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XRT Bearish inclined naked calls 16 Sep expiryWhats The Plan/Trade/Thought I’ve been looking at the retail sector especially since the consumer willingness to spend has been shifting to services/ experiences and entertainment. Household cleaning, groceries, pets, alcohol, recreational vehicles all have seen drops in spend from Q1 2022 to Q2 2022 Walmart has also started laying off people and have also seen a shift in consumer purchase behaviours due to inflation and pandemic lifestyle changes. I believe retails companies have already started becoming defensive Risk Mitigation There is a key S&R line at 73.02 and the final one at 75.72. Once we see break throughs on these we will need to close Imagine Yourself Taking The Other Side With the market becoming bullish since Mid May - June (NASDAQ & S&P). I think taking a bullish position is also possible in the short term. However besides market movement and a dropping oil price, I don’t see how the original bear situation has changed. Look For New Information What am I rejecting the current bull run, which is does make me uncomfortable Next week we have earnings from Walmart, Home Depot, Target, Lowe’s, Bath & Body works. If I had remembered this I would not have entered How Do I Feel Now Uncomfortable Trade Specs Sold 110 Calls @ 0.42 Strike 80 % to Strike 11.94% BP Used: 83K Max Gain: 4620
AMEX:XRTShort
by Ronin_trader
JWN Bearish inclined naked calls 31 July expiryWhats The Plan/Trade/Thought JWN (Nordstrom) is a luxury departmental store chain. With the concerns of the recession and the cooling signs of the job market, layoffs in tech and the overall retail leadership cautiousness during the earnings. I think this is the right direction especially since it is following the larger market direction US retail sales also post the first drop in 5 months as auto purchases plunge and inflation bites Risk Mitigation I have two S&R lines at 26 and 29.46 if it breaches 29.46 it is an immediate close Imagine Yourself Taking The Other Side I would not take a bull position on this. Especially since retail is one of the industries that will be hit first by inflation Look For New Information The slight decline in May, restrained by a plunge in vehicle purchases and other big-ticket items, suggesting moderating demand for goods amid decades-high inflation. I Feel I believe I am aligned with the larger market sentiment. While there might be a technical recovery. I think the drops are deeper than the climbs. Also the media keeps hammering into readers the “recession” word Trade Specs Sold 270 Calls @ 0.34 Strike 31 26% to Strike BP Used: 66460 Max Gain: 9004.5
NYSE:JWNShort
by Ronin_trader
SIG Bearish inclined naked calls 15 July expiryWhats The Plan/Trade/Thought Signet Jewelers is a retailer of diamond jewellery. With the concerns of the recession, the cooling signs of the job market, layoffs in tech and the overall retail leadership cautiousness during the earnings. I think this is the right direction especially since it is following the larger market direction US retail sales also post the first drop in 5 months as auto purchases plunge and inflation bites Risk Mitigation Have two S&R lines before my strike at 69.49 and 65.35. If price breaks 69.49 (7% from strike) will have to start closing this position Imagine Yourself Taking The Other Side It just feels dangerous to be bullish especially since we have seen days where all sectors are red Look For New Information No new information How Do I Feel Now I feel confident about this trade Trade specs Sold 110 Calls @ 0.5 Strike 75 29.33% to Strike BP Used: 66K Max Gain: 5.5k
NYSE:SIGShort
by Ronin_trader
VIXY Bearish inclined Naked Calls 22 July Expiry Whats The Plan/Trade/Thought Selling Calls on the VIXY goes against my market stance. But it has a good distance of 34.35% away from strike. Price action is ranging with the past volatility VIXY’s peak has still been below 24.65. Risk Mitigation There is a S&R lines at 24 There will be volatility and as such I have only purchased a small amount with a BP of 36k and I will be able to hold it even if it goes up by 3x I Feel No feelings Imagine Yourself Taking The Other Side The entire daily chart is ranging so in my opinion this is about being able to sustain the volatility Look For New Information Nothing here Trade Specs Sold 110 Calls @ 0.20 Strike 25 34.35% to Strike BP Used: 36K Max Gain: 5.5k
