My Current Portfolio and What I'm Looking at For Tomorrow
Hi everybody, this is John, welcome to the free video, and it's always interesting. I took a couple days off last week to go to Disney, and typically when I fly, the markets sell off, and that was definitely the case on Wednesday. So here we have today, Monday. Friday we rallied, Thursday we rallied, Wednesday we started off really weak. I think at one point, the Nasdaq went down like 55 points, and then kind of reversed into the close. So the question is what happens now?
Well, this is long squeeze has been fairly weak. So here is a squeeze, and you know, we've been essentially trading sideways with a little spike, and this may run out of momentum tomorrow. And then we do have kind of a quasi head and shoulders top here. So at this point, the jury is in, but it looks like we at least get a retest of the fire line there. So that's what I'm looking for.
So what is the best way to play it? Well, one way is just going along VIX futures. I like that. We've got, from here, just in terms of kind of a chart, there's no squeeze or anything setting up, but we are at kind of support level for the VIX. At this point, you know, if the market rallies, I wouldn't expect it to kind of collapse, because there's some nervousness in this market, and then on the other hand we could spike up here a little bit. The thing that's got me concerned about a lot of downside is the SKEW. I'll talk a little bit more about that in the premium video. The skew is not saying, it's not calling for a big move down. I'm looking for a modest move down.
And then the other trade I like a lot is gold. GLD. So, we've got some call options here in GLD, and I like call options on ETFs because generally, the implied volatility is pretty low, so you aren't having to worry about too much there. So this is one that we got eighteen days out, we got this last week at $3.87. It's been up a little bit, it's been down a little bit, and at the end of today, it's up a little bit again.
What I like about this trade is that we've got some interesting potential here. If this can break out, and take out those highs, we've got a nice move to the 1272 extension, which is $122.50. That's $4 away from where we are right now, and it's a very, very healthy move for a directional option that has very little in the way of premium decay.
And then for Google, this one's been a little trickier. This is one where we did a call credit spread that was at the money--well, you know, I say that, but I mean it's actually slammed into resistance and held pretty well. The nice thing about doing an in the money spread is that you can cut a hole through the stuff, and so, you know, today at one point this thing was at $730, right, and that was way through the strike, but I think this thing was at like $6.50. We didn't have to take a lot of heat on it. And now, suddenly there's the very real opportunity that this could go, you know, it could expire out of the money, which is great. So that's the kind of thing where this volatility can work fairly well.
And then another straight down negative play that we're looking at here is JP Morgan. I mean, the banking sector here is having a tough time, and on this one, we did a kind of a combination play, where we have a directional put as well as a call credit spread, 18 days out to give us a little bit more room.
So. I'm down on this trade. I made up for it a little bit today, but then tomorrow, if we can take out support, then this thing can keep on going. The biggest thing with this is that I'm expecting this kind of volatility for the rest of the year. I mean, this is a no holds barred street fight that's taking place in the markets here, and it's going to continue, and it's one of those things where if you're flexible, and you know how to kind of read the signs, it's going to provide a lot of great opportunities. So just be comfortable with this volatility. Don't get married to your positions, all right?
All right. One trade that I am looking at for tomorrow is, I've been watching Amazon here. In fact, let's switch this to a daily chart. And we've had a pretty fantastic bounce, but you can see we're starting to kinda tread water here a little bit. If this thing can take out that treeline, this thing could implode. So that's one of the things that I'm gonna be watching for, for Tuesday.
Okay, so we are going to be doing a free webinar. That's me. Go to SimplerOptions.com/Volatile, enter your name and email address here.
There is just a lot of volatility going on in the markets right now. It's been frustrating for a lot of people. But so far this year, this has been like the strongest start to a trading account in a couple of years. I anticipate this to continue and I'm going to be talking specifically the reasons why volatility can be your best friend, even for newbies with small accounts. Okay, it's kind of an unknown thing. A lot of times, people think, like, oh, the markets are too dangerous right now. They actually create a lot more opportunities, and you can actually set up your trades in such a way that you don't have a lot of risk.
Although, you guys know, I like to trade futures as well. But overnight, holding futures overnight in this environment can cause hair loss. So, why options are the best trading vehicle on the planet right now, why down markets are better than up markets, and by the way, if you've never really traded in a down market, it's not as simple as, "Oh, it's a down market. I'm going to reverse." No, because the retracements are a lot more violent. In an up market, you can hold through the retracements. In a down market, you don't want to. So how do you play that? The setup that has allowed me to make an extraordinary 4,000% percent gain on one trade last year. And by the way, that trade is setting up again, so we will be taking a look at that. And then how to make successful trades on your phone while at work, and I think that's great, because it offers the flexibility. Okay. So I'll be doing this tomorrow night. Free webinar, SimplerOptions.com/Volatile
Okay, you guys have a good one, and looking forward to seeing you tomorrow.