Bull Trap Confirmed?!?!
What a ride -- what a ride! The best news? We get to do it all again tomorrow!!!
The markets got their nuts kick in today. If you missed the stream, the bears were able to flex their strength due to some hawkish Fed statements. Fed Chair Powell told the Senate to expect more rate hikes and a higher peak. This inflation-fighting measure will have the effect of lessening demand, which inadvertently puts downward pressure on stocks. It's also worthwhile to note that the dollar, tracked by DXY, has been extremely strong. In fact, it almost had a major breakout.
Powell will be continuing his testimony tomorrow with the House. Personally, I'm expecting more hawkish commentary. If the dollar continues to display strength, I'm looking for the equities market to continue to sell off. My positions are listed below -- they are clearly neutral-bearish (I'm biased). Overall, things should work out nicely if the SPY continues down to $395ish.
Market Events: March 8th
08:15 AM ADP Employment
08:30 AM U.S. trade balance
10:00 AM Fed Chairman Powell Testifies To House (I'll be streaming this!)
10:00 AM Job Openings (JOLTS)
02:00 PM Beige Book
Seasonality Update
S&P 500 Seasonal Bias (March 8th)
- Bull Win Percentage: 56%
- Profit Factor: 0.33
- Bias: Bearish
Equity Curve -->
Current Account Value (March 7th)
$10,849.33
Daily Realized P&L: +$105
YTD Realized P&L: +$674
Closed Position(s) +$105
TSLA $245/$250 CCS (3) March 31st
- Original Credit: $0.55/ea
- Closed Debit: $0.20/ea
- P&L: +$105 (+63.6%)
New Position(s)
NVDA Call Credit Spread (2) March 31st
- Sold: $270 & Bought: $275 --> Credit: $0.71/ea
- Max Return: $71/ea & Max Risk: $429/ea
- Profit Target: $0.25/ea
- Profit Odds: 89%
Reasoning: The market was falling dramatically after Powell's testimony. On the other hand, NVDA was continuing an abnormal bullish pump. Nvidia is a rather large company, which means it rarely bucks the trend of the NASDAQ (QQQ). I figured NVDA would eventually fall, or a minimum, calm down. Fortunately for me, things played out in my favor rather quickly.
Current Position(s)
COIN Call Credit Spread (5) March 17th
- Sold: $72 & Bought: $77 --> Credit: $0.50/ea
- Max Return: $50/ea & Max Risk: $250/ea
- Current Value: $0.58/ea
- Profit Target: $0.20/ea
- Profit Odds: 83%
META Call Credit Spread (5) March 17th
- Sold: $190 & Bought: $192.5 --> Credit: $0.33/ea
- Max Return: $33/ea & Max Risk: $217/ea
- Current Value: $0.75/ea
- Profit Target: $0.15/ea
- Profit Odds: 67%
META Put Credit Spread (10) March 17th
- Sold: $170 & Bought: $167.50 --> Credit: $0.18/ea
- Max Return: $18/ea & Max Risk: $232/ea
- Current Value: $0.23/ea
- Profit Target: Undecided
- Profit Odds: 86%
SPY Call Credit Spread (3) March 17th
- Sold: $409 & Bought: $412 --> Credit: $0.56/ea
- Max Return: $56/ea & Max Risk: $244/ea
- Current Value: $0.52/ea
- Profit Target: $0.25/ea
- Profit Odds: 81%
QQQ Call Credit Spread (5) March 24th
- Sold: $313 & Bought: $315 --> Credit: $0.38/ea
- Max Return: $38/ea & Max Risk: $162/ea
- Current Value: $0.29/ea
- Profit Target: $0.15/ea
- Profit Odds: 86%
SPY #2 Call Credit Spread (4) March 31st
- Sold: $415 & Bought: $417 --> Credit: $0.42/ea
- Max Return: $42/ea & Max Risk: $158/ea
- Current Value: $0.33/ea
- Profit Target: $0.20/ea
- Profit Odds: 83%
TSLA #2 Call Credit Spread (5) March 31st
- Sold: $220 & Bought: $222.50 --> Credit: $0.37/ea
- Max Return: $37/ea & Max Risk: $213/ea
- Current Value: $0.23/ea
- Profit Target: $0.15/ea
- Profit Odds: 87%
WMT Call Credit Spread (10) March 31st
- Sold: $145 & Bought: $146 --> Credit: $0.20/ea
- Max Return: $20/ea & Max Risk: $80/ea
- Current Value: $0.13/ea
- Profit Target: $0.08/ea
- Profit Odds: 83%
SPY #3 Call Credit Spread (5) April 6th
- Sold: $414 & Bought: $417 --> Credit: $0.55/ea
- Max Return: $55/ea & Max Risk: $245/ea
- Current Value: $0.61/ea
- Profit Target: $0.20/ea
- Profit Odds: 80%
My Thoughts
I'm feeling less nervous about my overall positioning. My META call credit spread is still a little sus, but I haven't lost all hope. If Powell continues with his hawkish posturing tomorrow, I think I'll be golden. The new NVDA spread from today, and WMT spread from yesterday, are making me particularly happy.
Here are a few of my upcoming price targets:
- SPY $395.25
- QQQ $294.43 (Gap Fill)
- META $175
- NVDA $224 & $211
- COIN $55
In the event that Powell becomes dovish, my positions and price targets, will be blown up. Stay tuned for the fireworks.
Thanks for reading -- I appreciate you! Let me know your thoughts in a comment below.
Notes
Max Return (Credit Spreads): The credit received when creating the position. This is achieved when you get to the expiration date and the price is below the sold contract for a Call Credit Spread and above the sold contract for a Put Credit Spread.
Max Risk (Credit Spreads): The difference between the spread's two strikes minus the credit received when the position was created.
Breakeven (Credit Spreads): The sold strike plus the credit for CCS and the strike minus the credit for PCS.
RISK WARNING: Trading involves HIGH RISK and YOU CAN LOSE a lot of money. Do not risk any money you cannot afford to lose. Trading is not suitable for all investors. We are not registered investment advisors. We do not provide trading or investment advice. We provide research and education through the issuance of statistical information containing no expression of opinion as to the investment merits of a particular security. Information contained herein should not be considered a solicitation to buy or sell any security or engage in a particular investment strategy. Past performance is not necessarily indicative of future results. Links above include affiliate commission or referrals. I'm part of an affiliate network and I receive compensation from partnering websites. The video is accurate as of the posting date but may not be accurate in the future.
Both of these trades hit if held until close -- 6 total units!
Both of these trades hit if held until close -- 6 total units!
SPY missed & QQQ hit
The Trump-China-Trade announcement from the NYT knocked me out of my position. The CCS's were sold at $1.80/ea and I was forced to buy them backl at $4.40 -- This means my realized loss was $3,120 :(
The hedge did exactly what hedge plays are meant to do. It balanced me out! These PCS's were sold at $0.85/ea and expired worthless -- THIS MEANS MY REALIZED GAIN WAS $2,975!