CBOE:VIXYShort
by Ronin_trader
UAL Bearish inclined naked calls 26 Aug expiryWhats The Plan/Trade/Thought Airlines are doing well with the travel surge, but they are throttling this growth as their operations are unable to handle the demand and the macro economics Flight delays and cancellations have battered the US industry this year as consumers starved for travel during the pandemic have forked over higher fares and crammed onto aircraft. The disruptions, fueled in part by labor shortages and air traffic control issues, have boosted costs as carriers seek to recover from two years of losses. Now concerns are rising that inflation could quash demand. www.bloomberg.com Both DAL and UAL had lacking earnings which is expected Risk Mitigation There is an S&R point at 41.10 and 39.88 (9.51% from entry). These are my alert points where I need to get out because I would probably be wrong Imagine Yourself Taking The Other Side The flip side would be markets rising despite the interest rate increases. This is a possibility but I won’t take this stance as it is even more risky given the larger bearishness and uncertainty Look For New Information I’m rejecting that interest rate hikes could be already priced into the market and as such it will start rallying Meta also just posted their first ever revenue drop in their Q2 earnings and given how Tech is driving the entire market sentiment this aligns nicely to my bearish stance Microsoft also misses estimates and reported lowest earnings growth in two years How Do I Feel Now Feel abit edgy, because it is really late for optimal Aug trade entries, but we needed to wait because of the Earnings and Interest Rate announcements Trade Specs Sold 210 @ 0.30 Strike 43 21% to Strike 74K BP Used Max Gain: 6300
NASDAQ:UAL
by Ronin_trader
Bank Nifty Level & Strategy for 06/09/2022Dear traders, I have identified chart levels based on my analysis, major support, and resistance levels. Please note that I am not a SEBI registered member. Information shared here for educational purpose. Please don’t trust me or anyone for trading/investment purpose. Focus on learning how to fish, trust your own skills and please do consult your financial advisor before trading. FIIs sold in cash -812 crores and bought in F&O 3862 crores. DIIs bought in cash market 534 crores. FIIs added long positions in F&O Index future & stock contracts and reduced short positions in index put & stock put options. FIIs are bullish on market. DIIs added short contracts in Index future, stock future & stock call option. DIIs are bearish on market. Pro traders followed balanced approach. Pro traders have added short contracts in Index future, stock future & hedged their positions using option contracts. Retail traders have added short contracts in Index future, stock future & index short call. Retail traders also heavy bought index put long & stock put long options except stock call long options. Overall retail traders are highly bearish on the market. May god save retail traders. BANK NIFTY Bank Nifty is up by 385 points. Bank Nifty firmly today. PCR shifted up from 0.91 (bearish zone) to 1.2 (buying zone) amid global issues like US Dollar Index at 20 year high, Russia stopping gas supply to Europe & few more. Highest open interest on call side at 40000 (Shifted up from 39500 to 40000) Highest open interest on put side at 38000 (Remained at same level) Federal Bank denied reports of a likely merger with Kotak Bank (slightly negative for BN). SBI 2700 Crores received dues from Vodafone ahead their planned schedule. I don't trade or recommend Vodafone Idea stock but this news is certainly positive for SBI & therefore Bank Nifty NIFTY Nifty is up by just 126 points. PCR shifted up from 0.80 (bearish zone) to 1.07 (buying zone). Nifty traded sideways after initial gap-up. Nifty is trading near major resistance zone. Let us see if Nifty breaks out above 17777 level and make a move towards 18000 level. Highest open interest on call side at 18000 (Remained at same level) Highest open interest on put side at 17000 (Remained at same level) Shall we continue look for sell on rise opportunities near major resistance levels with strict SL? Or Shall we look for buy on dips opportunities near major support levels till it is trading in a range? Please do share your comments. Have a very happy, healthy & profitable day ahead!
