
Daily Market Newsletter
April 24, 2019Non-Directional Strategies
Semi-Directional Strategies
Directional Strategies
Bitcoin/Crypto
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May Expiration
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Market Commentary
Price has nowhere to go; I believe that most good results were priced into the mix with the big rally on Monday/Tuesday so it’s buy the rumor/sell the news, apparently. The fact that the price is also jammed against the weekly EM as well as the all-time highs might give one pause before going long. We had this same thing happening back in 2016 before Brexit shook markets out of their slump. We might yet need some exogenous event like that to shake up markets again.
Strategies to play? We should be looking for pullbacks to sell puts against assets that we want. We should be looking for momentum breakouts. Nothing else will work in this environment.
The majority of S&P earnings will be played out by next week.
Earnings Updates – the following companies of note will be reporting over the next few days:
- Friday: AAL, ADM, XOM
- Next Monday: GOOGL, WDC
- Tuesday: AAPL, AMD, GE, MA, MCD, PFE
- Wednesday: MRO, 331 others
- Thursday: UA, X
Here are the big earnings of note left to go this cycle:
- GOOGL: April 29
- AAPL: April 30
Subscriber Update: I will be out of the country and not producing the report from Monday May 20th until Thursday June 6th; in my stead will be a very talented guy by the name of Alex who has started to do some guest videos below so that you get used to his voice and style.
Please sign up for our free daily crypto report here.
Offensive Actions
Offensive Actions for the next trading day:
- None for tomorrow.
Defensive Actions
Defensive actions for the next trading day:
- Any vertical, butterfly, or diagonal debit spreads that we set up are risk-managed from day one, and no defense is really required.
- Closing orders have been entered for all new spreads.
Strategy Summary Graphs
Each graph below represents a summary of the current performance of a strategy category. For an explanation of what the graphs mean, watch this video.
Non-Directional Strategies
Semi-Directional Strategies
Directional Strategies
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Technical Analysis Section
Position Management – NonDirectional Trades
I have the following positions in play:
- SPX 10MAY 2860/2865*2950/2955 Iron Condor (4/15) entered for $2.50 credit. My goal is to secure a 25% return on risk. As long as the price continues to coil in this area underneath the all-time highs, I think that the odds are very good for a target profit return.
No additional trades at this time.
I have no current positions:
Calendar spreads are good for markets in quiet/trending character. If the market reverts back to quiet/trending, then I’ll look to continue this method; if we see the daily chart go into exhaustion I’ll set up a back week calendar.
The calendar spread tracking sheet is available for your download here. Yes, if you follow the math in the sheet, all of the numbers account for commissions in and out of the trade. Please note: If you trade these positions please keep the size small, to the point where you “do not care” about the success or failure of this position.
I have the following positions in play:
- SLV Stock – I have 1000 shares of the SLV that was assigned at the $15 level. I need to sell the next series of calls and I might have to go all the way out to the JUL monthly series if we don’t see a quick pop in price soon.
- PFE 17MAY $39 puts (3/18) sold for $.39 credit. It would be a good idea to clear this one prior to 4/30 earnings, but the recent crash in XLV has made this impossible and I will have to hold onto this one through earnings next week.
No additional trades at this time. We need to be patient to wait on the next pullback. We are “green light” again because the death cross has cleared on most of the indices that we track.
Position Management – Directional Trades
Crypto has had relative strength over the last few weeks and no one believes this rally. The Bear appears to be over and I’m looking for one last shake-out to signal this.
Investors should currently be looking to find technical entries to warehouse BTC/ETH/LTC assets for eventual trades on Alt-coins. You should also be looking to devices like “trezor” or other cold-storage devices to keep your assets off of the network, or other secure wallet such as Navcoin. Relying on the security of your broker is no longer good enough; no one can log into your ETrade account and “steal” your stock assets, but the whole nature of Cryptocurrencies and their portability means that someone can grab your assets and transfer them elsewhere. I will continue to discuss the tradingview platform in daily videos as I think that it is currently the best way to chart the “big three.”
From Thursday’s close at SPY 290.02, there is a +/-3.268 EM into this coming Friday; this is about normal based on recent weeks. The EM targets for this Friday’s close are 293.29 to the upside, and 286.75 to the downside.
A test of the lower EM should be a signal to fade that test to the upside. Upside EM fades might continue to be difficult or be blown through as long as the market is in accumulation mode. Once again the price has moved to the upper EM and I have no intention of fading it.
I will start playing directional bear spreads once we see upside exhaustion on more than one timeframe.
The scan that I discussed in the 8/4/2018 video is available to download for thinkorswim here: http://tos.mx/OvdVnz I will also be adding a second Larry Connors scan to this section as well; here is the Connors Crash scan: http://tos.mx/BhHuKL
I have the following positions in play at this time:
- TGT 17MAY 80/82.5 debit call spread (4/9) entered for $1.25 debit. We will look for a 50% return on this trade. Earnings have already passed for TGT.
Several candidates look really good but we are too close to earnings to take them.
We are also keeping an eye on the Momentum stocks in this section.
No other entries at this point.
The “Hindenburg Strategy” is meant to capture “value” from successive corrections that lead up to the final “death spiral” with a Bear Market. The basic principle is to buy 3-month out long puts on the SPY, and to finance those puts by the sale of credit spreads.
I have no positions at this time. I cleared out the most recent set of puts on the drop to the 200ma back in October. I will “reload” again soon, if/when the weekly chart goes into upside exhaustion. The three-month puts are coming down in price closer to what I’d prefer to pay. (3 months out/90% of current value)