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SMH

OPENING: SMH JUNE 19TH 129/170 SHORT STRANGLE... for a 3.66 credit. Metrics: Max Profit: $366 Max Loss: Undefined Buying Power Effect: 14.95 Credit Received/BPE: 24.5% Delta/Theta: .44/3.97 Notes: Going out to the first expiry in which the at-the-money short straddle is paying greater than 10% of the stock price. Doing the basic delta under hedge drill on this one: delta under hedging at intervals to maintain net delta < theta, if possible, allowing theta to work its magic.
NASDAQ:SMH
by NaughtyPines
THE WEEK AHEAD: SQ EARNINGS; SMH, XOP, GDX, GDXJEARNINGS: SQ (77/59) announces Wednesday after market close and has the volatility metrics I'm looking for out an earnings-related volatility contraction play -- implied in the 70th percentile or greater over the past 52-weeks and 30-day at or greater than 50%. Pictured here is an SQ April 17th 72.5/100 short strangle camped out around the 20 delta paying 3.55 on a buying power effect of 8.37 (42.4%) and delta/theta metrics of .66/7.78. For those high on defined, consider the 65/70/95/100, paying 1.58 (46.2% credit received as a function of buying power effect). EXCHANGE-TRADED FUNDS ORDERED BY RANK/30-DAY IMPLIED AND SHOWING THE EXPIRY IN WHICH THE AT-THE-MONEY SHORT STRADDLE IS PAYING >10% OF STOCK PRICE: SMH (73/30), May XLE (63/23), July USO (51/37), April XBI (48/30), June XOP (45/37), May FXI (40/23), August GDX (40/29), May GDXJ (38/33), May EWZ (26/27), June I didn't get an opportunity to do a ton last week beyond take off a few setups in profit, so this is probably an opportunity to build up theta pile in stuff that I don't have plays in currently and to add to stuff via delta under hedge that has experienced an up tick in volatility over the past several days. BROAD-MARKET ORDERED BY RANK/30-DAY IMPLIED AND SHOWING THE EXPIRY IN WHICH THE AT-THE-MONEY SHORT STRADDLE IS PAYING >10% OF STOCK PRICE: QQQ (59/23), September SPY (43/17), November IWM (42/19), September EEM (37/19), September In spite of the expansion of volatility over the last several days, broad market isn't paying fabulously in shorter duration, so if you're going to play, look to start out small, add small over time, and take profit somewhat aggressively. FUTURES: /GC (70/15) /CL (51/36) /NG (47/39) /ZS (43/19) /ES (42/17) /SI (33/89) /ZW (24/24) /ZC (23/13) VIX/VIX DERIVATIVES: VIX finished the week at 17.08 with the March, April, and May /VX futures contracts trading at 17.05, 17.33, and 17.09 respectively. It's tough to divine what /VX futures traders' thought processes are here, but it looks like they may be focused on the exogenous event of the year -- the expiry around the general elections, where there is a huge term structure "hump" from September (currently trading at 17.75) to October (20.55), with the remainder of the preceding structure being fairly flat in the interim. There is a mere .70 differential between the March contract price and the September one which I regard as unusually flat, which doesn't make for good term structure trades. Naturally, at some point, the term structure may adjust to a more "standard look," but in the mean time, look to add short to VIX derivatives (VXX, UVXY) on pops to VIX > 20% via short call vertical or long put vertical with a break even at or above where the underlying is currently trading and shooting for one-third the width in credit (if a credit spread; don't pay more than 2/3rds the width if a debit spread).
