To The Moon

Hey my tiger friends, long time no see, because my strategy has not changed much.I mentioned before that the200 weekly moving average will be a key position.

Now, I review that my Sell PUT at Apple and Tesla did not touch the exercise price. Recently, the big movement led to a sharp rise in option IV, and the premiums were pretty good. But$Activision Blizzard(ATVI)$ fell below $75, which led me to take over and increase my position at $76, which is a slight floating loss. I continue to sell covered calls of $80 to cover the actual loss.

In the second half of last Wednesday, the Federal Reserve decided to raise interest rates by 75bp. The market fell sharply first, then rose sharply after Powell's speech, and then big decline again on Thursday. The S&P 500 saw a lowest point at 3640 in intraday and the Dow fell below the 30000 which is a psychological barrier on Thursday. S&P 500 fell a record 5.8% all week.​

About hiked by 75bp, I don't believe it before May CPI comes out. I think that CPI peaked in March, fell slightly in April, and continued to slightly down in May. But it came out with the highest result. Then I felt that the market forced the Federal Reserve to hike by 75bp, that is, everyone told Powell should raise interest rates by 75bp. Powell was held hostage by the data and the market. On the negative side, the data was really bad, which made him have to go back on his word (Powell said in May that the Fed maintain the pace of raising interest rates by 50bp in June and July).

Wednesday's rally in the second half was interpreted because Powell said that the 75bp interest rate hike will still be maintained in July, but 75bp will not become the norm. From the disk, the market showed a big oversold, a large number of short covering is the cause of pull-up.

Let's take a look at the major indexes. The S&P 500 weekly line closed with a big gap of about 70 points, which looks very bear. However, the 200-weekly moving average has not yet arrived, it is still the big support line at 3500. Now the daily line level is seriously oversold, and the weekly line is also oversold, and the rebound is imminent. I don't know whether to rebound at 3500 points first or rebound down again, but even if it rebounds, it may just fill the gap.​

Nasdaq bounced at the 200-week line, while there were two gaps in the daily last week. On Wednesday, it tried to fill one, but failed. On the whole, Nasdaq may making a bottom around 10500. The worst situation is drawn below, that is, it falls to the starting point before the pandemic in 2020.​The Dow fell below 30,000 points last week and went to make up for the decline. Basically, it returns to the starting point before the pandemic, which is also the gateway of the 200-week line. This downward space is not too large, but it takes time to get out of the bottom.​VIX showed that the market was not scare. Even though the market was crash last Thursday, VIX did not reach the range of ￥38-40. After walking on the upper edge of Bollinger band for few days, it fell back. It can be predicted that there will be no surprise in the short term, and this week it is highly probable that it will go to the middle track.​Individual stocks have no special analysis. Now everyone looks at the key point of the 200-week line of SPX. I will continue the previous strategy, Sell PUT at AAPL $125 and TSLA $600/$550, respectively. However, for individual stocks, the support is very fragile. If the SPX goes to $3500, TSLA will fall below $600 again.​You can pay attention to $VMware(VMW)$. Now its price has dropped to $116 with the market, so I decided to make Sell Put of $115-110. The M&A price is $142.5, even I take over at $115, there is nearly 24%, and the premium can be earned continuously through Sell Covered Call during the period.  Refer to [Options] My trading ideas of M&A cases, VMW&ATVI are the best.

No matter whether SPX bottomed out first or rebounded first to make up for the gap, the market will be relatively quiet in the next two weeks, and everyone has trading opportunities until the June CPI data comes out in early July.

Use SPX's 3500 as reference points to open positions in optimistic stocks through Sell Put. Suppose SPX falls to 3500, or 4.76%, and your stock is usually 2X or 1.5X, roughly estimate it and use it as the price of Sell Put. Of course, if you trade indexes, SPY and QQQ is also a very good Sell Put target.

Reminder: when the market very volatile, the options' IV of high Beta stocks will be particularly high, which means that if you buy options, the income ratio will not be particularly large, but the cost will be very high. In addition, since there is a Federal Reserve meeting in July, it is useless for Powell to say anything now, and the key indicator are the June CPI data, so if you are option sellers, you should not sell too long expire.

$Apple(AAPL)$ $Tesla Motors(TSLA)$ $DJIA(.DJI)$ $Nasdaq 100 Trust(QQQ)$ $SPDR S&P 500 ETF Trust(SPY)$ $NASDAQ(.IXIC)$