Okay, this is based off the previously posted "19th" thesis.
Issues
Januarys' ATH is arguably Decembers' tail-end
February peak has been $458
Risks:
Long term trend (white triangle) indicates continued declines
Either until March 1st to be optimistic
or until March 14th if taking into consideration a further drop to $42x
Assumptions
$42x is the floor.
we have not reached February lows
we continue to resist at $44x
Opportunities
if $43x is the floor, we will begin the breakout between February 22nd (end of day) until March 1st +
A cautionary example recently is September, where the 19th drop continued after a small bump, all the way to October 4th.
In that example, it took 10 days to rally from 43x to 44x (almost two weeks).
Final Thoughts
If holding calls, it would be reasonable to seek relief on a bounce, as Theta decay will kill them until the recovery.
it is still reasonable to purchase calls throughout any continued drop or side-ways trading, as $44x will be within range.
it is a risk to hold puts.
As you can see, this is not a short-term, day-trading thesis, and began in January ATH with the assumption we will continue a cycle of the 19th downturns.
That thesis has seen the SPY fall from $479 -> $428 between January 4th and 27th (with the first major drop happening on the 19th).
From this perspective, the Thesis is successful for a $50 drop, and puts should have printed hard by now.
Day trading would burn on the inter-week swings.
Do we call a bottom? No we don't. We exit put profits throughout the month until the 18th, and begin purchasing calls in anticipation of the $43x bounce-back.
With the hope it will bounce to an ATH.
Aside from accumulating and holding calls for the next 20-30 days, we will re-enter the "19th" thesis at our next either ATH ($48x+) or Inter-month / quarterly high ($458).
Key Indicators: MSFT AAPL, which providing contradictory trends.
The gut says we will see the drop to $42x.
- red-arrow-down icon represents the 19th drop
- green-arrow-up icons represent follow-on ATH
Issues
Januarys' ATH is arguably Decembers' tail-end
February peak has been $458
Risks:
Long term trend (white triangle) indicates continued declines
Either until March 1st to be optimistic
or until March 14th if taking into consideration a further drop to $42x
Assumptions
$42x is the floor.
we have not reached February lows
we continue to resist at $44x
Opportunities
if $43x is the floor, we will begin the breakout between February 22nd (end of day) until March 1st +
A cautionary example recently is September, where the 19th drop continued after a small bump, all the way to October 4th.
In that example, it took 10 days to rally from 43x to 44x (almost two weeks).
Final Thoughts
If holding calls, it would be reasonable to seek relief on a bounce, as Theta decay will kill them until the recovery.
it is still reasonable to purchase calls throughout any continued drop or side-ways trading, as $44x will be within range.
it is a risk to hold puts.
As you can see, this is not a short-term, day-trading thesis, and began in January ATH with the assumption we will continue a cycle of the 19th downturns.
That thesis has seen the SPY fall from $479 -> $428 between January 4th and 27th (with the first major drop happening on the 19th).
From this perspective, the Thesis is successful for a $50 drop, and puts should have printed hard by now.
Day trading would burn on the inter-week swings.
Do we call a bottom? No we don't. We exit put profits throughout the month until the 18th, and begin purchasing calls in anticipation of the $43x bounce-back.
With the hope it will bounce to an ATH.
Aside from accumulating and holding calls for the next 20-30 days, we will re-enter the "19th" thesis at our next either ATH ($48x+) or Inter-month / quarterly high ($458).
Key Indicators: MSFT AAPL, which providing contradictory trends.
The gut says we will see the drop to $42x.
Bottom following October and January. patterns.