Weekly Raid #16
Happy August Traders, its the first of the month and Summer trading only has about a month left.
The plan today is to be a little more active in the markets. I will be looking to add some equity to positions I already have and potentially start some new ones.
First some Macro themes for the month
$VIX just continues to be stagnant in this descending triangle. As long as we stay below 16-17 range I estimate that the low volume melt up we have been seeing will remain intact. I have some alerts setup on my trading platform to let me know if we spike above 16.50, with the thought being I now need to pay attention to the direction of the market.
In Bond land the 10Y is making its way back over 4% which along with the Fed Funds rate now firmly over 5 could be a heads up the credit could start to stagnate again.
The SPY 0.00%↑ is just sitting up here on lower and lower volumes traded. As discussed above with the VIX though, I think this low vol melt up continues without a serious catalyst or event to spike volatility up.
Now onto what I am looking at for the day.
I will be watching COIN 0.00%↑ for the next few days heading into earnings. I think there are some potential beneficial catalysts that could make that a solid trade. With that being said we have a yearly POC and a balance area down in the mid 60’s, and volume is pretty thin up here. So the potential play is to ride any potential news north and then short it back to POC with options.
DIS 0.00%↑ has been pretty beaten down lately, and politics aside I think a return trip to 92-94 could be in the cards. This would be a solid option for some Bull verticals, with my method of choice here being Bull Put spreads to collect the premium. Only thing here is Earnings on the 9th and I don’t like to hold options through earnings. So I would close and re-open the trade around earnings.
CAT 0.00%↑ has a better than expected earnings report so i will be looking to start a position in this this week. More then likely some ITM options to try and get a little stock replacement going. My Stop out will be VAH for the last years worth of Value. While out POC is way below us, This stock has been on a tare recently.
As always good luck and solid trading