NSE:BANKNIFTYLong
by manishmgupta
Commodities: Tug of War between Tight Supply and Weak DemandThis is the 2nd installment of “The Great Wall Street Repricing” series. The price of a commodity is determined by the interaction between the demand and supply of its market. This year, such interaction acts like a Tug of War. On the one hand, tight supply pushes commodity price upward; on the other hand, weak demand pulls the price back down. Commodity prices swing wildly as each side battles for supremacy. News that signals supply disruption sends prices flying. It could be geopolitical tension, bad weather, restrictive government policy, or an oil tanker stuck in the Suez Canal. Meanwhile, high inflation, weak housing market, disappointing retail sales, and Fed rate hikes all raise worry of a global recession and the consequential demand reduction. Not all commodities are created equal. I have made some interesting observation: Commodities primarily used as a production input hold up much better than those being consumed by end users. To prove my point, let’s review the price data at market close on September 2nd. In the energy market: • WTI crude oil ( NYMEX:CL1! ) is settled at $86.4 per barrel, down 11.9% month-to-date (MTD) • RBOB gasoline ( NYMEX:RB1! ) closes at $2.38 a gallon, down 23.3% MTD • Oil Supply: There is no elasticity. Crude oil production capacity is capped in any given year • Demand elasticity: Consumers could adjust their driving habit in response to inflation American Automobile Association (AAA) reports today that national average retail price of regular gasoline is $3.809, down 9.1% MTD, but diesel, at $5.067 a gallon, is down less than 4% MTD. Why? Diesel is mainly used for highway transportation of goods by trucks. Delivery routine has less flexibility to change comparing to consumer driving behavior. In the food market: • Corn ( CBOT:ZC1! ), a main ingredient in livestock and poultry feed, closed at $6.58 per bushel, up 6.7% MTD • Lean hog ( CME:HE1! ) is settled at $0.919 per pound, down 3.7% MTD • Corn price is vert sensitive to supply factors such as plant acreage, weather, and yield • Hog price is more correlated to demand factors, including export of US pork, and consumer seasonal changes of dietary habit • Pork has substitutes. When it gets expensive, consumers could switch to cheaper meat. People in poorer countries could simply reduce meat consumption On August 2nd, I expressed my view in a trade idea titled “Short the Hog Margin if You Expect Lower Pork Price” In the metals market: • High Grade Copper ( COMEX:HG1! ) closed at $3.408 per pound, down 4.2% MTD • Silver ( COMEX:SI1! ) is settled at $17.655 per troy ounce, down 12.6% MTD • Both copper and silver are industrial materials. They declined in response to economic slowdown, but there is a significant difference • About 50% of silver supply is used in industrial applications, with the other 50% being used as a previous metal or for daily use • Consumers will buy less silver jewelry in tough times. This explains why silver declined three times as much as copper. In the credit market: • 2-Year Treasury yield ( CBOT_MINI:2YY1! ) closed at 3.514%, up from 2.950% last month • 10-Year Treasury yield ( CBOT_MINI:10Y1! ) settled at 3.272%, up from 2.727% last month • Both went up in response to Fed’s rate hikes, but there is a difference • 2-Year Note has a direct relationship with Fed Funds rate. It reflects the cost of money (rate hike) and the supply of money (quantitative tightening) • The yield of 10-Year Note also reflects money demand in addition to money supply • In an economic downturn, businesses and consumers will reduce borrowings. The spread between deposit interest and lending rate will be tightened • This makes sense – with lower loan volume, banks are willing to make less What about High Interest Rate and High Inflation In the first installment, we discussed the impact of high rate and high inflation from the perspective of discounted cash flow valuation model. • High interest rate increases the discount factor, the denominator of the equation • High inflation increases production cost and reduces sales, which results in smaller free cash flow, the numerator of the same equation • The combined effect is a lower stock valuation Aligning with what we discuss today, we may find the inflationary impacts differ depending on whether the commodities are industrial materials or bulk consumer products. Inflation means higher price. It is generally good for those commodities primarily used as production input, such as natural resources. Energy producers, metal dealers and mining companies have all made record profit this year. However, if persistent inflation eventually leads to a recession, commodity price would fall due to lower demand. It’s an entirely different story for companies producing bulk consumer products. As we discussed earlier, hog