UPDATE – $SPY #Options trade on a “Turnaround Tuesday”

Pretty great day in the gone-long options world.

Bought the Wednesday 287 call based on the immediate post below speculating that today would be a turnaround day suggested by history and by David Bergstom’s analysis at the “See It Market” site.

Several notable stocks were also up more than 3% from the open: NFLX, AMZN, BABA, and AAPL almost at up 2.95%. TQQQ, the Nasdaq 3xLeveraged ETF, was up 3.8% from the open.

$SPY – Can Orange Become The New Black Swan?

Four days up in a row for SPY and TNA while the Nasdaq, long the leader, now lags…

At the close of the day forty-one of the stocks on my nifty-50 stock list ended in the buy column with fourteen overbought.

Short-term breadth was up again but is now in overbought territory. Usually it takes time to unwind that even when it turns down.

Long-term breadth has been rising now for just three days, giving worthwhile advances in most everything — 40 out of the 50 stock on my list advanced today, and 41 or the 50 are positive on this three-day upswing. It should be noted if long-term breadth turns down now it will put in a fairly serious divergence with the SPY new high (see chart below).

Which bring us to the news?

I don’t ever trade the news but just taking in some market perspective one wonders if something is going to come along and blindside the complacency of this bull advance? Like the odd VIX spike today. Like AAPL gone crazy and possibly running out of buyers besides AAPL itself. Like some sector gone so frothy so fast it signals irrational exuberance has crossed over into insane exuberance (see the pot stocks in the post below).

Or like two of those closest to the jabbering President of the United States suddenly going down coincidentally on the same day, one with a guilty plea and flip, and the other found guilty on 80 criminal counts that could get him 80 years in prison. Trump claims always to be the best, be the greatest, know more than anyone else, likes setting records…how boastful can he be when his administration racks up more convictions than any other, including the Nixon administration?

What’s it mean to the market? As I write this, I see futures are down, with the Dow futures reversing the day. This bull market has been able over and over again to erase the overnight falls in futures. What if this time it doesn’t?

I guess then we might be able one day to look back and say: “Whattaya know…Orange
was the new black…SWAN!”

(click on the chart for a larger view)

$AAPL – still rising in an ever thinning market

AAPL continues to rise among my bellwether stocks.

The others to some degree or another have sold off in recent weeks (see chart panel below). That would indicate the market is being led higher by fewer and fewer leading stocks. Maybe just one since AAPL is in all three major indexes except the Russell.

However, the general market managed to follow through Friday on the short-term breadth signal and turned long-term breadth up. If all goes well for the bulls we should have a rally for a couple of weeks at least that moves more of the bellwether stocks to the upside.

(click on the charts for a larger view)

The $SPY $10K day trade for 26.7%

Just a quick note on the $10K SPY options day trade for Thursday.

The long signal triggered just after the open and rose to a 97% peak (see the chart below) and closed the day up 26.7 percent, $2,670 for each $10K trade (see the white profit flag on the lower right). The is the day trade, start to finish.

Note, though, I consider a 100% gain a “trending day”, which are obviously the most important days to capture. Had this position passed above that threshold it could be locked in that profit level with a trailing stop. Just missed it today. Shucks!

However, it also should be noted that light blue candle after the peak on the chart was a chance to take at least some profits – the $10K was up 56.9% at the point. Short-circuiting the day-trade has not be more profitable over the long run this year than just letting it ride, but there at times when it just looks so obvious…

These trades are all day trades, either in the nearest in-the-money SPY calls or puts (in this case the 283 call, expiring Friday, and are closed at the close of each day. There was no signal for the puts today but on some days there are both calls and puts in play. My entry signal is proprietary, and should be tuned to any individual trader’s courage and risk tolerance.

Keep in mind, these posts are only for entertainment and educational purposes and should not in any way be construed as trading or investment advice.

#SwingTrading – Up, down, sideways, sideways sideways…

It appears the market could go up tomorrow.

“Could go up”, I say that hesitantly because for end-of-the day swing traders like me, this has been a rather confounding week. On Monday, all of my swing signals (based on price, breadth, volatility) were on sells for Tuesday – Tuesday the intraday market went up. At the end of the day Tuesday all of the signals were on buys for Wednesday – Wednesday the intraday went down. At the close Wednesday, all of the signals were again on sells – today the market went up a lot.

Well, in SPY’s case it went back up into the Monday’s price range – in other words, sideways, sideways, sideways…

Although long-term breadth has not turned up, the low above a low in short-term breadth (see the circle on the upper portion of the chart below) usually will bring a bounce. That should happen tomorrow. And if long-term breadth turns up with it, the entire market could rally for a couple of weeks at least, which would be just fine and dandy.

If the market manages to put a final confounding candle on the cake tomorrow with a hard down day then…okay, I’ll say it, then we will have another indication a sizable bear may be stirring in its cave.