S
by NaughtyPines
2
THE WEEK AHEAD: ROKU EARNINGS; USO, SMH, EWZ, GDXJEARNINGS: ROKU (64/83) announces earnings on the 13th (Thursday) after market close and looks to be the best play out of earnings announcements occurring next week from a volatility contraction standpoint. Pictured here is a fairly straightforward short strangle camped out around the 17 delta in the March cycle, paying 5.62 on buying power effect of around 12.50 (45% credit received/effect ratio) on margin. For those looking to define their risk, consider the 90/100/150/160 iron condor, paying 3.37 on buying power effect of 6.63 (50.8% credit received/effect ratio) or some iteration of that where you look to receive one-third the width of the widest wing in credit. There is some call side skew here which you may to consider accommodating via a ratio'd short strangle or a "double double."* EXCHANGE-TRADED FUNDS WITH EXPIRY IN WHICH AT-THE-MONEY SHORT STRADDLE IS PAYING GREATER THAN 10% OF STOCK PRICE: XLE (59/22), July FXI (54/24), August SMH (51/27), May USO (48/39), April XOP (45/36), June EWW (43/19), September EWZ (33/27), May GDXJ (15/27), May GDX (10/24), June My general tendency here has been to go with the shortest duration that's paying first (assuming that I'm not already in a play), and then consider longer-dated thereafter. Here, the shortest duration that's paying is in USO (April), followed by SMH, EWZ, and GDXJ (May), and then XOP and GDX (June). BROAD MARKET FUNDS WITH EXPIRY IN WHICH THE AT-THE-MONEY SHORT STRADDLE IS PAYING GREATER THAN 10% OF STOCK PRICE: EFA (45/13), December EEM (42/20), September QQQ (37/19), September IWM (34/18), September SPY (30/15), November I've been working SPY longer-dated for quite some time now just to have something on in a constant state of theta burn where shorter duration isn't paying. Just for comparison's sake, the EEM September 37/49 is paying 1.14 on a buying power effect of 4.35 (26.2%); the QQQ September 195/257, 5.77 on a buying power effect of 22.94 (25.2%); and the IWM September 142/183, 3.78 on a buying power effect of 16.50 (22.9%) versus the SPY November 280/367, 8.23 on a buying power effect of 33.24 (24.8%). FUTURES (EXCLUDING CURRENCY/TREASURIES): /CL (52/40) /ES (51/16) /NG (30/39) /SI (30/18) /ZC (29/18) /GC (24/11) /ZS (15/18) /ZW (8/37) VIX/VIX DERIVATIVES: VIX finished the week at 15.47, with the February, March, and April /VX contracts going for 16.07, 16.27, and 16.70, respectively. The term structure has lost a good deal of the steepness we were enjoying just a few weeks ago when M1-2 contango was at a whopping 19.16% and M4-7 at 6.24% (it's currently 1.25 and 3.45%, respectively) and my tendency would be to probably wait until the February contract drops off to see if a term structure trade is in the offing. They're not exactly paying me huge to go, for example, with an April setup over a March one, with the differential being a scant .43. * -- E.g., the 2x90/2x95/155/165 iron condor paying 2.91.
NASDAQ:ROKU
by NaughtyPines
Semiconductors & Hashing-Rate Correlation StudyThere are long periods of positive correlation between average bitcoin hashingrate in gigahashes/second and performance of major semiconductor ETFs like SOXX and SMH As hashing and computing power in general shows massive increases in demand there are only a few companies that have the materials and knowledge to produce 'rocks that think' aka processors and other computing components made of earth metals and silicone. When I see big printing bars in hashing power but 'divergence' in correlation I may consider adding to semiconductor positions via options on semiconductor ETFs and computing component companies like INTC, AMD, NVDA, and the like as it means someone went out and made a huge investment in processing power in order to make a 'blip' on the hashing map but the ETFs are reflecting a downside move. This divergence between correlation of hashing rate and semiconductors displays a market inefficiency in the expectation for demand of semiconductors and actual demand for semiconductors. This divergence is an opportunity for us to capture in my estimation. I hope this makes sense and helps your own analysis Good luck have fun Much Love xoxo snoop
HLong
by 420snoop
5
MU strong stock trend in stronger On a yearly performance, MU did better than 77% of other electronic components stocks. Now it is currently trading near its 52 weeks high so it is performing in line with the broader markets. On a mid-term based daily chart, we could see a strong wedge uptrend pattern with momentum, and a few minor pullbacks occurred due to some broader geopolitical impacts such as the trade war and global 5G development uncertainty. But the stock is kept showing higher lows signaling the investors' passion for it. MU is about to consolidate at the 56.8 support level which is lying underneath the price as the chart indicated above. Since the ATR volatility risk has not packed in too much yet at the current high, DMI overall trend indicator is still heading up and bull-side trend strength is still controlling the directional momentum, I would go long with it. My target is simply at the prior all-time high resistant area which is indicated by the red band above the stock price roughly at 60, any pullbacks that break below its bollinger bands middle band could be seen as a stop-loss trigger. Besides, on the order flow side, there were over 2.9 million valued long calls detected from the options chain today with a strike at 60, expire in March.
NASDAQ:MULong
by Khabilan
AMD "in lisa su we trust" lolSemiconductors rallied after news the U.S. will remove currency manipulator tag from China. Trade tension between the U.S. and China has been easing which likely to give another boost in the chips industry. Among those 137 stocks, AMD outperforms 97% of them. Currently, it is trading near its 52 weeks high and however S&P is also trading near new highs, which makes AMD's performance in line with the market. AMD is currently showing a bull flag pattern. There was a flag pole right left to its first bar as the chart shown, after a consolidation AMD appears to have broken out from the first bull flag pattern. And now it seems has been shaping another bull flag pattern with a consolidation range which is indicated above(support roughly at 47.6 and resistance roughly at 49.1). The outside range indicated by red lines were the expected move that options market priced in for this week, means we are supposed to be inside of this range with 3.05 higher or 3.05 lower of AMD and it should stay in this range about 68% probability of the time for this week. ATR indicator is about to trend downside means the risk of the stock starts to be compressed and consolidation may need. So I think the stock will come back to test the upper edge which is the breakout area roughly at 49.1with a few sessions moving forward then once the momentum been fueled it will break out to show another bullish trending to upside. Besides, the overall trend indicator DMI is heading upward as the long trend strength(blue line) is still dominating the directional momentum. And today there were 174.42K, 186.93K, 136.71K with strikes of 49.5, 48, 55 long calls bets set on Jan, Feb 14th and Mar respectively which also is signaling the quite bullish view from the investors. So I will consider buying a pullback until the price edging close to the lower edge of the orange line as a second entry and target a 55 stop gain for this setup.
