We could have a capitulation day in the near future. We saw some buying overnight off the lows, and it carried into the morning open. SPY gave us a nice push through a few watchlist levels, but we didn't bet the farm on the rally to hold.
If you bought SPY 455 calls at the open, you could have gotten them between $2.20 and $2.50 and sold them at our 458 watchlist level for around $4.50.
After the morning rally, I called out the 456 puts for $1.70 with stops at $1.20 — great risk/reward — and they shot over $10 when it broke our 458 watchlist level dropping into the 444-445 target levels from the watchlist.
SOFI Rips At Last
SoFi Technologies (SOFI) finally gave us a nice rip, breaking the downtrend on the hourly chart. If you grabbed 14 calls on the break, you could have gotten them for about $0.50 and watched them blow past several watchlist levels to a high of $2.50. Fantastic risk-reward balance.
AMZN Bares its Neck
Amazon (AMZN) appears weaker than the market as a whole. It didn't break out anywhere all day. Pops triggered quick and aggressive selling.
If you took 3150 puts from our 3155 watchlist level and sold at the 3120 level, you could have nearly doubled your money as they went from $21 to $41. If you then took 3000 puts, you could have gotten them for $1.50-$2.00 and sold them for $17. Not bad at all.
Expecting a gap down and possible bounce/reversal early tomorrow, but with NFLX in the crapper this could see mid to low 2900s first.
AMD Gives Up the Gap Down
Advanced Micro Devices (AMD) looked poised for downside in the morning open, but it gave us one of our favorite setups — a gap-down reversal on bad news. Even though it was downgraded, people were still interested. You could have grabbed 125 calls off the double bottom on the watchlist level and doubled your money again as the contracts went from $2 to $4.
Yesterday I planned 124p for 0.40 as a yolo targeting 120-122 by Friday. We got 120 today.
BABA Gets Down with the Gap Up
Alibaba (BABA) did the same thing as AMD, but in reverse. It gapped up against the news of the rate cut in China — good news for anyone long on a swing position. For us, it was an opportunity to get short for some gap fill. If you grabbed the 135 puts as it broke out from the 136 watchlist level, you could have gotten them for $1.50-$2.00 and sold them for $3.60 or so at the 133 watchlist level.
TSLA Has a Good Morning
Tesla (TSLA) showed some strength this morning in step with SPY once it broke the premarket high watchlist level. The 1020 calls went from $17-$18 to a high of $30, all before the morning was over.
Bad News for PTON Inspires Good Teamwork
Peloton (PTON) gave us an epic short after Edumomo member Rock posted a news clip about production halt delays. Several members jumped on board, some reaping as much as 500% per contract! I shouted out targeting 20-25 area for the exit during the halt.
Member Trade of the Day
Edumomo member Wey shorted SPY, TSLA, and AMD to grow a baby account a whopping 95.47%, and had the nerve to complain that a mismanaged PLTN trade kept it just short of 100%. I think you'll survive, Wey.
