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IWM

SPY Correction Coming?Hello everyone! First two new charts for 2024. Another year another upside logic market. We're breaking ATH with continually decaying economic data, new banking troubles, new wars, and an election year and markets ignore it all. It's a Fed controlled market so mysterious!? Anyhow, in this chart I did a vague not so accurate EW that began Jan 2022 that bottomed in Oct 2022 which basically bounced off the Feb 2020 highs which pushed us into this new bull market. We finally broke the ATH for the S&P today with 5015ish, which makes me believe we should soon see a corrective wave hit. The first support will be early Jan support of 475. If this stays within this channel, we should see the correction over (C) at the same level as (2) of the bear market of 2022 which is March/April of 455ish giving us about a 10% correction. Now, this is all IF markets go as planned and there are no external factors influencing selling such as a larger scale geopolitical war, banking failures and so on. This is based off a market that is going at the current pace. That being said, I do see a major geopolitical event that will shake markets to their core but until then, we base our market moves on the Feds dovish nonsense. Technicals: - RSI, MACD are about peaked. - VIX is at critical levels
AMEX:SPY
by WorldEconomics
Opening (IRA): IWM April 19th 176 Monied Covered Call... for a 171.23 debit. Comments: Buying stock and selling the -75 call against to emulate the delta metrics of a 25 delta put. This setup gives me a slight bump in premium over selling the 25 delta put due to call IV skew, along with built-in position defense with the short call. Laddering out over time after flattening out at the end of the year. I'll naturally look to add in shorter duration if I can get in at strikes/cost basis below what I currently have on, but will probably continue laddering out to the end of the second quarter (June) for a bit here. Will generally look to take profit at 50% max; look to roll out the short call to reduce cost basis further should price traverse the short call strike (since extrinsic is highest in at-the-money strikes).
AMEX:IWMLong
by NaughtyPines
Russel 2000 WeakLet's take a look at the Russel 2000. This index seems to be the only one between the Dow, Nasdaq, and S&P that is failing to break to new ATH while they are. What we're seeing is a triple top/triple resistance in Aug 2022, than again February 2023, and again August 2023 which was confirmed with a break down to the lows of October 2023 before more manipulation came into play. Some will say inflation is declining and talks of rate cuts seems to be the reason markets rose, but from what we are hearing today from the Fed is that rate cuts aren't likely as they continue to backtrack and downplay rate cuts. Perhaps, they know something before we do... perhaps double peak inflation like the 1970s? Just as everyone believes its declining, surprising new data comes out that proves otherwise? Let's see. Once again we see the Russel 2K failed more recently to break and hold above 2020 with constant rejections. This would be the 4th rejection and we could be on the 5th rejection. And why not? Banks once again are starting to shake, with JPMorgan losing deposits, NY Community Bank failing, banks invested in CRE are tanking and this before the big ending to their Bank Term Funding Programme (BTFP) officially ending. Look at the chart for it, it spiked in March 2023 with the failure of SVB, and it is spiking once again Jan and Feb of 2024. Something coming down the pipelines? I shudder when I see markets breaking ATH, because it has ALWAYS meant markets are more vulnerable to bad news (be it financial, economical, or geopolitical). What we're witnessing is a market that is getting fundamentally weaker and weaker. The economy does not support equities hitting ATH, as earnings are revised lower, personal debt is $17 TRILLION dollars (an ATH) and personal savings are at an all time low. This is not including the decaying jobs market, retail, national debt, manufacturing, consumer sentiment and so on. The floor is a 1 centimeter sheet of ice and it's warming up. This bubble is poised to pop any moment now. My advice Obviously, be vigilant. If you are holding positions from a lower price point and you are making profit, I say hold until whatever event happens and breaks the glass floor. If you are new money looking to invest, I can not suggest investing now at the top with such toxic economy and financials. Do your own research, look at the economic data and see if any of it or at least majority of it gives you peace about investing. People are broke, debt is exploding so retail will inevitably collapse and since we're a retail based economy, you can imagine what comes next. Targets for Russel 2K - IWM 1) 1915, if we break that then 2) 1730, if we break that then 3) 1680, if we break that then 4) 1630, if we break that then run for the hills.
CME_MINI:RTY1!Short
by WorldEconomics
1
Opening (IRA): IWM March 15th 183 Monied Covered Call... for a 179.87 debit. Comments: Doing another one of these in March with a short call strike and cost basis better than what I currently have on at the 186. Selling the -75 delta call, buying a Johnny one lot to emulate a 25 delta short put in order to take advantage of call side IV skew. 3.13 max profit on BPE of 179.87; 1.74% ROC at max; .87% at 50% max. Will generally look to take profit at 50% max/roll out the short call to reduce cost basis further in the event price breaks the short call.
AMEX:IWMLong
by NaughtyPines
$BITO Ready to Run?AMEX:BITO Kathy Woods AMEX:ARKW fund sold OTC:GBTC and bought $92mm AMEX:BITO yesterday. They also sold $COIN. There is the news. I am more of a technical trader, and I like the set-up on BITO here. I have started a one third size position in the anticipation of a break above the small consolidation area or pennant. My stop is tight, just below today’s low of day. I like the fact that it is trading above the IPO AVWAP which means that by volume most shareholders are in the money. That means there is little overhead resistance at this point. It is also trading above all the moving averages. Ideas, not investing / trading advice. Comments always welcome. Thanks for looking.
