To The Moon

In summary: From May 6th to May 17th, the market will overall experience range-bound consolidation. For option buyers with medium-term positions (expiring in 3 months), it is recommended to roll them over for an additional month to combat time decay. For short-term positions, day-trading is advised. Option sellers will have a relatively comfortable time, with short positions in either calls or puts likely to be profitable during this period.

The price action on May 17th will probably continue the sideways consolidation, unable to replicate the strength seen on April 19th.

$NVIDIA Corp(NVDA)$
The key resistance levels for Nvidia this week are $900 and $920 ($NVDA 20240510 920.0 CALL$ ). So don't get too excited if the stock rallies on Monday - $920 will likely cap the upside before a pullback. The downside target is uncertain, but even if the stock crashes to $800, it can be supported. Selling $800 puts is the most conservative play ($NVDA 20240510 800.0 PUT$ ). For those with cash to deploy, strike prices of $850 or $880 could also be considered in my opinion.

Why this range? Because Nvidia is likely to close next Friday between $850-$880.

Additionally, a repeat of April 19th is improbable on May 17th. The open interest distribution for May 17th is similar to this week, tilted towards put sellers crushing call buyers. And the put open interest, when sorted by strike, is insufficient to trigger a downside squeeze. Thus, the stock will likely balance out in a range.

$Tesla Motors(TSLA)$
Tesla's trading range this week is $180 to $185. Did you notice the similarity between this Monday's action and last Monday's? Both gapped up initially before selling off.

Reviewing last week, my concerns about the market being outright bearish were misplaced. It turned out that market makers were largely on the put side, and their classic shakeout of call buyers last week was masterful.

Specifically, the stock spiked to $200 on Monday, then on Tuesday, new $200+ strike calls were crushed. On Wednesday, the $185 strike saw 7,000 new call contracts added, but the stock failed to break $185 on Thursday. Undeterred, bulls added 10,000 new contracts at the $190 strike, only for the break to fail again on Friday's open - and that was it.

Notably, the big player who sold $180 calls last week barely broke even. This week, he has chosen to sell calls again - you can guess the strike before looking at the image, as the answer is written above.

My play is to sell the $190 calls (covered with shares), leaving myself a path to exit.

For next Friday, Tesla will likely close in the $180-185 range again. However, I wouldn't advise selling more calls, as Musk is gearing up to take on the shorts, so who knows if we'll see a random upside rip.

$Apple(AAPL)$
Apple will likely continue rangebound trading this week, with Friday's close around $180 or $182.5. Worth noting is that next Friday could see a pullback to $175 to fill the gap down. At this stage, selling puts or calls is fine.

$iShares 20+ Year Treasury Bond ETF(TLT)$
A friend previously asked about TLT. Overall, institutions are taking a cautious stance on inflation this year, which implies they are not very optimistic about rate cuts in 2023. However, they are not outright bearish before mid-June. US inflation has remained steady, and a single month's decline doesn't necessarily signal a persistent trend change. The current optimism about rate cuts can perhaps persist for another couple months, but the stance will depend on subsequent data.

From a yearly perspective, one could look to sell puts at last year's lows. For a short-term bullish view, a combination of selling the $85 puts ($TLT 20240621 85.0 PUT$ ), buying the $93 calls ($TLT 20240621 93.0 CALL$ ), and selling the $97 calls ($TLT 20240621 97.0 CALL$ ) could be considered.