Corona Markets -week 2

Foreign markets have now pulled back to the Christmas 2018 lows...

Japan

 DAX

US markets...

We 'could' see a similar pullback over time...

On the bright side, maybe the gov't fiscal stimulus turns things around

  S&P

  DOW

  Small Caps 

-almost there

  Financials

  Energy

  

AMZN -holding up

The Techs have held up pretty well

  

SHOP -very strong

  

BA

  

F Ford 

We could see companies like this one go down...

  AAL -also in bad shape

...and others

Corona markets -Feb 25

Corona Markets

Foreign markets have pulled back to the highs of last July & September...

US markets...

We 'could' see a similar pullback over time...

The Corona thing was just a 'catalyst' for very extended markets.

So the pullback, if we get it, is really just a reset to more normal levels.

With any luck, we don't get there, and we turn around, leaving that green July line behind :)

Update -Looks like we could revisit our old friends around 3025ish 

The DOW & Russell 2000 are already there (July highs)...

Utilities beating SPX & AMZN!

Utilities outperforming an already extended S&P 500

Fed Repo 2019/2020

Since the Fed started the overnight repo operation in early October, the market has rallied nonstop. Hope they dont stop anytime soon...

Broken Wing Butterfly Example -AMZN

This is a bullish trade.

A BWB structured like this (OTM, for a credit) is somewhat similar to an OTM Credit spread, except that: if the stock starts to move down, it actually makes money (up to a point), with max profit actually at a lower strike (short Put strike) than the current price -one could argue its a Bearish trade then.  Whatever, as long as you make money!

Buy 1, sell 2, buy 1 further away and wider.

If the stock rallies, you just keep the credit (like a credit spread).

If the stock goes past the further OTM long strike, it starts to lose money. Of course you might be closing the whole position for a profit once it gets to the 'short strike, so you'd be long gone (unless it does a big gap).

Max risk is the: wide spread - narrow spread (20-10) -Credit (2.14), so 7.86

This is a solid gold strategy, if one takes the time to understand it!

NFLX -Demo Bearish 'broken wing butterfly (BWB)'

Current P&L 09/25



P&L 09/22

09/22  P&L chart
Will close this position soon, with almost $1000 profit (if it keeps on the right track).
This was done for a Debit, so if it went the wrong way, it would be losing.

Price chart -was clearly in a downtrend

Here is another BWB that was established at the same time, but with shorter duration..
It ran out of time, but was a small winner anyway -different structure too (was done for a Credit).
All strikes expired out of the money.

Support & Resistance

Sample charts...

INTC -bottomed out and reversed at a support level

AMZN -reversed right near a support level. Watch for potential resistance at the upper level now...
Maybe even at one of the other levels, before the one drawn like 1900ish...

TSLA -reversed at a support level, but on a much longer time frame

SPY -failed rally today