Ticker: SPY Position: ~ April 17th expiry ~ $255 Strike Puts ~ Cost 12.32/ Contract ~ Delta = 0.41 ~ Break even at expiry = $242.68 ~ Run 1x contract ~ Total cost = $1,232 (there may be variance in price) Profit/ Exit: ~ Initial target is a gap fill around $230, at this point i will roll the position to remove some of the risk and retain exposure to a...
Trading Edge 2020 Portfolio trade #1 Ticker: MJ Position: - Looking at long dated call options (Jan 15th 2021) - $15 strike (ITM, gives some degree of protection against theta decay) - Cost (approximately $460/ contract, at current mid bid and ask, willing to go as high as $5.00) - 0.72 Delta (ITM) - Running 2x contracts (allows us to sell one on the way...
Quick SPX update: ~ Expecting a brief relief rally (haven't we all) ~ Target is in between the 38.2% and the 50% Fib retracement (2,650 - 2,800) ~ Looking for a potential move to the 21 daily ema, at which point i will be looking to go bearish again ~ The move will likely be on the back of the "positive" stimulus news, but i am very skeptical of how the markets...
I believe in patterns and cycles, particularly within financial markets, there is very often clear symmetry between time periods and price action and i believe wholeheartedly in the study of cycles, so let's begin. 1971/1991 cycle: ~ 20 year cycle from the start of the bull run, to the eventual low after the peak ~ 9 years of the cycle, approximately half,...
1929 - Crash 2000 - Crash 2008 -Crash 2020 - Crash Which of the prior three major crashes most closely resemble the 2020 crash? Certainly, not the 2000 crash, the initial drop is of equal magnitude, however the 2000 crash took over 365 days to reach that low from the highs, the 2020 crash has plumbed lower than 30% in just over 30 days. Similar...
The SPX/ Gold ratio appears to be signaling that a near-term bounce may be in order for equity markets, potentially accompanied with relative weakness in gold. As you can see there is a very clear gap within the ratio that is yet to be filled, the gap is present at approximately 2.00, in other words, the points of the SPX will need to be twice the price of spot...
The gold silver ratio (GSR) has set a new 100 year record, with the value of 1 ounce of gold exceeding over 115 ounces of silver. I would suspect that the drop in silver is largely due to the global slowdown that we are currently facing from the Coronavirus, as silver is predominantly an industrial metal, given that this slowdown is far from over then the logical...
Where to From Here? Bitcoin appears to have broken the established uptrend, with a clear break and multiple closes below the outlined trend line (red line). It is my belief that a primary driver of the selloff in bitcoin was due to the sharp selloff in the equity markets, and the need for liquidity for margin calls, as well as risk re-balancing in...
Bitcoin is one hell of a bumpy ride, with global equity markets puking their guts out and the trading circuit breaker being flipped not once, but twice this week, there was an inevitable scramble for liquidity. This was not isolated to cryptocurrency, gold, corporate bonds, reits, silver and a host of other assets were on the chopping block as investors and...
We may have just seen a key breakdown in the Dow/ Gold Ratio. This would signal that the period of sustained out performance of stocks over gold, and indeed precious metals as a whole may be nearing an end. As you can see on the left hand chart, a monthly cross of the 10 and the 50 moving averages was a strong tell that the trend had reversed, interestingly,...
Ticker: TLT Position: - Sell to Open (STO) $155 Strike Call Option (6th March Expiry) - Buy to Open (BTO) $156 Strike Call Option (6th March Expiry) - This will result in a net credit to your account, i.e. you will be paid for this trade - Remember to (STO) the HIGHER delta option, otherwise this will result in a debit and the trade will then be structured...
BTC has been beaten down for the past few weeks, falling from a high of $10,500 USD, to just shy of $8,500. There is a potential (yet to be confirmed) Inverse Head + Shoulders pattern forming, but i do believe that some more downside is on the cards. A move lower to the 61.8% fib retracement, around the $8,000 USD mark is highly likely, although the shorter term...
Quick update here on the state of the market. The FOMC futures for March 18th are currently pricing in a 100% chance of a rate cut, with a 95% chance of a 50 basis point cut. I warned that we would see a strong central bank response, and it appears we are going to get just that. This comes amidst a recent move in Hong Kong to award it's citizens with...
The SPX appears to be heading for the 200 daily moving average, this comes after the index fell below the 89 ema and subsequently failed to regain the level after last night's close. I am expecting to see a near-term relief rally at some point as markets don't like to move straight down or straight up for too long, that being said the technical picture looks...
The SPX has fallen quite substantially, down approximately 8% over the last few trading days, but a relief rally may be just around the corner. I would expect at best, a 50% retracement ($325) of the total fall, but being more conservative never hurt anyone, so a target of around the 38.2% ($322) fib level would be quite a feasible target in my opinion. Whilst...
Ticker: LTC/USD Position: - Long 15X LTC - Buy up to $82.00 - Exit = 2 closes below weekly 21 ema - Initial target = $100 - Will look to sell a portion of the position when possible to make this a riskless trade (will consider this at 33% gain) Rationale: - Bullish moving average cross over - Bullish MACD cross over is occurring - Trend has shifted to...
Charts: - Top left = SPX - Bottom left = Initial jobless claims (unemployment metric) - Top right = US 10 year and US 2 year spread (Yield curve inversion metric) - Bottom right = Fed funds rate (short-term interest rates) It is no secret that US equities are grossly overvalued, from Warren Buffet to Stanley Druckenmiller to Ray Dalio, the smart money has made...
This is a a very interesting chart today, on the left we have the SPX as of present time (monthly), in the middle we have the SPX/ GOLD ratio (monthly) and on the right we have the SPX chart during the period of the tech wreck (monthly) from 1996-2001. SPX: Then and Now Firstly i want to draw your attention to the previously stated rising support and...