NASDAQ:AMDLong
by Khabilan
4
SMH Short Thesis The Next MonthI'm not currently short the semis but upon doing some research I found a nice setup thesis. Similar weekly candles. I see the previous time SMH found it's low about 15.7% down from that weekly candle close after 29 days. If you use the same 15% calculation after 28/29 days, it brings you to the 23% fibonacci level at $120. This is only a theory at this point and I'll continue to do some digging on it. But it looks ripe for a give back leading up to earnings or after earnings. I'm going to look for a put spread entry on Monday. Good luck - and as always, don't trade based on my opinions or hypotheses. SMH
NASDAQ:SMHShort
by StockPickingEnthusiast
SMH - Short-term BearishTRADING ACTIVE Chart Details SMH had sell signal on Daily yesterday. I entered trade but did not post. Waited for trend dots to confirm. Trend dots confirmed bearish trend very end of day. Gaps to fill below down to $111. Weekly RSI trend is about to breakdown. Daily trend dots confirmed bearish trend. I will post a Weekly view chart for SMH when trend confirms Bearish weekly view. Entry Options I am entered in the Jan 17. Expiry, 140/145 Call Credit Spread (Bearish bias). $2.48 Credit received. This trade assumes both 140 & 145 Calls will expire worthless with SMH below $140 by Jan 17. Total credit is kept as profit. Max gain and max loss both approximately $250. Average POP around 65%. Not the best. About Me Thank you for liking, commenting, throwing up a chart, following, or viewing. I am not a financial advisor. My comments and reviews are based on what I do with my personal accounts. I am transitioning to my new website www.moneypatterns.com. Same guy - new name. :) Website will be ready for launch mid-January 2020. Thank you for your patience while I try to juggle everything and maintain the same standards. Disclosure - I am long BTCUSD, GBTC. Short term - GDX Bullish, SPXS Bullish, SMH Bearish
NASDAQ:SMHShort
by MoneyPatterns
$AAPL ... (BEARISH!)AAPL has just continued to push higher for weeks now, but it's starting to look like things might be turning with the false breakout to all time highs from Friday being rejected today (still have to wait and see how we close). $AAPL is still a top shorting op for us, along with SMH. With that said, we don't expect to see major moves (up or down) before the FOMC meeting on Wednesday. Any development before then needs to be taken as a starter position or day trade.
NASDAQ:AAPLShort
by PartTimeGenius
2
SMH - 4Day Semi Outter Space View - Semi's Show WeeknessSemi Outter Space View (Get it...semi :) LOL Not Ready Yet - I'm waiting for $140+ to buy Puts - Update coming at SMH $140 SMH Semiconductor ETF is referred to as a leading indicator at times as it shows slowing of high growth tech aspects of the economy. The SMH ETF has companies which make chips for AAPL, and AAPL is a component of SPY. So these tickers are connected in this way. Can you see the repeating pattern? I see we have ascending wedge, followed by breakdown correction. Then steady increase into flat bottom wedge, breakout into another ascending wedge. Ascending wedge breakdown (small white one), into final blue ascending wedge. We are currently at end of pattern. Middle of January 2020 there is no more room. To me this implies we are going to see a correction by then or before. We have a "good pattern" for all wedges in chart. Rising Wedge - "Breaks downward 60% of time. Price should touch (at a minor high or minor low) each trendline at least five times to outline a good pattern. That's 3 touches of one trendline and 2 of the opposite." thepatternsite.com If we were in a downtrend, with ascending wedge, it could be a bullish reversal. In an uptrend, an ascending wedge is like an airplane stalling. No more lift going straight up equals falling outta the air. I do not have any active position in SMH. Thank you for liking, commenting, throwing up a chart, following, or viewing. I am not a financial advisor. My comments and reviews are based on what I do with my personal accounts. Disclosure - I am long MARA, GBTC, BTCUSD, GDX, VIXY. Short SPY and AAPL.