(click on the chart for a larger view)

$SPY options – can little losers be the prelude to a big winner?

I came into today expecting a sell-off in the general market.

It didn’t happen, at least not right off the bat. At the end of the day, it sort of sold down in a way that may mean the market “plop” I suggest yesterday will come tomorrow.

For the past three days the market has been in a very tight range – for instance SPY opened Tuesday at 285.39, opened Wednesday again at 285.39 and today at 285.53, a total range of 14 cents in three days. This might be great if one is selling SPY options but I don’t even look at the short side naked because it takes too much margin. Instead in what I’ve been calling, tongue-in-cheek “the fool’s game,” these three days have been yuck. I mean PURE YUCK!

Today was a little loser again.

Because I’ve been posting winners, primarily to explore the potential of day trading SPY calls and puts on the long side (“the fool’s game”), I’ve been met on the internet as expected by a chorus of naysayers who believe what I’m saying is far “too good to be true.” So I’ve decided to post this loser to reassure that while it is good and it is true it is not every day.

Today’s loss came from trading $10K on each trade, first the 284 call, expiring tomorrow (see the the chart on the left below), then the 286 put on the day-trading reversal. The call lost 22.8% percent on the $10K trade, $2282. The put, which was deeply underwater most of the day (see the white profit histogram on the chart on the right below), managed to surge to a .9% profit on the SPY sell-down into the close, $958. Total loss for the day was $1324 for $10K traded, 13.2% for the day.

That 22% loss on the calls and the 13% loss overall is why money management is most important in trading anything, especially any strategy like this. It is intended to be traded small versus one’s overall portfolio and traded everyday.

The tight range of the past three days suggest SPY could go big either way tomorrow. My hope is it will be a trending day either up or down since the real money here is made on trending days, usually days of options expiration like Friday (in fact, YTD Friday’s have been the best days of the week), or like last Monday…

Monday’s SPY 283 call (see the pattern on the charts) trended all day. As a result, the profit for week remains at 57% despite the yuck, yuck chop of Tuesday, Wednesday and today.

As a great, wise film fool once said: “That’s…

(click on the chart for a larger view)

Wednesday in the $10K Day Tradeā€¦Final gain 14%

The SPY options trade had huge swings on the Fed announcement today.

The action was not in the calls which never triggered a system buy despite the AAPL news and gains, but in the 282 put, expiring today, first a plummet (see the chart below), then an immediate snap back to a new high for the day before a final grind down into the close. At its low the trade was down 43% and at its high up 84%, all within 20 minutes.

It was enough to make a trader, long the puts, as dizzy as whirling dervish.

Despite the gyrations, at the close the day trade managed to nab a 14% profit, $1469 on the $10K committed to the trade (see the white flag on the lower right of the chart below).

Still, not a bad day in options no matter what.

(click on the chart for a larger view)

Tuesday in the $10K day Trade…Final 10% gain

Tweeted this trade near the highs of the day. SPY 280 Call, Wednesday expiration, up 38%. TQQQ at the time was up 1.5% ($1500 per $100K).

This was a display of a day trade based on the suggestion (see post below) that Tuesday after three days down in the Nasdaq (two of them hard down) would bounce today with an entry into the trade near the open.

Some defense (like a trailing stop) had to be played to lock in gains intraday since once again with long-term breadth still negative there was the possibility of another fade into the close, which happened. Still (see chart below), the SPY trade netted 10% for the day, and TQQQ added another $450 on its $100K buy.

Not a bad return for the day even if the defense stayed on the bench.

Tomorrow, AAPL will be the focus of the day for the general market. The company reported earnings after the close today and rose eight points in the after-market to an new all time high. The question will be can it vault the market higher for the day or will this be a “sell the news” time?

(click on the chart for a larger view)

#MarketTiming $QQQ – tomorrow the bounce…

After three days down in the Nasdaq, two of them hard downs, it is very likely time for a bounce tomorrow.

All of my bellwether stocks, as suggested yesterday (see posts below), followed through with losses today, led by NFLX down 5.5%. With the exception of AAPL and GOOGL they are all oversold. In addition forty of my nifty-fifty stocks are on sells with 34 of those oversold. Forty or more sells usually means we are at the bottom or the beginning of a swing bottom before a bounce.

Most likely he Nasdaq Composite Index has gone down too far too fast (see chart below). Focus on the chart and note that each time the blue histogram pierces the green lines, what happens next is a bounce, sometimes a substantial bounce. That is the most compelling technical case for timing a bounce for tomorrow. Also note if there is a bounce, it will likely not be a bottom. Bottoms and subsequent rallies come after retests.

This time could be an exception of course since the market can do anything it wants any time it wants but for now, I’m watching tomorrow open primarily for some play on the long side.

(click on the chart for a larger view)

Monday in the $10K day trade FINAL gain 76%

SPY 282 put, expiring today. Final day’s gain 76%.

“THE FOOL’S GAME”