That was a wild swing in a fairly steady market. I'm heavy again though, added about $17k into the market, most on AMZN, ROKU, and NVDA. I want to see the SP500 bounce right back to those highs again. One thing I noticed in that drop at 11AM was that retail stocks didn't really follow. Most held near their highs and all are now back to those levels. BA and CAT are down though and both are probably worth -40pts of the DOW's drop right now. That tells me it's related to trade. We still have about a week and a half of Summer volume left, so I think we can easily push into those highs by that time. I know volume should pick up after labor as it always has, and that'll probably give us the next trend. With the situation at the White House getting more intense, it does feel like once volume kicks in the easy trade is to sell until the midterms. I've been on a wild ride the past 3 weeks running up to about $100k on the account before taking a drop down to about $78k at the lows, but I'm sitting right at $96k now with gains of +3.8k from the WSM trade along with unrealized gains of $10.5k most coming from NTAP calls and the TJX play that I've decided to hold onto. I've got about $46k total in play right now, so that's about all the new positions that I'll have until I close out some of these short term and earning trades.
Closing daily candle charts on the SP500 & Dow30 for 8/23/18. The SP500 has a daily candle sell signal one day after the Dows sell signal, however if it only pulls back to its 20 day moving average, that would only be another 17 points. [SP500, 1 month, daily candles, 20ma & 40ma] ___________________________________________________________________________ The Dow continues its pullback since getting a sell signal. [Dow30, 1 month, daily candles, 20ma & 40ma]
I saw that divergence all day today. The Sp500 held up because large cap tech stocks did falter like the industrials in the DOW index. This is going to be a pull/push kind of week. I'm leaning on the side of the bulls for now. I'm heavy in retail positions (ETSY, ROST, KSS, TJX, and FL) although that ROST drop is going to hurt me tomorrow. If FL bounces, I'll call those 2 earning trades a wash and move on. Still, TJX, KSS and ETSY held onto most of their gains for the day so I know retail stocks are still working for the time being. Techs were mixed into the close. I know the weaker ones like NFLX and FB sold off first, but AAPL held onto those gains and AMZN was at break even. I'd say that news yesterday was the wildcard that kind of pulled everyone back a bit. It'll continue to get digested and right now it feels like we'll pick it back up once it is fully digested. There was the 25% between China/US that also started today. I believe we'll get pushed around a bit more into next week so stronger stocks should hold onto gains while the weaker ones might falter. That's how I'm playing my positions this week. I am looking at something like FB, BA, CAT, or NFLX to short and hedge against my long positions.
Took out FL for a loss of -2400. That took back a chunk of my WSM gains. I will keep ROST here though. Going to also hold the rest through the weekend, and I'm still betting on the SP500 breaking through the highs, so I'm looking at positions to take advantage of that move. Positions holding through the weekend: ROST Sep 95 calls at avg. $2.79, ETSY Sep 45 call at avg $2.76, SQ Sep 75 calls at avg $3.53, NTAP Sep 80 call at avg $2.33, UAL Sep 82.5 call at avg $2.89, TJX Sep 100 calls at avg 3.91, KSS Sep 80 calls at avg $2.76, ROKU Sep 60 calls at avg $3.21, NVDA Aug wk5 270 calls at avg $3.03, and AMZN Aug wk5 1920 calls at avg $17.78. Right now, I'm about 45% in the market, and I'll raise that to 60% by the end of the day if this rally holds.
I do like the markets here. I've added NFLX Aug wk5 $350 calls and LULU Aug wk5 $140 calls here. LULU has earnings next week (I'll have to double check that date), but NFLX is a pure break from its 20-day ma momentum run. I watched NFLX test $340 into the close last night, and the bounce right back up this morning suggest there's momentum to take it higher. I'm looking for $360-$365 by Friday. I have also avg down on the AMZN position to 17.13 avg price.
That NFLX trade this morning is showing a 60% gain already. Thanks for the charts Jeff, and looks like that SP500 has powered back and is now pushing through to new highs. We're at 2875, I wouldn't count out 2900 in 2 weeks possibly heading into the week of Labor day. It looks like the push to record high was helped by the industrials bouncing back. I'm not sure how that DOW looks now, but it's probably close to breaking that high it made days ago and marching higher from there. Right now, the news is in a perfect bubble. We have a start on China/US trade talks, NAFTA is extended, Trump/White house news aren't too wild, and no major earnings to push the market down (WMT and TGT had the potential to do that but those reports were solid). In September, the market will start to look at how the midterms will play out, but my guess is you get a wildcard again in November (Something like November 2016 is possible).
I've avg down on AMZN the entire day and have created a $17.8k position on AMZN's Aug wk5 1920 calls with the avg at $14.84. I'm still looking for that bounce on AMZN. NFLX is up to a gain of 96% now with the 350 calls at $11.60 at last check. The NVDA calls from yesterday is also near highs up to $5.30. I also believed in NVDA breaking $270, and that level gave way today. I think there's nothing above now and NVDA could add another 5pts within a couple of days.
Had 2 NVDA Sep 21 2018 calls @7.20 and @7.41. Sold out much earlier at $17.30 and $17.56. Now, have AMD Oct 19 2018 $17.00 Calls, AEO Nov 16 2018 $24.00 Calls, RUN Sep 21 2018 $13.00 Put, FB Sep 21 2018 $170.00 Calls. The RUN puts looks likely to be a loser. Nice profit on AMD and small profits on FB and AEO. Appreciate looking at your calls as I learn to trade better. Have to learn to hang on a bit longer though.
That's no problem. I write down my trades so I can remind myself to hold these winners longer and cut losers faster. I read back every other week and I can see that I still have the tendency to lock in gains too fast. I'm going to read this week's trade on TJX and I'll see that I closed the trade way too soon. NVDA was probably sold too soon. That earning trades shook out all the weak buyers. This run up to $265 wasn't going to be like last week, and it just pushed through. As for RUN, as long as it's under that 50-day ma, there's always a chance it falls lower. On FB, I had a choice between FB or NFLX, I chose NFLX on the odds that its turn around could be much faster and that's the conclusion that I think buyers are going to have when they make the trade now. AEO has been on a tear along with the rest of the retailers except for those shoe/sports stores. I expected FL to continue its momentum here, but that failed. Still, other retailers are marching higher. Even though ROST's report was just average, it managed to weather all the selling and ended higher on Friday. I like the chart in most of these retails and that's why I stayed in them. I thought about adding more retail positions to my account like jumping into LOW/HD and also adding some mall stocks too, but I'm too far stretched right now and that was the only thing keeping from adding more.
NVDA looks very strong with those 5 large green candlesticks showing strong conviction from the buyers. Probably, will continue to run up next week. You are right, NFLX is a stronger stock compared to FB. FB I got in as a reversal play but, it seems there are still a lot of sellers at this level. Next week could be different, of course. I learn something from you each time and appreciate you sharing your insights on stocks. Will work on holding my options longer as selling too soon is a bad habit I have that needs to be corrected.