Options Trading Newsletter - Issue #163 - Back to Mainland [Position Updates - WINNER BIDU/BA]
Back to Mainland
Back to Mainland
It’s been a year since we last crossed paths in the Mainland, and the reunion brings a sense of warmth and familiarity. It’s heartening to see everyone forging ahead, undeterred by the chances that slipped away. Indeed, where there’s direction, there’s bound to be a mix of challenges and triumphs, right? The path to success is never a straight line, and that’s a lesson we all carry with us.
What’s truly rewarding is playing a part in helping others achieve their aspirations, which, in turn, brings a sense of personal fulfillment. In the hustle of corporate life, it’s those rare connections that blossom into lifelong friendships—those are the gems that we hold dear.
Catching up feels like picking up the threads of a conversation that was merely paused, not ended. Together, we continue to weave our tapestry of goals and fulfillment.
And while this message comes to you amidst the busyness of life, rest assured, you’re not forgotten. For quick and critical updates, keep an eye on Notes. And for those who joined in on the BIDU synthetic stock trade, we exited yesterday —congratulations for those who rode with us!
SPX (5099)
SPX nicely bounced off 21 days weekly MA last week after 6 days of losing streak. Google which initially drop after earnings jumped more than 16% after announcing its first dividend following the footsteps of Meta. Meta was not that lucky as it sold off after earnings, but got a consolation rally together with Googl. TSLA & NVDA moved higher by 14-15% for the week too after heavy selloff in the past week. Buying the dip perhaps but could possibly be a relief rally perhaps?
Lets see what is in line this week, Fed fund rate is expected on Wednesday and thereafter unemployment claims and ending the week with non-farm payroll. We could expect nothing coming from the Fed as J.Powell has only recently made some comments on the Fed’s stance sending the market down. Likely it looks to us more as a relief rally than the end of a retracement. Whatever, the case is we are not buying the bounce for now. As security, we are in SPY puts end of Friday as it seems that it can’t get past 5112. Possibly, retracing back to fill the Friday’s gap of 5050-5070 before anything else.
This week’s earnings would probably give a bit more flavour to direction. AMD, LLY, AMZN on Tuesday and AAPL on Thursday.
Trading range for the week is 4900 to 5150.
NDX (17718)
Although NDX recovered last week, it seems that it hit some resistance during Friday’s 2nd half trading. Although Monday it was slightly up, we do not see it being strong and probably just some follow through from past weeks decline.
AMZN and AAPL announcing this week. Keeping it short, on weekly, the momentum is moving into negative or close to negative territory, see the sloping down histogram. On daily, the 21 MA crossed 50 MA from above and 50 MA is sloping down, not a good sign for short term bulls.
Keep your positions tight and exit when you are up, don’t hold them too long as risk of it turning is going to be quick.
Trading range for the week is between 16750 to 17950.
HANG SENG INDEX (17651)
Strong push up last week and yesterday HSI topped back to above 18000 level and retraced on the upper channel. We expect some profit taking back to 17400 levels before going higher.
OPTIONS TODAY - WINNER SYNTHETIC LONG ON BIDU
We took profit today as our BIDU opened gapped up more then $6 well above our profit target. Placed a limit order at $8.00 as I was travelling and it got filled at open. Could have exited higher but exit at $8 is already very good. The trade is now trading at $9.92 as BIDU has gone up to $106.60. Our TP target was only $104.60. We entered the trade at $1.90 on 15 April and the exit at $8 is a 420% profit over 2 weeks.
Entry was purely technical based on Barchart TTM squeeze indicator and news broke yesterday that TSLA is partnering BIDU for China’s self driving maps on its cars. If you would like to check the trade thesis, go to our Options Trading Newsletter Issue #161.
OPTIONS TODAY - UPDATE ON LONG JAPANESE YEN FUTURES
Darn BOJ kept silent last week on its rate policy meeting and maintained rate at 0.10% and it sent JPY spiralling down close to 300 pips in a day. That probably spooked the market and many was caught on that big move requiring to cover their long positions. Obviously our trade was not spared and we also would need some form of intervention miracle to get out of it.
On Monday, the JPY futures bounced off strongly and looks like it has reached its worse limit in over 30 years?? 160 JPY/USD it’s really sad for the Japanese people.
Our trade recovered some of its losses and lets see if it turns back in the next month.
OPTIONS TODAY - TRADE UPDATE IRON CONDOR ON MICRO CRUDE OIL FUTURES - JUNE24
Crude has been bouncing around and pressure is on the downside for now. Our trade is working great with one third of the premium decaying. We will likely take a 50% exit and reposition another trade into July. The trade was entered on 8 April and we expect another 2 weeks or so to reach 50% TP. Checkout our Options Trading Newsletter Issue #160 for the trade analysis.
OPTIONS TODAY - WINNER BA RATIO SPREAD
BA is a wild horse going out of control. It released earnings last week and the price shot up to $177 before quickly selling off. The trade went back into huge profits but my greed for more gave it up. We did not close the position and was again assigned 200 shares.
We were quite comfortable with having that 200 shares in hand because we just needed a little push back to above $172/3 to break even. BA went bottoming below $160 to 52 weeks low and at the same time we see the momentum shift upwards.
Yesterday, we exited the trade after a strong push up for 3 consecutive days. Lets not blow this chance again and stick to the trade plan, no more greed. Trade entry at $1.60 and exit with a $536 profit, 335%. A very testing trade for 49 days. We covered the trade in our Options Trading Newsletter Issue #156.
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TRADERS TALK
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