Couldn’t wait could you?! LOL Understand the feeling.
While I don’t want to drag this thread way off course, still want to ask out of pure curiosity and wanting to learn not critique, why so low the strike? I’ve got PLTR on my hot list.
I use to sell a ton of puts, and often to get a discount purchase. I would have considered 170 or 175 with 73 and 145 levels. Why so cheap? Just want to catch if it drops so much more?? 165 is certainly a support/resisitance level but it’s holding pretty darn tight. And yes, I have the advantage of looking at it end of day, but that’s when I typically sold. Curious if I’m missing something.
Lakedog
Who’s now got the itch to sell puts again…
I am just selling puts for a little income Lake. Remember I am completely in Cash (Except fo the new buy today with a small position) I am not trying to catch a bottom or be assigned the put, although if I am assigned I will write calls on it. You are right it really is cheap. What I am trying to do is get at least a half a percent and I would like to keep my Delta below 20 at least. So PLTR with a strike of $65 dollars gives me $.35 and a delta of .0545. So I have a 5 percent chance of being assigned and little over 1/2 of a percent. That isn’t bad for a week, although in normal times I will write them for 1 percent but this isn’t normal times.
I wrote a put on Meta last week with a strike of 537.50 and received $3.01 with a delta of .1630. At the time the stock was at $568.30. Although it is under .20 and I only had a 16 percent chance of being assigned I am sure I will be assigned. Meta isn’t as volatile as Pltr and that is why I had to go higher on my Delta in order to get 1/2 a percent. I am thinking in this market I need to sell puts under a Delta of .10 in order to not get assigned. I am doing this every week. Last week I sold 4, RDDT, NVDA, PLTR, Meta, This week I will probably sell 3 puts and a covered call on Meta.
Trump has been warning us of pain, but has also said there is room for negotiation. Today, the market decided there might be a lot less negotiation than previously expect. We had big gap downs on increase volume, undercut the Attempted-Rally-Day-1-Low and solidified a second-wave-down pattern. Nothing good to say.
Dow Jones Industrial Average tumbled 4%, breaking down below its long-term 200-day moving average. The S&P 500 plunged 4.8%, while the Nasdaq composite plummeted 6%. And the small-cap Russell 2000 sold off 6.6%.
The Nasdaq plunged to its lowest level since August with heavy losses Thursday.
The Dow Jones and S&P 500 had their biggest one-day percentage losses since June 2020, while it was the Nasdaq’s worst day since March 2020, during the Covid crash.
Overall, the stock market wiped out $3.5 trillion in market cap, the biggest one-day loss since March 16, 2020.
U.S. crude oil prices plunged 6.6% to $66.95 a barrel on demand fears and OPEC+ speeding up production increases. It was the biggest percentage decline since July 2022. XLE down 7.85%
Up next, the Labor Department is set to release its March jobs report Friday morning.
Fed Chair Powell is scheduled to speak about the economic outlook at 11:25 a.m. ET Friday
NFLX and SPOT not hurt much. MELI had an upside reversal above 200dma. High end furniture stock RH down 40% I think they make a lot of furniture in Vietnam, which is facing huge tariffs.
I was stopped out of PRMB, put it back on the watchlist. It is holding at the 50sma and still looks strong. But I don’t think this market is anything to play with.
Agree, you could not be sad just waiting for us to get above the 200dma.
That said, I always do foolish things. I have been buy back shares that I previously sold. trying to keep it very small, but in reality, I should have still held that cash. My IBD account is 100% cash (well, I did buy some SQQQ at end of day Friday). But I had been trading around core positions outside of that.
I can tell myself that I avoided some big losses and then got back in at a better price, but it was still foolish to even get in small.
My options are working ok so far but I will see what happens with the ones I was assigned. All of the ones where I had a Delta under 6 percent were not assigned. Although the returns are not very big ( about a 1/2 percent) that still adds up to 2 percent a month.
ENTERED YESTERDAY IN WRONG THREAD-MOVED TO CORRECT
NASDAQ High 16292.28 Low 14784.03 Midpt 15538.155 Close 15603.26
S&P 500 High 5246.57 Low 4835.04 Midpt 5040.805 Close 5062.25
Both indexes technically made Rally Days, but barely, closing barely above 50% of the range. Very weak Rally Days. Time will tell. Lows of the Rally as noted by the lows of the day.
I am talking about how it was up huge early in the day and then goes down. Both of the index’s were up around 4 percent and then finish down 1.5 and 2 percent. That is crazy
I hear you. It is crazy. Today was just as volatile, but at least the low held. There’s too much influence from spoken words and threats. This will take some time to form any base of recovery most likely. There is some support at this level as it is the 50% fib retracement for low of August 2022 to recent high.
Not dramatic, but a level. It will be interesting to see how Market School works through this. It’s clearly one end of a spectrum and may not hold as true. Good learning situation.
This is Day 3 of the attempted rally. Technically this would not be an FTD. Maybe it is the shorts having to close out on the 90-day delay news. But, it could be the second exception. I forget the first exception, but it was on day 3 and the story is Bill walked around asking why they weren’t buying. The PMs said it was day 3 and it does not count, so Bill said it was clearly an FTD so buy something. Webby might say it was an “FTD in spirit”. We will see.
