Note, this was a holiday week and I didn’t trade very much.
Monday, November 20, 2023
It’s a short trading week, with the markets closed on Thursday and open a half day on Friday.
Market continues to have an upward drift. Looking for the SPX to test 4550. Can we test 4600? This won’t last forever. If we rally into Friday I’m buying puts to hold into next week.
I’m grateful for: Life’s lessons. Sometimes it takes a while to get the message, but life keeps trying to show us until we get it or die. Oh, and once you get it, it moves on to the next lesson. The great cosmic joke. Embrace it with laughter.
I’m excited about: Spending time with my family this week in South Padre and Wimberley. It’s been balls to the wall for the past few months and it is time to hit the pause button.
Priorities: Follow your plan. In all parts of your life. Can you swing the club with a clear mind, or are you going to let the memory of the last 2 swings ruin this shot?
The markets started off quiet and caught a slow upward drift. My weekend position, a call debit spread on AVGO, opened strong and tested $990, pulled back to $980, then headed back up to $990. That was good enough for me. This was a trade in my smaller trading room account and we did this one together in the trading room. I didn’t have this one in my larger cash flow account. No good reason other than I just wanted to be flat in that account for the weekend.
Trading room account for the day.
I’ve been finding the Spot Gamma options strike and flow data to be super helpful in trading. Note, we are showcasing this tool in a free webinar this Wednesday, Nov 29, at 7pm central. https://www.simplertrading.com/hidden-levels
In my cash flow account, I liked the early action on NVDA and LRCX. On NVDA, there was a huge gamma strike at $500, which creates big resistance. That said, if it manages to push through, then it forces short covering. It made sense that could happen the day before earnings, so I bought calls.
I also liked the setup in LRCX and bought calls as well. For both of these, I did delta 70 in the money, for Friday’s expiration. My plan on these was for a day trade, which is why I didn’t go out to a further dated expiration.
So what happened? LRCX performed perfectly, while NVDA just couldn’t get through before my time to head to the gym. I cut it loose before going. Of course, while at the gym, it did exactly as I thought. This was a family gym outing in South Padre and I didn’t want to be distracted. I’m sensing a theme here. I have delegated nearly everything in my life so I could focus on trading. It is time to do the same with your trading.
LRCX had a beautiful hourly squeeze and drifted up into $720.
Why exit near $720? Was this an arbitrary exit? Was I getting nervous holding on?
This to me is an ideal way to enter and exit a trade. Entries are at the bottom. Scaling in. Then exiting as it goes your way. LRCX is thinly traded, so exiting 10 lots at a time vs. placing an exit order for everything everywhere all at once is preferred.
For NVDA, this chart was poised to break out and I basically “knew” (without being 100% sure of course) it was going to go. That said, this is the tough thing with day trades and going for smaller, shorter term gains. You basically have to either stay close to the action and exit into spikes or pukes (or fade spikes or pukes) or have auto OCO orders trailing up as the price moves in your favor (hard to do with options) or have an assistant, or just not day trade. In this case, going to the gym was more important so I closed out the trade.
Last but not least, my daughter wanted to make a trade as she has some ideas and projects coming up that need funding. We looked through 6 or 7 30M charts where she looked for a squeeze setting up. There was one on TSLA I hadn’t even noticed.
She sold half at the close and then held half overnight. The next day it ran up to about $243. She sold around $241 and called it a day. We posted this trading in the options room as well.
For Tuesday and Wednesday, I put on some call debit spreads on SPX to see if we could push up to 4580–4600. The markets just traded sideways and in retrospect putting on some at the money iron flies would have been perfect.
Trading was non existent the rest of the week with the markets closed on Thursday and anemic on Friday.
Overall I’m looking for market strength into January before we get any major selling.
This week’s wins: Took some time off to hang out with Maria and the kids and extended family.
How I’ll improve: A theme in my life for 2023 has been having too many irons in the fire and not enough help. My default is to push and be able to handle “more, more, more” by any means necessary. I’m starting to see how ridiculous that is. Less, less, less.