AMEX:BITOLong
by jaxdog
5
$XOM Undercut and Reverse?NYSE:XOM this is a remarkably simple U&R play. I have gone long with the undercut and today’s reversal from the low on December 12, 2023. That low was $97.48. It broke above that this morning. My stop is simple. If it closes below $97.48, I am out because it will tell me it is resuming the downtrend. Should it push higher tomorrow, I will add to my position. All TBD. Ideas, not investing / trading advice. Comments always welcome. Thanks for looking.
NYSE:XOMLong
by jaxdog
$WYNN Breaking Out?NASDAQ:WYNN Looks like it may be breaking out over the horizontal area of resistance. The 40 Week MA is just above and would be nice if it can break above that too. It is above all shorter term Moving Averages including the 50 Day MA in red. Wynn is rated as an outperform or buy by many brokerage houses with price target well over $100 per share. I have started a 1/3 size position today with a stop just under the day low. I will look to add once it gets over the 40 Week MA and consolidates. All TBD. Ideas, not investing / trading advice. Comments always welcome. Thanks for looking.
NASDAQ:WYNNLong
by jaxdog
$FFTY Forming a VCP (Volatility Contraction Pattern)?AMEX:FFTY looks to me like it is working on a VCP with volatility shrinking and forming a nice wedging pattern. I like this pattern “IF” or when the market turns positive. Here are the negative things I see, as of now it is trading below or right at the 18-month AVWAP. It is right at shorter term resistance. It is below the downward sloping wedge trendline. And the RS is still declining. On the Positive side I see current price is about 11% below the 52-week high. Price is above all the moving averages including the 50 DMA and the 40 Week MA. Price is above the upward sloping wedge trendline. Here is my trading plan, if the overall market looks good, RS breaks above the trendline and price moves above the 18-month AVWAP I will start with a one-third size position. My stop will be price closing below the 50 DMA. If it breaks out over the wedge downtrend line, I will make it a two-thirds sized position. If it can consolidate without stopping me out, I will build to a full position on any resumption of the uptrend. All TBD. Ideas, not investing / trading advice. Comments always welcome. Thanks for looking. AMEX:FFTY The IBD 50 Innovator Fund is comprised of IBD’s picks for high growth stocks. The stocks represented turnover more often than most ETF’s.
AMEX:FFTYLong
by jaxdog
Opening (IRA): IWM Feb 16th 187 Monied Covered Call... for a 183.65 debit. Comments: Doing things a little bit differently here, buying stock and selling the -75 delta call against to emulate the delta of a 25 delta short put, but with the ability to immediately defend the position with the short call, rather than waiting to roll the short put. First, the metrics: Max Profit: 3.35 ($335) Buying Power Effect/Cost Basis/Break Even: 183.65 ROC at Max as a Function of Buying Power Effect: 1.82% ROC at 50% Max: .91% Delta/Theta: 23.1/6.31 Now, the why ... . Previously, I looked to ladder out short puts targeting the shortest duration <16 delta strike paying around 1% of the strike price in credit and utilize a portfolio-wide short delta hedge which used buying power to put on and maintain. Here, I'm looking to manage risk on a per-position basis and to take advantage of some IV skew on the call side (i.e., the IV on the call side is greater than the IV on the put side at the correspondent put strike). Because of this, the premium/max profit is a smidge richer doing things this way relative to just selling a put. This only makes sense in a cash secured environment, where you don't get much BP relief going short put over covered call. On margin, this wouldn't make a lot of sense from a buying power efficient standpoint, so I'd use a different setup where I could manage side risk more effectively (e.g., short strangle, iron condor, Jade Lizard). Naturally, there are more BP efficient, IRA-friendly setups (e.g., Poor Man's Covered Call), but they have some warts of their own. From a trade management standpoint, I'll still look to take profit at 50% max, as I would've with the short puts and look to roll out the short call for a credit if it's tested, reducing cost basis further and improving my break even. Since I have nothing on here, I'm going shorter duration than I ordinarily would, but will start building out in longer duration at intervals as I did previously. On a side note, most people (unscientific survey, gleaned from culling through relevant Reddit posts) who "wheel" or do covered calls do not like this setup because it caps out profit, and I fully understand the preference to sell out-of-the-money calls against your stock and manage the position from there, particularly if the stock pays dividends that are decent. My personal preference, however, is to book realized gains "liberally," have a minimal of crap piles on at any given time, and generate a fairly regular cash flow. As we know from the past year, the market doesn't always go up, and the important thing is to be able to reliably make money in up, sideways, and to a certain extent, down markets with a minimum of headaches which is what these setups (out-of-the-money short puts, monied covered calls) allow me to do. Does it have a hugely sexy ROC that I can show off to chicks at bars? No. Does it pay for the bar tab? Certainly ... .
AMEX:IWMLong
by NaughtyPines