NVDA watch

Been long since I traded options, but every now and then there are some high “R” plays out there.  Bought puts in NVDA ahead of earnings.

A rare play on crypto and auto, as I believe the stock is overpriced due to crypto traders.  Good company, but also believe guidance is priced in, so I’ll ignore the analyst upgrades ahead of earnings (310).

Weak floor at 242.66 with trickle up from 7/31 to date.  This run-up is easier to take out  (-6%).

6-month chart shows true floor at 213.70 (-20%)  so 225 (-15%) is the natural hedge for longs, so I’ll take it as the spec short play with a target.  Subtracting the ask price gives us 223.14 as expected target post-earnings.

NVDA180914P00222500 2018-08-15 3:28PM EDT 222.50 1.86 (a) 1.74 (b)

 

Lots of MU traders are desperate for a win.  OSTK (another pseudo crypto play) was a warning shot.  FANG is in a downturn.  Let the game begin.

Vix20LetsGooo …O

Its O, as is Oh @#$%, or Oooops.   Every O tallies a significant breakdown in the broad market.  I’ve been counting them since the January.

VIX 20 is just an arbitrary number that sets an alert in my mind to watch carefully the sentiment in the market.  As we know, VIX numbers don’t really mean anything, it’s the “spikes” in the VIX that signal panic or greed.

Today market down and VIX is up.   Let’s give it another O.

That beautiful inverse correlation…

3.19.VIX203.19.18.SPY

Short-term bottom 16:

2.26.18VIXwarningShot

VIX Signals Sell

Going to sell into today’s rally.  Strange activity on the VIX.  Market up again while VIX flat for the day.  There’s a slight reversal here going into the close, so I would be careful with longs.

 

VIX INTRADAY — Traders starting to hedge on the rally.

2.26.18VIXwarningShot

 

A VIX that spikes to 30s will produce a 2000 point cumulative multi-day drop in the Dow.  Careful out there!

VIX 3-Month:

2.26.18VIXwarningShot2

3rd red consecutive bar, low volume.  This rally has a thin floor.  Going to play it safe here.  Going to watch for spikes in VIX this week and next.

[TSLA] – Tale of 2 Trades: @310 = Swing Long or Day Short

Two plays in one?  It’s all in the timing…

2.12.18.tsla.homework

Buy signal on Swing / Long  @ 310 on the 1-year chart.   Stop 283.  This is probably the easier trade, but the R-value (risk/reward) is a little low, a little closer to R=1.

Or…

2.12.18.tsla.homework2

Short signal on the DAY/ SHORT @ <310 , Cover @ Friday’s afternoon high, 314.06.   Rationale can be seen in final hour of trading.  All short covering into the weekend.

15:25 – 15:35 –  was a confirmed rally.  This rally extended, but during a sharp reversal of the VIX…

15:40 -15:150  – No strong bars on its 3 point rally, all panic covering.

After all the weak shorts have been shaken out, a VIX explosion to the upside will bring this back down to retest 300 (its just a whole number, but whatever, that’s what everyone looks at).  But looking at the yearly chart, its next support is around 275.  Nice size R on this one if you’re successful on the day trade and decide to ride out a portion into a swing short.

 

So either way you look at it, you can be long or short and get it right.  Volatility is the name of the game at the moment, so shorting on market reversals is more profitable, but as usual, need that STOP set before you enter.


Other plays:

If {
Day short @310   (STOP = 314.06  ||  323.47)

OR

{
Day short @314 (STOP = 323.47)

}