The market rallied overnight, offering us a nice little gap up. SPY pushed right smack into our 472.5 watchlist level, giving us an opportunity to get short.
It also gave us a nice gap up reversal. If you grabbed the 472 puts, you could have filled those orders between $0.70 and $0.90 and sold them for $3. All in the first two hours — just how we like it!
Consumer Price Index data was pretty much in line, but not looking the greatest at its highest point in over forty years. But that doesn't matter to us — we trade around the key levels and follow our plan. Plus, we're 95% cash at the end of the day!
TSLA Outperforms its Cousins
Tesla (TSLA) showed up today with relative strength compared to many other names. We love those names, and they're still on our radar to get long when the selling dies down.
The team took TSLA long on the 1080 reclaim targeting the 1100 watchlist level, then flipped into short mode to ride it back down to VWAP. It didn't move as much as we were expecting based on its relative strength, but it still offered a great opportunity.
You could have grabbed 1100 calls for between $14 and $15 and sold them at $20-$22. On the way down, you could have grabbed the 1080 puts for $11-$12 and sold them for about $18. Nice gains as long as you properly managed your risk.
Looking for dips for swing long into the end of the month. Overall like TSLA for upside as long as 1080 holds.
MSFT Swing Pays Off
If you had taken that Microsoft (MSFT) swing into the close yesterday and sized the trade properly, those contracts made a nice move today. MSFT pushed to the 323 high like we expected, and the 315 calls came in just shy of our $10 target.
Member Trade of the Day
Despite a small loss trading SPY on the chop, Edumomo member GrapeSoda more than made up for it with MSFT on the double inside bar break, ending the day with a baby account up 17%. That's how it works over here ... you don't have to win every trade to come out ahead.