DailyPlay

Taking Profits (GLD) – March 27th, 2020

on 26 March 2020in DailyPlay

DailyPlay Positions Outlook:

Despite markets rallying strongly off of the $218 lows, we continue to believe there is further downside. While the unprecedented fiscal and monetary policy provides much-needed liquidity and suppressing violent swings, it does not cure the virus or the global economic devastation to come. Moreover, printing over 4 trillion dollars does not come without its costs. While we maintain our bearish view in the markets, we acknowledge that markets may trade higher temporarily on the back of some much needed good news. 

Taking Profits

• GLD – 132% Gain: Long Mar 27, 2020/Jun 19, 2020 142/152 Call Diagonals @ $13.76

 

Tony & Mike on OptionsPlay

Market Overview Recording  – Watch the Recording

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Closing Trades (MU) – March 26th, 2020

on 25 March 2020in DailyPlay

DailyPlay Positions Outlook:

Despite markets rallying strongly off of the $218 lows, we continue to believe there is further downside. While the unprecedented fiscal and monetary policy provides much-needed liquidity and suppressing violent swings, it does not cure the virus or the global economic devastation to come. Moreover, printing over 4 trillion dollars does not come without its costs. While we maintain our bearish view in the markets, we acknowledge that markets may trade higher temporarily on the back of some much needed good news. 

Market Outlook Session with Tony Zhang & Michael Khouw

Closing Trades

• MU – 53% Loss: Long May 15, 2020 25/37.5 Put Verticals @ $2.23

Tony Zhang & Michael Khouw on OptionsPlay

Market Overview – Thursday March 26th @ 4:15 PM EST

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DailyPlay Update – March 25th, 2020

on 24 March 2020in DailyPlay

S&P 500 Market Outlook: Neutral

Market Overview: Markets jumped 8.5% today after the Federal Reserve stepped up with unlimited QE to provide liquidity and backstop the fixed income markets. Equities rallied but VIX actually ended the day higher at 61.7, pointing to continued uncertainty. Italian COVID-19 trends improved for a second day, providing a template for US and European trends to follow. Liquidity improved slightly with 55 “liquid” optionable symbols, up from just 35 on Friday. However, despite today’s strong rally, we continue to see downside risks as monetary policy cannot fix overwhelmed hospitals, millions of lost jobs and the containment of COVID-19. The worse is unfortunately yet to come and we anticipate further pain as states enter lockdown periods. 

DailyPlay Update: We maintain holding our positions in AAPL, AMD, MU, SPY hedge and GLD long until we can establish that the market has bottomed. 

Submit Your Questions for Michael Khouw & Tony Zhang below!

Market Outlook with Tony Zhang & Michael Khouw

Thursday March 26th @ 4:15PM EST – Submit Your Questions

Trade Adjustment (GLD) – March 24th, 2020

on 23 March 2020in DailyPlay

Gold ETF (GLD) Trade Adjustment

After the March $150 Calls expired worthless on our Call Diagonal, we suggest turning the remaining June $142 Call into another diagonal by selling a March $152 Call @ $1.12. This would reduce the total risk of the trade to just $5.94 per contract, less than 4% of the underlying ETF price. GLD has already moved higher after our trade and may have limited gains this week. We will continue to sell calls against our June calls if GLD ends the week below $152. 

Adjusting Trade

• GLD – 82% Unrealized Gain: Sell to Open March 27 $152 Call @ $1.12

Upcoming Event:

Market Outlook with Tony Zhang & Michael Khouw @ Thursday March 26th 4:15 PM EST – Submit Your Questions

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Coronavirus Update: Weekly Market Prep – March 23rd, 2020

on 22 March 2020in DailyPlay
Weekly Market Prep - March 23rd, 2020

Coronavirus Update: Weekly Market Prep 

Market Update:
With cases across the world exploding, the market ended last week with fresh multi-year lows and breaking below the support level at $235. We expect markets to continue towards $213 and $200 to the downside as governments continue to try and contain the spread of COVID-19. The VIX pared lower to 66, suggesting market volatility expectations calmed slightly. 10 year Treasury yields dipped below 0.90% after rallying as high as 1.25% mid-week. As cases continue to grow exponentially we see further downside on the markets and continue to position for shorts in the current environment. 

How to position in this market:
We are not adding to our DailyPlay positions today for the reasons that we laid out during our Friday morning session. We suggest continuing holding onto the SPY hedging trade to deploy portfolio hedging best practices. Our research points to using ETFs over single stocks during these highly volatile and illiquid market conditions. We are only short stocks that pass our stringent liquidity scans such as AAPL, and MU. We are updating our research this week to provide macro insights into the economic impact, please join us on Tues morning for our market research. 