farmers get squeezed by higher feed cost and lower meat price. Jewelers would find customer traffic significantly reduced due to higher prices of gold and silver jewelry. The impact of higher interest rates is more uniform for most commodities. It increases the borrowing costs on anyone engaged in producing, processing, transporting, and using the commodities. Higher cost results in lower usage, which would depress commodity price. In addition, a strong dollar raises the price for overseas consumers when they pay with a weaker foreign currency. I think we have covered a lot today. Let’s take some time to digest and identify market opportunities with these observations. Financial market is extremely volatile this year. Getting an information edge increases your odds of success in managing risk. I suggest leveraging real-time market data for a better gauge of market situation. TradingView users already have access to delayed data. A Pro user could upgrade to real-time CME market data for only $4 a month, a huge discount at the time of high inflation. Happy Trading. Disclaimers *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
NYMEX:CL1!Short
by JimHuangChicago
2
Bank Nifty Levels & Strategy for 30/08/2022Dear traders, I have identified chart levels based on my analysis, major support, and resistance levels. Please note that I am not a SEBI registered member. Information shared here for educational purpose. Please consult your financial advisor before trading. Global cues are quite negative. FIIs sold in cash as well as F&O contracts by 6000 plus crores. Today also Dow Jones and Nasdaq are trading in red. Shall continue to look for sell on rise opportunities till global market sentiments remains negative? Please do share your comments. Have a happy, healthy & profitable day ahead!
NSE:BANKNIFTYShort
by manishmgupta
2
Bank Nifty Level for 26/08/2022Dear traders, I have identified chart levels based on my analysis, major support, and resistance levels. Please note that I am not a SEBI registered member. Information shared here for educational purpose. Please consult your financial advisor before trading. BANK NIFTY Bank Nifty is down by -88 points. Bank Nifty closed near day’s low, below 20 EMA, VWAP levels. Once again, we had a highly volatile day. PCR shifted down from 1.08 to 0.66 which is now back in bearish zone. Highest open interest on call side at 39500 (Shifted down from 40000 to 39500) Highest open interest on put side at 39000 (Shifted up from 38000 to 39000) – BULLS GOT TRAPPED NIFTY Nifty is down by -82.5 points. Nifty closed near day’s low, below 20 EMA, VWAP levels. Once again, we had a highly volatile day. PCR shifted below from 0.84 to 0.76 which is still in bearish zone. Highest open interest on call side at 18500 (Shifted up from 18000 to 18500) Highest open interest on put side at 17000 (Remained same at 17000) Shall we expect trending market tomorrow after Jackson Hole meeting outcome? Please do share your comments. Have a happy, healthy & profitable day ahead!
NSE:BANKNIFTY
by manishmgupta
Nifty Levels for 24/08/2022Dear traders, I have identified chart levels based on my analysis, major support, and resistance levels. Please note that I am not a SEBI registered member. Information shared here for educational purpose. Please consult your financial advisor before trading. NIFTY Nifty is up by 87 points. Nifty closed above 20 EMA , VWAP level near day’s high. We had a highly volatile day. PCR shifted down from 0.60 to 0.83 which is still in bearish zone. Highest open interest on call side at 18000 (Same as yesterday) Highest open interest on put side at 17500 (Shifted up from 17000) FIIs, DIIs & OTHER PARTICIPANTS DERIVATIVE DATA ANALYSIS: FIIs ( Bullish ): FII bought in cash market for 563 crores and bought in derivative market contract for 6510 crores (please do continue to read about whether they bought long positions or short positions). FIIs reduced their index & stock future long contracts & added short positions in index & stock future contracts. FIIs took long positions in index call as put contracts & reduced stock call & put contracts. DIIs (Mild Bullish ): DII sold in cash for -215.2 Crores. DIIs have slightly added new positions in Index & stock future contracts. Heavily reduced positions in options contracts. PRO ( Bearish ): Pro traders have added short index & stock future contracts. Reduced option contracts in index & stock call contracts. Added option contacts in index & stock put contracts. CLIENT ( Bearish ): Retail/ HNI added index & stock future contracts. Significantly reduced their index & stock call option contracts. Added index put contacts & reduced stock put long & short contracts. Shall we continue to expect high volatility in next few days? Shall we look for buy on dips or sell on rise opportunities? Please do share your comments. Have a happy, healthy & profitable day ahead!
