7/27 Best Idea

Some perspective on where we are today before most of the megacaps report this week. We are back to the weekly 8 ema on the SPY. All that damage felt so bad because we were so incredibly extended. People forget that stocks went up pretty much every day for the whole years sans that 3 week blip in April. Even now AFTER that chaos we’re still sitting at a point where only a few candles ever have closed higher on a weekly basis. Things really aren’t that dire, we were just very overbought.

When you look at the daily of the SPY you see alot worse. The 8/21 ema have crossed in bearish fashion, we closed below the 50 day on thursday but recovered it friday. This isn’t the best setup and it is going to take a strong week of beats and guides from all these critical names to carry us higher or things could remain messy for a bit.

This week’s best idea is a large cap and the amount of extremely far out of the money call buying via leaps really caught my eye. We’ve seen this before a few times in these weekend best ideas like

1. American Express here on 10/7/23 and AXP is up 64% since

2. Kroger here on 10/15/23 and KR is up 25% since which for a grocery store is huge.

So we’re going to look at the trades placed this week, look at some charts, and come up with different trade ideas for various levels of risk from using options to using common with covered calls. If these trades this week are right, and there were thousands of them, this has near 70% upside on one of the world’s largest companies and not one of the tech names everyone has. However you structure it is up to you in the end and your needs, I’m just trying to show you how you can put on a trade that costs you nothing out of pocket, gets you paid to wait and possibly offers big upside.