01/04/2019 Recap - members only

>FRIDAY: A very bullish day +4% or more.
- WHY? Great jobs data and more importantly Powell statement was very conducive to a rally.
- Best thing that happened today? We Killed one fear: The Fed. He addressed 3 very important points to stocks: 1) He is not worried about hot inflation even on this jobs number. 2) He IS watching data. (big one) and 3) He is open to change the balance sheet actions (not likely but he noted it).

> NEXT WEEK:

- We have Fed minutes on Wednesday and a bunch of econ reports. I worry most about the inflation data.

- China/US meeting AND the reopen of the Govt? 2 potential upside catalysts.

>>> Watch my video because I have to explain my THESIS... Is this the start of THE RALLY?

Find out HERE.

>TRADING? I am staying long and added some calls. I shared a lot of wins from recent upside trades like AAPL for ex. I trim based on my folio. I am not stubbornly short anywhere and MOST IMPORTANTLY I STAY NIMBLE. We are still in headline mode. And politicians are notorious for ruining a good thing.

- Also Trump becomes combative with China or Dems once the stock market does well.

> SPX open interest for next week: 2605/2625 zone still interesting. 2475 downside pull. So support below that so in theory Credit put spreads should work (if premium left) and calls or debit call spreads too. doing both is really long. And not sure i can stomach. * SPY open interest 01/11: upside pressure to 255 then to 257.2ish. There is room to slide (no support) until 246/245

>VIX/RVX (IMPORTANT?): This VIX/RVX might be THE chart to read.... I am still new to it. If it falls then small caps rally. So if I am correct then a BIG rally is to follow from here. chart

>VXX (CAUTION): $VXX Fear trigger lines and consequences in stock will be inversely related obviously. Caution in either direction is still warranted. Fear is still too high. chart

>SPX (IMPORTANT levels): SPX next week open interest: Supports are at 2439, 2405, 2387, 2355--. Small upside pressure to 2512 where Resistance starts. Same situation at 2527. Above that more resistance at 2552 and some upside (residual) pressure to 2570+. chart

>DIA (Trade - BET): $DIA priced the downside scenario perfectly. Now even here has a neckline to launch it up to 244+ . DIA Feb or march 255/260 area calls or call spreads would be my bet on that. Next week there is a meeting between mid level US and China officials so maybe they juice it up.... or down :-) So medium conviction at best chart

>HD (Trade - brkout in progress?): Has upside potential from the Inverse H&S and target is 180ish. 177 potential Resistance along the way. Will likely be market dependent. Good company and LOW execution is questionable. I would use Feb or longer calls or call spreads. I can do credit put spreads too but I don't do both. I am not taking it. chart

>AAPL (Trade - Catch Falling Knife): Overnight win on the trade noted yesterday. I still like it but it really depends on the folios. It can be a nice short term scalp since we can't rely on headlines. chart

>ARNC (Trade - technical): Long shot technical trade. Medium/low conviction and needs mkt help. I'd use Feb calls or call spreads to target 20/22 area. I chose 21. I merely need a move towards it to inflate my call premiums. Since not high conviction I make it a small bet. chart

>CRM (TRADE - update): CRM update: Am long and very green BUT there is a fight coming. So.... I can book especially if added calls in QQQ or SPY or even DIA. I noted the trade when it was 120s chart

Posted to Create Income with Options … on Jan 04, 2019 — 2:01 PM

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