8/15 Recap

The SPY is firmly back in an uptrend now. We got news from Walmart that they are not seeing any recessionary things in their data and we got really strong retail sales numbers. As you can see the SPY reclaimed the 21 ema 3 sessions ago and that was your sign that accumulation was taking place. We had been under the 21 ema since mid July and that was your sign of weakness about to unfold at the time. Now we are back in an uptrend after a month of not being in one and now you have to stay long until we break back below that 21 ema whenever we end up doing so again. That simple premise will keep you from pressing things during downturns, think of it like a magnet, if you get too far above it, you will pull back to it and if you get too far below it as we did last monday, you will pull back up into it, that is why I put out that video that day last monday saying that was likely the bottom short term with the VIX so elevated and the 21 ema a mile above.

The QQQ invalidated that bearish rising wedge and is now stuck below the 50 day, so big tech isn’t in the clear yet like the rest of the market, but it is close. It too closed over the 21 ema 3 sessions again and was sending those conflicting signals I mentioned in yesterday’s recap.

The reality is we have an election 2 months away, I don’t think anybody really thought we were going into the election at lows and in a recession, if that happened the odds would be heavily skewed and there was no way they were going to let that happen. Will we get revisions on all this data we’re seeing? Probably they’ve done that forever, but the recession narrative if it comes, won’t be until after the election.

Another thing I wanted to say was if any of you are still in FOUR from that time I added it a few months back in April here, I would be closing today, that has been an epic run, the name is up 30%+ from when I mentioned buying it after all those insider buys. I’m sure it’s a great company, I really know nothing about it more than the fact they said they had offers to sell over $100 and the CEO added a ton, that was my thesis for the trade, but this isn’t some lifetime hold stock like the megacaps. I don’t add positions very often and I sold my FOUR a while back well before all this because I needed the money for the Apple calls I added. So the thesis was right, but I didn’t catch this amazing move because I don’t have unlimited funds and thought Apple was a higher quality trade. If you did catch this, congrats.

Recent Trades

Draftkings I highlighted 2 days ago here that day someone bought 10,000 calls at $33 for September and the name has gone vertical since to 33.40 now.

You’ll see the risk reversal I noted above and alot of you ask me why I always suggest these and the answer is simply because they’re the only way to play calls with house money. Every name is a buy, somewhere, and I try to build trades to where you sell puts at support and use that money to buy calls. If you buy calls alone and you’re wrong, your money is gone. If you use a risk reversal and you’re wrong, the worst case is you buy whats hopefully a quality name, lower. So as long as you pick and choose which names you’re ok going long you can turn every trade into a potential risk reversal where if you’re right, you’re going to make alot of money and if you’re wrong you end up owning it at lower levels. That is the why and you won’t see these traders on fintwit discussing them because yes it uses alot of margin and it isn’t really a retail trader strategy. These are how larger players utilize options the right way to give them options, I’m just trying to give you my insights on that having done it for a long time. I know it doesn’t fit everyone’s budgets, but again these are just trade ideas from me. You can straight buy calls, you can buy shares, you can sell puts, there are so many ways to utilize this data, risk reversals are complex, but this was my explanation on why I like them.

Trends

2 Week

1 Month

Today’s Unusual Options Flow

Here is today’s link to the database, as always it will expire tomorrow at the open and the rest of today’s trades will be added by the afternoon. This is a big thing people, yesterday someone asked me about the massive BTU trade and why it wasn’t in the recap. It was actually in the database but I had to remind him that I send out the recap mid day for all the people who want to access it during the market session, trades that come in after I send it are still logged into the database, again I do this manually, there is no automation, but there really is no way to get the recap out earlier and fit all the day’s trades in, its just a difficult part of trying to keep everyone happy and why I send this recap out in the middle of the day.