I put on 4 small positions, TGTX, MRX,Bow and EHC. All of my puts and calls are doing well and it looks like I willl be able to walk away with the cash.
The difficulty is that this is NOT normal behavior for any typical pullback/correction nor cyclical bear. These are unusual times. The rough average for SPY annually since 1950 is around 9%. We just gained over a years average in a day. The problem is, it can drop as fast. We’ve all seen it. I seriously doubt that this event parallels any historic ones. Therefore, do the market school rules really apply?? We’ll see how it works out.
The good news is, I’m just studying the market school rules. I bought a few spots yesterday and today. Mortgage is paid. But I have tight, tight stops. Thought about closing them all out today but grandkids are here. No time. But I couldn’t fault anyone for doing day-trading under the current circumstances. The concern now is if we get all settled in and then what happens in 30 days…
Let’s be careful out there,
Lakedog
The volume criteria to make FTD tomorrow could be an issue.
Last night Ken was talking about Leaderboard and how they were tempted to add yesterday, but it was only day 3 and they decided to stick with the rules and not buy.
40-50% of FTDs fail, but every bull run as started with an FTD. The soft rules are to go in slowly, make sure you buys are working before dumping in too much money. So, if you get and FTD that lasts a week and fails, maybe you were only at 20% exposure or less. You wont miss the 15-40% market runs if you are following those rules. Meanwhile, your money in cash is not going down with the market.
The IBD mantra is also that the first couple of days after an attempted rally can be short covering that ends in those couple of days, that is why they want to wait until day 4 to declare an FTD.
I am going to make an independent post on “Missing the biggest days in the market”
Justin Neilsen was talking on Live this morning about how he, Webby, O’Neil and Charles Harris developed the market rules. He specifically was referring to the 50% rally day level and how they struggled to cite a level. Above 80% is clearly more likely to lead to a FTD that works. But they decided an act of comission was better than an act of omission. They wanted to include the fewer times that a 51% rally day worked than not have it. So 50% was used. The message is to apply the rules, but keep the perspective that they are not absolutes. Also, there’s frequent reference to O’Neil adjusting on the fly. Several folks commented that he would have probably asked why no one was buying yesterday as it clearly was a FTD.
My comment, poorly stated, was really to say that despite yesterday being a huge bullish move, we need to be careful. I was actually supporting being minimal and not jump too hard into things. Yes, I have some small positions but less than 5%. But they are doing okay and I’m up some more today.
The only absolute rule is that there is no absolute rule. They are all straws and must be weighed together.
Lakedog
PS Yesterday was apparently the second biggest day in the market
The key take-away is that in looking at some bear markets in history, there are often many rally attempts before success. A graphical way of showing this is to look at a TOS chart using the thinkscript program to map Rally Days:
This is just half of the Dotcom Crisis recovery. While many did have a week or so rally, they all failed mainly by eventually the rally low being undercut.
A couple other aspects to consider are that most (but not all) are very strong candles for the Rally Day and FTD. Also, there is a tightening of the volatility, often involving recovery of the 21 sma or 50 sma when there is a successful rally. But that is an unquantitated observation, not proven fact. The VIX recovery to lower, more normal levels does support that. Will need to look at that closer.
Probably should post these comments to another thread, but will do it here (I’m lazy). This is a process to evaluate Market School perspective and I think it has a lot of value. However, at this point I don’t think that it should be used alone. I’m saying that from my perspective and opinion. I’m saying it because while we failed to get a true FTD, there are a lot of signs suggesting we may be bottoming. There is no absolute call, but things to consider. First, the VIX may have peaked. It is still very elevated at 37, but spiked and lowered. Would love to see it below 25-30 at least, but it’s trying. Other sentiment scales have also peaked and that generally means, times are a changing. The other key thing was that we had a good shift to aggressive sectors. XLK, XLI, XLF, XLC and XLY all were up. That is common in the move to change direction.
Then there’s Trump and China. China is holding any shipping of critical rare earth metals. Trump eliminating tariffs on computers, phones and chips…oh wait, that’s only until I get the itch to f with the world…
I am positive and bullish, but with very close stops and even day trading when I can. You do you. But damn, I’m geting too old for this crap.
Happy hunting, but let’s be careful out there,
Lakedog
PS:
I was supporting your statement. A LOT of comments are repeated by IBD on a spectrum of media they distribute. Justin Nielsen made this point also. Webby multiple times. Don’t remember if it was Webby or Justin, Webby I think, made the basic same comment and stated that Bill would have limited them to invest only 5%. Things just seem to popup and even change some. The message I’m starting to get is that it’s “Do as I say, not as I do” to a large extent. Which is fine, mold the approach to what fits you.
I think they think if you only bend the rules with small amounts, it is ok. Like going 28 in the 25 zone. Webby called it in spirit, but said they only took on a half position in QQQ and a half in SPY (on Swing Trader). I think that is out of 10 possible full positions. That puts it at 10%, within the current 0-20% range.
