OI, do you think Friday was the re-test of the 200 day moving average for the SP500? or do you think we might head lower?
I think there has to be some kind of bounce because you can't get any closer to the 200-day ma than what the SPX did on Friday. In the long run, there's too many unknown for the market to sustain any kind of rally. We haven't even seen how the steel and aluminum tariffs play out, and now we have the China tariff in play too. Then you add Trump's musical chair game at the white house where any day anyone of his advisors/staff can be gone causing chaos. Finally, there's no earnings for another month, so we're at a spot here where the easiest route is to lock in profits and sit it out for a month at the very least. The only thing that looks bullish is the oil sector, and that's all I have on the long side right now too. Everything else is bearish. I'm sitting here looking at your chart, and I can't help but look at the bottom left side of that chart with the SPX at 2500.
Its also possible Gold & Gold Miners may be coming off the bottom of a 1 year sideways trade range. Gold is usually a hedge to a declining or uncertain stock market.
I don't know if gold will move up here. Gold played well during the 2008 crash because interest rates fell, dollar index fell, and markets fell pushing everyone into gold. This crash here is a bit different. We're definitely not going to see the big rally in gold, but my guess is traders looking for safety will have plenty to place to put it right now compared to just gold back then. I've added to BIDU, BABA, and CAT this morning. It just feels like a light volume bounce purely on technicals (SP500 hitting 200-day ma). We could still go in either direction right now. We still have the FB fallout dropping even lower and it is pushing others like GOOG, TWTR, and SNAP lower.
Added FB 155 calls at 3.975 avg. The heavy volume this morning suggests a bottom. At least a bottom until more damaging news are released. If nothing else, then it should bounce here. I should note, this is a hedge play against a market rally on my puts too.
I figured, everyone knows I'm using short term contracts....this week's are actually quarterly contracts that expire on Thursday. If you're not smart enough to know that then do some research first. There's no way I'm setting up anything longer than a week on these kind of positions with so much volatility. Only thing I have that are beyond March is the DKS Apr 35 call (losing position), and my play on oil using HES May 50 calls. Other than that, all my puts are short terms, and FB calls are short term too. I'm out of all my BIDU puts here. Took a good loss on this position, and also closed out the FB calls this morning. Again, I'm holding DKS and HES calls for their trend, but its all on HES with DKS initial size only 700. I also still have the CAT puts. I was thinking about closing out all puts, but CAT is struggling here turning red earlier this morning already.
I didn't like that yesterday's volume on FB did not go above the recent 129M posted last week. It was close at 125M. My FB 155 calls were closed, but I've been looking to see if we can get a continuation bounce this week back to 167-168 range. I've added FB apr wk 1 165 calls this time going to hold this position through into early next week. My initial projection was a pure bounce to about $158-$159 where FB might have a hard time going above 160, but that seems to be wrong given the break above 160 in heavy volume. This might suggest that FB wants to test higher resistance points. About $165 was the area of some recent congestion, but the 200-day at 172 would be the ultimate test of resistance and that's where I'll hold it up to if the 165 level holds.
This is some huge mispricing here in the nasdaq. There's no way AMZN and NFLX drop that far. I'm adding both this morning. I'll be looking at Apr wk1 calls for these positions. Also took the time to exit CAT 150 puts this morning. Just time to get out with expiration tomorrow.
I added FB Apr wk1 157.5 calls today. I tried to get into AMZN and NFLX all day yesterday, but price action showed no bounce at all. Then we get the Trump news this morning and AMZN is now down -43 pts below 1400. Thought I'd close out this quarter at 40K, but it looks like it will be closer to $35k. I took some losses on FB calls yesterday playing the bounce a little early, but it looks like my 162 target can happen next week if this bounce continues.