To The Moon

Hey tiger friends, let me review the market and my trading.

My opinions to FOMC's result:The Fed did not exceed expectations, Powell managed expectations moderately. And the market was oversold that led to a big rebound, which did not mean that the market turned from now on and it is still volatile.

• Federal Reserve hiked rate by 50bps as scheduled, and mentioned that 75 bps  increase was not something the committee is actively considering. I think this is the main factor to boost the market in the second half night. Powell fully knows that the market is expected-oriented. Some investors should do crazy buyback who considered 75bp hike and short stocks or hedge.
• The committee decided to begin reducing total USD 47.5 billion its balance sheet with 30 billion of Treasury securities and 17.5 billion of agency debt and MBS on June 1. And the total reducing number will be double three months later (September);
• Emphasize the inflation is much too high. The market is worried about inflation. But I have judged that if the prices of energy and agricultural products tend to stabilize, the peak of inflation rate has already appeared. The market generally believes that it will return to the 2% inflation target in2024;
• Powell was very confident with the US economy. I think we can get guide from the earnings. According to FactSet , half of S&P500's constituent companies have reported their results, and 80% of them exceeded market consensus.

With the rebound in the second half night, the short-term trend changed. S&P500 has finally made a decent rebound, and this rebound will probably reach the MA50 line, that is about $4375-4385. Nasdaq is similar.

As for how to go later, I always think that MA200 line is the bull-bear barrier. Although the S&P rose above the line in the last round, it was a pity that the Nasdaq was discouraged below the line, driving the overall decline again.

Will it be the same this time? I am worried about the market after the rebound. The most of earnings was finished and there are fewer driving factors in the following market. Moreover, as big as Apple, it said that the external influence of Q2 will bring pressure to the company's sales, so most companies which has international businesses or more constraints from the supply chain are hard to escape. However, the specific trend still needs the market to go.​​$Cboe Volatility Index(VIX)$ Although it fell a lot last night, it was still in the high fluctuation range of $25. In next following days, we have to pay attention to whether VIX can fall further.​Let's talk about my trading plan. I originally planned to buy$Tesla Motors(TSLA)$ when it reach $800. It seems no chance this week. But my Tesla's SELL PUT still makes considerable profits this week.​If Tesla continues to rise tonight, I will Sell a Covered Call at strike price of $1050 due next week. I am optimistic about Tesla, but I am cautious about the market. I think the high probability in May is a script such as big swings, callback and rebound again.So I can do Sell Put when TSLA drop and Sell Call when it rebound. But basically I hold its positions.​

For$Apple(AAPL)$, my trading plan is the same as Tesla's. When it goes up, I will do Sell Call, and when it goes down, I will do Sell Put. Sell Call at $175-$180, SellPut at $155-$150. Because the company said at the earnings call that Q2 some regions problems affected sales in 4-8 billion US dollars, I am not really optimistic for Q2.​

I traded$Twitter(TWTR)$'s Sell Call last week. If Twitter goes above $50 I will probably continue to Sell Call at $54 - 53 due in June.

In addition, with the sharp rebound, I will select some companies with poor results to do Sell Call.

It is a hedging idea, I have half of long position, and many Tesla Sell Put. I plan to do Sell Call of some companies with poor fundamentals. If the market rebounds particularly, some Sell Call will be exercised into short stocks. These stocks are also weak in fundamentals. If the market pullback again, it will fall first. As for what, may be$Netflix(NFLX)$and$Meta Platforms, Inc.(FB)$.

NFLX According to the last round of rebound, the high probability position of this round of rebound is $270-$280. Of course, the current price is still relatively low. The premium of Sell Call is not considerable, so I will wait a little longer.​

As for FB, the financial report is really bad. It's just a forced rebound after a round of bad news. If it continues to rebound to around 250, I will make a Sell Call of $280.​