NSE:NIFTY
by manishmgupta
XOM : Why Do I Think XOM will Reach 97 Soon.---------------Ticker: $XOM ----------------------Time Frame : 4H ------------------------------ Investment Strategy: Long Trend is broken and retested the trend(Support) and rejected. Trendsi Confirmation of Green Dot and Green line gives me full confidence, we can see XOM 97 very soon. Follow for daily stock, crypto and forex technical analysis. ⚠️ Trading is risky, and I understand nothing is guaranteed. Proper risk management should be in place at all times to minimize losses. Please consult a financial advisor before trading. All Inclusive Trading LLC is not a financial advisor and may not be held liable for any losses which may occur.
NYSE:XOMLong
by Red_Green-TA
3
Macy's (M) Defined Outcome Options StrategyM Consumer spending is the chief concern for retailers, but the market is mixed. Home Depot (HD) and Walmart (WMT) are continuing to post gains while Target (TGT) slides due to inventory surplus on clothing and high-ticket items. Macy’s hasn’t missed a beat since the 2020 lows, recovering more than 30% of its previous share price. We don’t know where the price will be early next year but using custom options strategies, we can define an outcome that has downside protection with upside up to 25% with a gain multiplier of 1.4x on the way up. Defined Outcome : Make up to 25.1% ( 46.7% annualized ), M can fall 24% before you start to lose. Buy 1 $21 call Sell 1 $24 call Sell 1 $16 put Exp 3/17/23 Pros • Beat earnings consensus estimates for last 11 quarters • Price above the monthly 20 period moving average after back to school and going into holiday season • Starting to open Toys “R” Us shops in flagship locations Cons • Inflation concerns for spending • Most analysts are giving it a hold rating
NYSE:MLong
by oliveinvest
1
WIX -WW- Potential Dual BreakoutNASDAQ:WIX ------- All, Been AFK for quite a while didn't trade much since December just converted to cash after a few medium L's around Jan. **I think an obvious disclaimer here is this is contingent on the market/war/fed data not being bad after this. Too fragile right now. On this one I think we have a really good Supply/Demand area and possible breakout. Pretty decent fundamentals overall. I would be looking mainly for an options play w/ cover or just stock. OPTION #1 --- BREAKOUT **Only would take trade on retest of breakout. Target 1: 110 Target 2: 122 Target 3: 134 unlikely without news/huge market news. OPTION #2 --- WEDGE PLAY Assuming breakout fails and it may. I am going to most likely buy the bottom of the wedge/triangle seeing as its a pretty great spot for demand.
NASDAQ:WIXLong
by DigitalData
SPY analysis-option and fundmental the big topic of this month and July has been RECESSION . I believe it depends all on the labour market now if we start to see increasing unemployment that could tip us into a recession. this is why I am short on the SPY because I believe this rally will fizzle out because there have been no real positive changes in the macroeconomics currently to fuel this rally, today we have initial jobless claims which will give us a good insight to which way the labour market is moving. which now is the main factor into the decision if we are going into a recession because the realized strength of the consumer is purely based on them receiving an income. Because of their credit card debt, the US consumer heavily relies on credit cards which could possibly mean with the labour market becoming weaker consumer spending could decrease even further as this has already started to happen. another sign that supports my view is that implied volatility has decreased and the lower the implied volatility the lower the premium paid for the option which means it will fall in value. as well as a put-to-call ratio of 1.265 which shows an increase of negativity around the SPY. currently, we have a volatility smirk for the SPY which is where the implied volatility for lower strike prices so this means investors are buying more puts(short position). this option analysis gives us a good insight into which way the SPY will move. on a micro company level, the cost of debt is increasing because of Hawkish rate hikes. if the cost of debt increases the weighted average cost of capital will increase(WACC) so for a company to be creating value its return on invested capital has to be higher than WACC. the reason I have included this is that i gives a good insight into what is actually causing these companies' value to decrease.
AMEX:SPYShort
by harrybergin
3