Trading Recap: Nov 27 — Dec 1
We approach the last month of 2023. A time to start reviewing what’s taken place, what’s worked, what hasn’t worked, and what I envision going forward. A focus on trading, but also . . . life. The two are intertwined.
2023 has been a weird year on many levels. Many blessings that I’m thankful for. So many. In many respects an amazing journey. Many new aha moments. Yet also extremely high on personal stress and distractions. Out of the blue revelations. Painful layers peeled back that reveal new things to absorb, to address in order to grow. That after many years of expansion, it is time to contract a bit. Like a squeeze. After it runs for about 8 bars, the underlying needs to rest and consolidate . . . or it will crash and burn.
And, a revelation . . . if I don’t hit the pause button myself, the universe will do it for me.
Instead of holding onto what we have, or who we think we are, with a white knuckle grip — examine our attachments, see what no longer serves, and let it go. Don’t cling out of obligation or validation. We are constantly evolving. What was so important five years ago doesn’t matter today.
Heads up, these are the kinds of things that creep up on me at year end, and my preference is to dive right in and face the music.
A client recently said to me, “Yeah, we sold everything, got liquid, and live in a 2 bedroom condo on the beach. We’ve never been happier.”
That resonated.
But that wasn’t Jenny’s take. Jenny is a therapist/life coach I’ve talked to off and on over the past few years. Extremely intuitive, compassionate . . . and takes absolutely no shit. I’ve avoided her the past 6 months but recently reengaged. She dove right in. “John, it’s always about stuff. More stuff, less stuff. It doesn’t matter. It starts with how you feel about yourself. And you are hardwired to put other’s needs above your own.”
Ok, I get it. I mean, that’s not necessarily a bad thing . . . except when it is. There is a fine line between being of service vs. putting your own life on hold so as not to inconvenience others? We spend the first part of our lives accumulating, and then at some point, is it time to start editing? If everything in your life vanished, and you could choose what to bring back in . . . what would you bring back? Things to ponder.
In trading, start every day with a clean slate. Learn from the past but don’t drag it forward with you like a lead weight. Same with life.
There are ghosts that sleep inside us. Little issues that were never addressed. Old griefs never put to rest. Suspicions, doubts, banished hopes, all lingering in the tissues. Taking the time to explore this always leads to positive insights.
But what a pain in the ass.
As I’ve said before, anyone can be a Buddhist living alone on top of a mountain. The real adventure is learning to be at peace in real life, no matter what is going down.
Let’s do this thang!
Monday, November 27, 2023.
Note — I’m going through my notes on Friday, Dec 1. This was a busy week of calls and webinar prep.
I’m grateful for: My kids. They keep it real. As adults, it is easy to get caught up in things that ultimately aren’t important.
I’m excited about: Diving more into Spot Gamma, family trip to the Cayman Islands. (We are going in 2 weeks).
Priorities: Spot Gamma webinar, workout, lots of end of year things to stay on top of, lots of calls. Knock it out.
After last week’s chop, can we get some volatility going? The SPX has been a snoozer, and I’ve been spending more time sifting through stock setups. With the VIX under 13, tradeable volatility ain’t in the indexes.
Super quiet day in the SPX. I bought some calls on SPX thinking we could test 4600. We didn’t move.
I also liked what I saw in TSLA, and we picked up some long calls in the options trading room. There was some nice consolidation and a great looking 30M squeeze setting up. In addition, Spot Gamma had Put Wall support at $230 and Call Wall resistance recently changed from $240 to $250. This typically opens up more room to the upside — especially when combined with a squeeze. We picked up in the money calls and call debit spreads for Friday expiration.
We ended up being in this trade until Wednesday. We took half off around $243 on Tuesday, and then on Wednesday, when the markets gapped up and TSLA opened right at $250 and teased $252, we didn’t hesitate and got right out. Easy to say in hindsight, but the Spot Gamma levels have really helped with key targets like this.
If the Spot Gamma tools are a new concept for you, we have recently partnered up with them and have a 50% off discount code for their service. I use the Alpha since it has all of these option flow levels.
This link takes you to a class that Henry, Brent and I are teaching on how to use it on December 9th, and if you scroll down, you’ll see a link to get the service at 50% off. It’s been a game changer.
Tuesday and Wednesday, Nov 28–29.
Tuesday was a meh day. Another quiet day where nothing much happened and we sat on TSLA calls and unsuccessfully tried a pin on the SPX close.
Wednesday the markets gapped up and looked to explode out of the gate — but we quickly got option flow signals on Spot Gamma and Quick Hits siganls that showed sellers were stepping in with force. I ended up buying some out of the money puts on SPX.
Below we can see the options flow plummeted at the open, and this coincided with Quick Hit sells signals that took place about 15 minutes into the open, right around H1.
While the QH signals are good by themselves — I’ve found I never have any idea if it is going to be a big reversal or just a pause before the trend continues. By watching the options flow, I could see that the possibility of a big reversal was very real, which is what prompted me to buy out of the money puts vs. selling an out of the money call credit spread.
This is also something I’ve found to be very important — watching the options flow on the “Big 7” tech stocks. They basically drive the market.
In the chart below, orange and green lines represent negative call flow (think hedgers and institutions dumping their long call options) and the two blue lines represent puts being bought. All negative for the underlying stocks.
Thursday, Nov 30th and Friday, Dec 1
On Thursday, I did get a 30M squeeze to the downside on COIN and I bought some Dec puts. The stock fell quickly, paused . . . and completely reversed. On the downside, have to be quick.
Thursday, I also exited a trade on TGT.
On Tuesday, my daughter asked if she could find a trade towards the end of the day. Easy trade for the kdis? Look for earnings that had upside surprises and greater than expected moves. These tend to keep grinding higher for 5 to 7 days after earnings.
We found TGT in that patten, and she put on a call debit spread with a 1 point target. This trade hit it’s target on Thursday.
Thursday, my day was packed. Calls, workouts, trading room. The market was super quiet as everyone waited for the end of the month. I bought some cheap out of the money puts for .35 cents in case we nose dived.
Then I saw that MOC was coming in at $6.5 BILLION, which is a huge number. I immediately bought in the money calls and was able to catch about 10 SPX points into the close, staying flat overnight.
Friday was more of a classic light gap and light run up into resistance. I had a scheduled endoscopy at 10am central and I was home by 11am central. I was a little groggy but not too bad — the setup was so clean I had to buy some calls.
Note — for my endoscopy, I’ve been having instances where food has been getting stuck in my throat and I’ve been experiencing acid reflux. I’ve learned what foods trigger it and avoid those, but I wanted to get it checked out. Definitely some erosion happening and the doctor is giving me a few things to heal everything so we can look again in 6 months.
Remembering that TSLA was rejected hard at its $250 call wall, I noted that the SPX call wall was at $4600. This was an obvious target — but also worth a short?
Not sure yet how the butterfly will turn out. Max loss is .50 cents for $5,000 on this account, and $500 on the smaller account. I’m going to try to just walk away and let it cash settle. That’s hard to do if it is trading for $2.00 and change as that can also disappear quickly.
Close but not quite. We did have a long iron condor in the room where the call side was 45775/4995 and that closed near max profit.
For the week of Dec 4–8, I’m planning to take it easy as I have a busy week getting ready for the spot gamma class and this is the time of year when I start to set up my updated trading plan for the next year.