Tuesday Market Outlook:

Join us Tuesday Morning at 9 AM EST for a market outlook session with Tony Zhang. Join Us

Apple (AAPL) Further Downside Expected – March 20th, 2020

on 19 March 2020in DailyPlay
Apple (AAPL) Further Downside Expected - March 20th, 2020

S&P 500 Market Outlook: Bearish

Bearish Trade: AAPL $244.78 – Technology

OptionsPlay’s bearish trade for Friday, March 20th is Apple (AAPL). AAPL is part of the Technology Sector (XLK). XLK has declined 27.18% lower over the past month and its 1m and 6m trend turned bearish on March 9th and is just bounced lower off its $78 resistance level. 

Learn about Buying Vertical Spreads

Apple’s 1m and 6m trend turned bearish on March 12th and recently broke below its $250 support level. With a technical score of 10 (out of 10), AAPL is a strong stock that is starting to turn lower. 

As a stop loss, if AAPL were to trade above $250 for multiple days, this would invalidate our analysis and suggest cutting losses on the trade. We also recommend cutting losses on this options trade if the value of the vertical spread declines below $10.00.

View AAPL Trade

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Taking Profits (MCD) – March 19th, 2020

on 18 March 2020in DailyPlay

DailyPlay Positions Outlook:

The market swung wildly today, testing new lows and rallying near the close as the Senate passes a bill to combat this pandemic. As the market continues to try to find its footing, today’s close above the major $234 support level provides some relief for long positions and maintains a line in the sand. 

New Special Market Outlook Session at 9AM Friday Morning!

Closing Trades

• MCD – 275% Gain: Long Apr 17 180/200 Put Verticals @ $21.40

Fri Market Outlook

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Micron (MU) Semiconductor Meltdown – March 18th, 2020

on 17 March 2020in DailyPlay
Micron (MU) Semiconductor Meltdown - March 18th, 2020

S&P 500 Market Outlook: Bearish

Bearish Trade: MU $37.38 – Semiconductor

OptionsPlay’s bearish trade for Wednesday, March 18th is Micron (MU). MU is part of the Semiconductor Sector (SOX). SOX has declined 27.25% lower over the past month and its 1m and 6m trend turned bearish on March 6th and is just bounced lower off its $193 resistance level. 

Learn about Buying Vertical Spreads

Micron’s 1m and 6m trend turned bearish on March 9th and recently broke below its $45 support level. With a technical score of 5 (out of 10), MU is a neutral stock that is starting to turn lower. 

As a stop loss, if MU were to trade above $45 for multiple days, this would invalidate our analysis and suggest cutting losses on the trade. We also recommend cutting losses on this options trade if the value of the vertical spread declines below $2.12.

View MU Trade

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Taking Profits (BABA) – March 17th, 2020

on 16 March 2020in DailyPlay

DailyPlay Positions Outlook:

As the country shuts down to contain the coronavirus, the market has closed at new lows and VIX near 2008 financial crisis levels. As the market and country enter panic mode, we remind investors to remain calm and seek opportunities when others are fearful. 

New Special Market Outlook Session at 9AM Tues Morning!

Closing Trades

• BABA – 80% Gain: Long Apr 24 170/200 Put Verticals @ $15.90

New Tues Market Session

Market Overview & Ideas Tues March 17th @ 9:00 AM EST Register Now

Gold ETF (GLD) – Gold Reclaims Safe Haven – March 16th, 2020

on 15 March 2020in DailyPlay
Gold ETF (GLD) - Gold Reclaims Safe Haven - March 16th, 2020

Bullish – GLD $143.28 – Gold Bullion

Catch OptionsPlay’s Chief Strategist, Tony Zhang on CNBC, Options Action every Friday at 5:30 PM EST!

Market Outlook:
The S&P 500 (SPY) ended the week on a strong Friday afternoon rally after one of the worse weeks since 1987. With an emergency rate cut on Sunday, futures have sold off heavily, suggesting the limited effects of monetary policy. As local governments scramble to shut down cities to contain the virus, investors continue to struggle with evaluating the expanse of the downturn. We expect this next week to bring more volatility and clarity to the end of this quarter. 

GLD Trade Idea:
On CNBC’s OptionsAction show on Friday, Carter Worth suggested that the decline in Gold was a temporary pullback in a larger bullish wave. GLD declined despite safe haven demand during a selloff due to liquidity issues. Expecting GLD to rally, Tony suggests buying a Mar/June 142/150 Call Diagonal @ $6.65 Debit. As of Friday’s close, these calls were trading at $7.06 Debit.

We’ve structured this trade in OptionsPlay so you can analyze and view this trade along with the supporting technical chart at your convenience. You can also view the Options Action’s video by clicking on the following link: GLD OptionsAction Video

View GLD Trade

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