1/21 Recap

The SPY is reacting very favorably today to Trump’s first day back in office. Last night we got a 300 point sell off in the/NQ after some tariff news and you’re going to have to get used to things like that in Donald’s market, he loves to make headlines which send stocks in both directions. Your best bet is to put his twitter on notifications because it is a dynamic you never had to deal with when Biden was president as he never tweeted about things. Right now things are strong, the 8 is crossing up through the 21 and tonight we have Netflix reporting which is always a big mover for the Nasdaq components. A bad report could have ramifications to Amazon, Disney, and other streamers.

It’s also notable we have so much strength when one of the 2 largest components, Apple, is getting decimated down over 4%. Here is the thing with Apple, it is one of those forever stocks, but when you look at the chart below what do you see? You see that first move below the 8 ema(dark blue line) that was your first warning sign something was off and why you need to watch these moving averages and remove risk when they happen. After that it broke the 21 ema 3 sessions later(light blue line) when that happened you had your confirmation people are selling and buyers are not stepping up. What has happened in the 10 or so sessions since? Multiple downgrades and terrible price action, but if you respected the moving averages, short term you would not have been heavy in it. Now Apple is nearing the 200 day(green line) and that is a spot that should hold or Apple has major issues. You will notice in my book below, I sold weekly puts on Apple below that 200 day for this week as I am expecting a bounce there. Just remember, every stock is a buy, somehwere, the 200 day is that spot for Apple.

Recent Trades

MMM - In the 1/10 Recap here I flagged this MMM risk reversal selling puts at 120 to buy a 140/150 call spread for February. This hit a high of 150 on the nose today after earnings and sits at 148.xx as I type this. Phenomenal trade by whoever placed this. When you look at this chart, what is a “bull flag”, it is a sideways consolidation where all dips are bought, buyers did not want to let this fall too far before stepping in.

My Open Book