Thursday, August 25th Market Preview
What Happened? -
- We opened again flat, and it was mostly a choppy day. There was again a pop near the open to 415, but the sellers came in batted it back down to 413. We just hung around that level until the end of the day.
- NVDA reported their earnings and their forecast came in weak. This led to a slide in afterhours.
- All this flat action is setting up for a major move on Friday. One more day to get through.
What to Expect on this Week (all times are EST)?
- We got a busy week ahead. To see all the events, check out our new Calendar page! stonks.chat/feed/catalysts
- Thursday - GDP Growth Rate at 8:30am
- Thursday - TSLA's 3 to 1 stock split goes into effect
- Friday - PCE Inflation Data at 8:30am
- Friday - Jerome Powell Speaks at 10am
- It is all about Friday. Those two items have an opportunity to spark a rally.
Current Positions and Plays:
- I again had an opportunity to get out of my calls with minimal damage and again held through the pop and drop. I am looking for a bounce over 416 to exit before Friday.
- I am looking at doing a straddle or strangle play for Friday expiration on SPY. I will enter this at 3:15pm EST. My plan is to grab a call and put that is about $2 or $3 out of the money for Friday's expiration. One will die, and one should payout. Looking for the winner to be above 200%.
What Do I Think?
- SPY Technicals - We are out of oversold on the 30 min chart, 1 hour chart and are now neutral. We are barely out of oversold on the 4 hour chart. The daily are neutral.
- SPY Fibs for ATH to 2022 low - 421 is the .50 and 435 is the .618.
- SPY Fibs for COVID low to ATH - 418 is the .236.
- 200 SMA is at 431.57. This is a big level to jump over and has now proven to be the possible top resistance of this bear market rally.
- QQQ Technicals - We are out of oversold on the 30 min chart, 1 hour chart and are now neutral. We are barely out of oversold on the 4 hour chart. The daily are neutral.
- QQQ Fibs for ATH to 2022 low - 339 is the .50 and 322.54 is the .382.
- QQQ Fibs for COVID low to ATH - 315.59 is the .618. Looking at this as support. This did not hold up at all today. I expect we revisit this level on Tuesday.
THE PLAYS OF THE DAY for THURSDAY for SPY:
- I am sorry for the repetitive nature of these previews, but we have just been in the same zone all week.
- Scenario 1: We gap down under 410. We should see 410 being defended a bit so I expect a bounce here. I will just hold my calls and wait for the bounce.
- Scenario 2: We gap up above 416. I would look for a rejection point near 418, sell my calls here and play my strangle play for Friday.
- Scenario 3: We open flat. Just sit back and see if the QQQ can hold 315.50. If it does, then we have a potential bounce back to 416.
- My confidence level on the 3 scenarios above is low, so the best approach is not trade until Friday. There is no real A+ setup presenting itself for a swing entry right now.
- NOTE: Friday morning is presenting a good momentum opportunity with the PCE and JPow events.
- NOTE: I am turning into a swing trader for various reasons, so please keep that in mind moving forward. My options plays will be always a few weeks out because of this.
Levels I am Watching
- $SPY - levels 404.40 > 408 > 410 > 413 > 416 > 420 > 422 > 427 > 431
- $QQQ - levels 302 > 308 > 313 > 318 > 320 > 323 > 327 > 330 > 338
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Bones Tradez
Created By: | Bones |
Created: | Mar 2, 2022 |
Total Followers: | 27 |
Twitter: | @BonesTradez |
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Options Trader - Not Financial Advise