SShort
by MoneyPatterns
THE WEEK AHEAD: ANF, BBY EARNINGS; XOP, EWZ, GDX, SMHIt's a short market week here, but this is what we've got ... . EARNINGS: HPE (43/33): Announces Monday after market close. ANF (85/80): Announces Tuesday before market open. BBY (70/42): Announces Tuesday before market open. HPQ (50/36): Announces Tuesday after market close DE (34/29): Announces Wednesday before market open. Of these, ANF and BBY appear most appealing from a volatility contract standpoint. The setup pictured here is an ANF 16 short straddle in the December 20th month, paying 2.87 (.72 at 25% max) versus 15.93 spot (18.0%), with the defined risk 11/16/16/21 iron fly paying 2.60 with a buying power effect of 2.40 (.65 at 25% max). The BBY December 20th 65/80 short strangle is paying 1.75 (.88 at 50% max), with the correspondent 60/65/80/85 iron condor in the same cycle paying 1.60 (.80 at 50% max). EXCHANGE-TRADED FUNDS: TLT (36/12) SLV (29/20) GLD (23/11) USO (21/33) XLE (19/20) As with last week, short duration premium selling remains less than ideal here, so either hand sit, keeping powder dry, or look to deploy in longer duration setups. Here's what's on my list for longer duration setups in which at background implied volatility is higher: XOP: January, where the at-the-money short straddle is paying 2.20 versus 21.05 spot (10.5%) EWZ: March, where the at-the-money short straddle is paying 5.12 versus 43.16 spot (11.9%) GDX: March, where the at-the-money short straddle is paying 3.14 versus 26.76 spot (11.7%) SMH: May, where the at-the-money short straddle is paying 17.95 versus 130.92 spot (13.7%) BROAD MARKET: SPY 10/13 IWM (7/16) QQQ (7/16) As with the exchange-traded funds, you're looking at either hand sitting on shorter duration setups or going out farther in time to get paid, with the expiries in which the at-the-money short straddle is paying greater than 10% in September for SPY and June for both IWM and QQQ (ugh). FUTURES: /6B (67/12) /NG (41/60) /6C (30/5) /SI (29/18) /GC (23/11) Cable I get, but what's with the Loonie? VIX/VIX DERIVATIVES: With the January, February, and March contracts trading at 16.68, 17.76, and 18.05 respectively as of Friday close, VIX term structure trades in those expiries remain viable. For all other short volatility trades, I'd wait for a VIX pop above 20 to consider starting to add short position, as well as consider taking off some risk if we see another drop back into the 2019 lows at 12. It finished Friday at 12.34 ... .
NYSE:ANF
by NaughtyPines
SMH - Ready to Fail - Waiting for Short EntrySMH is following the trend with SPY, GOOGL, and AAPL. All are topped out, 70 RSI or higher, highly correlated, and susceptible to trade news. AAPL, GOOGL, and SMH all have plenty of gaps to fill below. I do not think some of the lower ones get filled. However, most gaps do get filled eventually given time. In my opinion, we are just waiting for a catalyst for knock all these stocks down. SPY is highly composed of AAPL and GOOGL. SMH normally acts as a leading indictor, but SPY is more inflated than SMH. This leads me to believe that we are on schedule for a pullback by December 1st or before. I am waiting for a short position to enter. I will be using a standard Put. About $250 or less risk, for $1400 reward if we pullback to $120 for SMH. Once we get closer I will update chart. Please do your own research and evaluate your own risk. Thank you for liking, commenting, throwing up a chart, following, or viewing. I am not a financial advisor. My comments and reviews are based on what I do with my personal accounts. Disclosure - I am long MARA, GBTC, BTCUSD, GDX, VIXY. Short SPY and AAPL.
SShort
by MoneyPatterns
SMH - To Go Short or Go Long? You DecideI'd like everyone's input. Kind of like a forum if we could. Explain what your seeing from your perspectives and back it up with technical info, etc. I'm currently short the SMH with some 11/22 $129 puts, but I'm considering only holding half of them through $NVDA earnings tonight. I personally don't think they'll outperform...especially since they've had an incredible run in the past month. This is why I'm leaning bearish on SMH and the market as a whole. GLTA. What's your perspective?
S
by StockPickingEnthusiast
SMH - Shaking my head?The primary pattern is definitely bullish going back to the December lows. Since the selloff in May, each pullback in the SMH does not reach the support trendline. Unfortunately, prices have created a new high creating a bearish divergence with the RSI indicator. The dashed purple line shows an intermediate trendline since the price has found strength on the pullbacks. A break of this intermediate line around $120 could lead to additional weakness bringing the price back to the primary trendline around $113. Semiconductors have been the second strongest tech industry YTD behind only Hardware but they have been slipping over the last six months. Performance weakness may continue.
SShort
by Chartimistic