Bears/shorts are about to get absolutely slaughtered over the next couple weeks. By the time everyone switches long it will tank... Same story every time.
I just went long MSFT with a buy zone 413-419. I will add if we get another lower low but not expecting that.
Initial target 427 by 4/5.
Goal Target 440s by end of April.
Stop loss close below 407.
Don't short this yet.
#Sincerely, BILLIAM YATES
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Bought MSFT Apr 12 425 calls for 4.90.
Not Financial Advice.
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Breakout level to continue to the 427 initial target is 422.72. 3 possible scenarios I'm seeing for today 3/28, in order of most likely:
1) Gap up over 422.72 and continue directly to 427 by end of day (4/2 latest) 2) Consolidate briefly around 422.72 and then breakout to continue toward target (depending on how long it consolidates, latest it will reach 427 in this case 4/5) 3) Gap down to 416-417 (412-413 lowest) and then make explosive bounce directly to 427 (I'm actually in favor of this scenario because it would give an opportunity to load the boat with discounted calls)
Regardless of which of the above scenarios, this is a bullish setup and it will hit 427 by end of next week. 427 point target, 425-429 target range.
-I will be taking profits on half my position in the initial target range
- after it hits that it will pullback to test 422.72 for support before continuing higher to goal target of 440s by end of April. I will add more calls if 422.72 holds as support, and if not I'll sell the remainder of calls
-Intermediate target on the way to 440s is 433. I will take profit on remaining position there
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This bullish leg will complete the structure marking a major top, so this play is only for near-term options, not shares.
- if I was in shares I'd be taking profits along the up-move - First warning sign top is in pre-maturely is a lower high followed by a lower low (so, if we take out 427 but then drop below 412 it has risk for further decline to 398) - This could take the form of an extended wave/blowoff top where it blows past 440s and continues to 450s+... this would create an opportunity for the short of a lifetime.
Long term target is 270-300, so I'm bearish long term.
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Break back below 420 is a signal that its making one final lower low (scenario 3 in the update above).
Catalyst coming with this data release this morning.
"Bears/shorts are about to get absolutely slaughtered over the next couple weeks." Due to what? An MSFT move from 420 to 440? That is not slaughter. Let alone absolute slaughter. That is less than a 5% move. An MSFT move from 420 to 600 or 800 would be slaughter, like Tesla +100% in Oct 2021 or Nvidia +100% this year. Both of which are in the past. No further violent up moves to really slaughter the bears in the future 2 weeks. In buyback blackout now. What flows will drive the up moves next 2 weeks? If anything rebalancing may sell the winners in the first week of the new quarter. Right?
JerryManders
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@bjorn2z, we are nearing the actual top. Could be a melt up, could be in... regardless those with the capital should be shorting at will.. S&P will get cut in half by 2029.
For options players though, unless you go out to extremely long term expiry, there is still major risk for shorts if S&P takes out 5500 before the top is confirmed - which is in the cards.
Thats all I meant.
JerryManders
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@bjorn2z, interestingly, the only thing that will drive the meltup scenario is shorts covering lol.. so my recommendation for those with the capital is keep shorting this SOB it will pay off (don't cover).
But my recommendation to those without the capital is stay tuned, need to play this market nimbly or you'll go extinct.
bjorn2z
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"Bears/shorts are about to get absolutely slaughtered over the next couple weeks." This can still come true before a couple of weeks are over? Or the bears have just started to wake up and the bullish madness that started last November on rate cut drugs is now over?
JerryManders
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@bjorn2z, Things are about to get crazier actually - after this weeks price action the battle between bulls and bears has intensified. What I am seeing coming is one last pullback for market going into early next week before a rally to SPY 530s (it will begin to top there). I'm looking to enter a fresh batch of calls next week.
bjorn2z
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@JerryManders, You are right, that after today's bounce following yesterday's rout, there is more downside next week followed by a last gasp run to 5300 for the S&P500. Whatever that last little gasp of a rally up coming next is, the major move since Oct 27 of last year is done. Rate cuts punch bowl being taken away and risk-free real yields on the short end are juicier than equities earnings yield. With no equity risk premium, and buyback flows in blackout, who would buy and why? The size of the remaining upside is not the kind to slaughter bears, is it? The higher percentage play is to be neutral or short. Right?