below). Violated its rising moving average at up 15% (the first red vertical line), a point at which to take some or all off for the day.

Stopped out at break even (the second red vertical line).

Obviously a disappointing day-trade in the put. Just as obvious it is the trades that do not hit the stop loss that make the most money.

Update#3 – Reentry at $1.49 again, $10K, 64 contracts. Stop at breakeven. See updated chart below.

FINAL UPDATE: the last entry in the puts rode the sell off to the close, netting approximately 55%, $5,500 per $10K in the trade. So the disappointing, even with the first stop loss, day in puts turned out to be just fine. See final updated chart below.

TUESDAY UPDATE: Another day trade in puts, triggered off SPY’s gap at the open. A fairly frustrating sideways move after the open. Stopped out on the first entry for a 12.2% loss on $10K in the weekly in-the-money 284 strike, 36 contracts. Reentered the 284 strike, 41 contracts, for a 27% gain into the close, for a total net of 14.8% on the day, $1,480 per $10K in capital. I’ll skip the chart for today.

(click on chart for a larger view)

$SPY $QQQ #Options – Day trading $10K…Final Update


As other bullish week in the bull market begins to draw to a close, the $10K buys in the weekly in-the-money SPY 283 calls and QQQ 168 calls are up 45% and 28% mid-day (see chart below). That is $4500 and $2800 on a $10,000 buy in each index ETF.

Will update on the close.

UPDATE: The week ended with a glorious options trade in the weekly SPY and QQQ options. The SPY 283 call, expiring Friday, was up 130%, $13,300 per $10K traded for the day. The QQQ 186 call, expiring Friday, was up 96%, $9.660 per $10K traded for the day.


(click on the chart for a larger view)

#DayTrading #SPYoptions – Ho-hum, another 80 to 120%


Today was again a day to live for in “The Fool’s Game.”

The weekly SPY options bracketing the open at 280.17 — the 279, 280, and 281 calls expiring Friday — netted 80%, 100% and 120% respectively on the $10K day trades. See the white flags on the lower left of each chart below for the cash gains and percentages per $10K committed to the trades of each strike.

Been a lot of days like this in this bull market.

(click on the charts for a larger view)

#MarketTiming – a choppy Friday leads to a buy-it Monday

Friday’s market action continued its sideways chop as it consolidated the gain from last Wednesday’s trending day to the upside.

As the 10-minute screenshot for the day shows there was almost no money to be made in the choppy action, and if there were any profits to be taken, they would have had to been taken fast while losses would have been easy to come by on both sides of the market (see the flags on the lower right of each chart below).

However, with both the SPY and QQQ closing above their respective opens and intraday moving averages, as well as all end-of-day swing signals turning bullish again, the initial trade on Monday is to the buy side (see table below) for another possible up swing.

Long-term breadth remains down, but barely (-1) with the threat of another bullish whipsaw. It has been whipsawing daily for the past week.

(Needless to say, this market, in general, remains wildly overbought and can pull back any week, any day, any hour, any minute but that is the way it usually is in raging bull markets.)



PRICE: Buy. (Day 1).
VOLATILITY: Buy, (Day 1).


SPY CLOSE – 280.41
QQQ CLOSE – 166.34
CNN MONEY’S FEAR AND GREED INDEX: 80, rising, extreme greed level).
NIFTY-50 STOCK LIST: 30 Buys; 17 Overbought, 3 Oversold, 10 new buys today, 1 new sells.

(click on the chart for a larger view)

$BA – a Boeing trade better than #Bitcoin

I didn’t trade this but WOW!

Ah, the possibilities! The possibilities!

BA gave a buy signal today on a 10-minute chart at 6:40 (pacific time) at 297.26 (see chart panel below). It’s 300 weekly call (expiring today) crossed into the money at 8:00 (pacific time), at 45 cents per contract. Both then just kept going.

At last look a few minutes ago a $10K buy in the 300 call is now worth $106K, up 1000% and change on a 2.6% move in the stock itself.

It would take some real focus to find this trade, and real discipline to take this trade, but it is one of those possibilities that are always there, and sometimes one could just gets lucky.

(click on charts for a larger view)

$SPY $QQQ – day trading weekly options, again up 100%

After the Nasdaq’s big up day to start the new year, all of my swing signal clicked again to buys.

See signals table below.

But the question for discussion today is what those swing signals mean for the day trades in what I’ve been calling the “Fool’s Game”, the practice of going long – LONG – calls and puts each day.

Today, with all swing signals in place, and intraday 10-minute signals on SPY and QQQ also on buys at the end of Tuesday, the buys for the day trade today were on the open.

From that point, a day-trading options player in this game wants nothing more than to not be stopped out any time during the day and to close the trade at the end of the day making money. If it turns out it is a strong trending day, like yesterday to the upside with the QQQ calls, then the day trade becomes a big, sometimes very big winner.

The initial stop loss would have been 10 minutes of risk. If the first bar of the day closed below the day’s open, the position would be sold, no doubt for a loss, and possibly reversed depending on its relation to the moving average. If the option finished above the open, it would be in profit and a stop-loss just below the open could be placed to make it virtually a free trade.

So how is this game going today?

The buy on the open in the weekly SPY and QQQ in the money calls have gone straight up so far for the day with the SPY 268 weekly call up approximately 80% at the moment, and QQQ weekly calls up about 118% (see the chart for an illustration of all of the above).

A 100% day trade…can’t ask for much more than that, but as always in trading it is take what you can get.



PRICE: Buy. (Day 1).
VOLATILITY: Buy, (Day 1).


SPY CLOSE – 268.77
QQQ CLOSE – 158.49
CNN MONEY’S FEAR AND GREED INDEX: (62, rising, greed level).
NIFTY-50 STOCK LIST: 30 Buys; 18 Overbought, 0 Oversold, 17 new buys today, 5 new sells.

(click on the chart for a larger view)