Gap-Ups and Selling Present Multiple Short Opportunities
We started the day looking for longs, but any time we see a gap up, we sharpen our knives for sell programs. Sure enough, some lovely short opportunities opened up, including:
- Tesla (TSLA) gapped up but then had a little sell program before the open and lost the 1010 watchlist level. We changed strategy and looked for a VWAP test and fail, targeting the 980 and 950 levels. We went short at 980 and watched if fall just a few points shy of 950. Perfect.
- Amazon (AMZN) also gapped up and then lost its level. It came up to retest 3432 before giving up and going into sell mode. The 3400 puts went from $33 all the way to $54.50 before turning around.
- Apple (AAPL) was a nice seller after it reached the 182.2 watchlist level. The 180 puts went from $2.32 all the way to $5.78 before finding support at the end of the day.
Two Golden Opportunities to Short SPY
SPY also ripped overnight. We were hoping for a dip to the 470.8 level to get long, but it busted right through that floor and we switched our bias to short. There were two prime opportunities — after the break, and then ten minutes later after a failed VWAP reclaim. We made a solid 300% return on the 468 puts, from $0.53 all the way to $1.75.
We're watching this week to see if the market breaks or holds. Either way, we're looking for index plays off support for long entries. Funds will have to buy sooner or later by the end of the week.
Member Trade of the Day
Edumomo user My-La ended the day 2.7% ahead thanks to that TSLA short. Nice work, My-La!