1.23 Trade Plan
We opened higher today on Nasdaq and S&P500 to continue that Friday move but it was a bull-trap which created some good opening drive trades short. I’ll keep saying it here - the market is extended and breadth is weak - you’re on the last little leg and distribution is here and there is a leg lower coming.
NVDA 0.00%↑ - as long as it stays below $610 we end up seeing sellers come in and this remains at the top of my list for potential.
We had a great 45 min Monday Q&A call for DeltaOne this afternoon post-market and I was explaining technical and catalyst driven context for the markets. For me that’s important because I know that on names like NVDA 0.00%↑ and MSFT 0.00%↑ right now (among others) that I want to lean short - as a day trader, v. looking at opening up new longs.
The same goes with SMCI 0.00%↑ which had a nasty trap today above $485 but to be fair, it came off of a deep Fib extension at 1.912%. I have a quick lesson tonight in the Premium Video for options traders to explain why selling spreads in certain situations is better than being a directional put buyer.
That’s big money there on SMCI 0.00%↑ this morning being a seller of premium.
Oil finally move higher today which is a good sign and $75 become a technical inflection. If we get another EIA draw Wednesday it’s hard not to see $78-$80 here and I discussed this in the weekly outlook last night.
Energy names are looking ready and a few kick-off earnings this week and I really don’t expect too much bad news. In fact, it’s likely we just continue on the share buy-backs and dividend increases we’ve been seeing so there are some new opening longs I am about to put on in that sector this week.
NFLX 0.00%↑ reports after the bell tomorrow so that will setup a post-earnings vol trade which is something to look forward too regardless of what they report.
The full breakdown is below in the Premium video tonight as I cover:
The $S&P500, Nasdaq, Crude Oil
2 Equity options idea for tomorrow
A Lesson on SMCI and implied volatility