Going Short on XLNX Ahead of Earnings
Texas Instruments comes out after close today. I'm playing XLNX puts since it will react based on commentary of Texas Instruments tonight. Small Put position. Good luck.
SMH
SHORT SMH - SemiConductors are a great short here. Inventories are high for all the companies, this should affect margins. Plus it's hitting its head on resistance right here. Should give some back in a day or two. SMH
THE WEEK AHEAD: ORCL, GDXJ, TBT, TLT, SMH, OIHEARNINGS
ORCL (50/29) releases earnings on Wednesday after market close, so look to put on a play in the waning hours of Wednesday's New York session.
Pictured here is a non-standard short strangle, with the short call side doubled up in order to compensate for greater than one dollar wide strikes: 1.30 credit, break evens at 48.70/58.15, and delta/theta of -5.52/58.15.
As of Friday close, the June 21st to July 19th monthly volatility contraction is from 46.6% to 29.3% or about 29.7%.
Look to manage intratrade by rolling the untested side toward current price on approaching worthless with a 50% max take profit target.
Generally, I don't play stuff this small that doesn't have dollar wides, since rolling intratrade can be a headache, as can rolling out, since there is limited strike availability. It's really another aspect of liquidity, which is not only about the width of markets intraexpiry, but also about the availability of expiries out in time, as well as strikes.
BROAD MARKET
EEM (27/20)
QQQ (23/20); NDX (24/20)
IWM (23/19); RUT (25/19)
SPY (21/15); SPX (19/15)
EFA (16/13)
With 33 days to go in the July cycle and 61 to go for August, we're kind of in the "in between" for the 45 days 'til expiry sweet spot, so I would wait until August comes closer into view for either broad market or sector if you want to keep things in that 45 days 'til expiry wheelhouse.
SECTOR EXCHANGE-TRADED FUNDS
Top 5 By Rank: GDXJ (62/31), TBT (52/24), TLT (51/12), SMH (50/31), OIH (49/40).
SINGLE NAME WITH EARNINGS IN THE REAR VIEW
A lot of earnings start kicking off in the July cycle, so would wait to play these as earnings announcement volatility contraction plays instead of wading in here and getting caught in a volatility expansion.
ME PERSONALLY
To keep things simple, mundane, and boring throughout the summer months, I'm looking to just to play broad market for the next couple of cycles -- SPY/SPX, QQQ/NDX, and IWM/RUT. (See, e.g., RUT Sept Iron Condor below).
triple top Monthlymake or break at this level. watching weekly and daily for entry either way, probability to the downside $SMH $XSD
$SMH Short 112.70 to 110, 109, 108. [5.65x Risk/reward]ATH is 114. I'm not expecting us to go there. AMD had it's run up already, SPX is looking slow (and like a Head and shoulder on the weekly). I'm better as a bearish trader which sucks in the kind of rally we've had from the bottom, but I've adapted by being more patient and precise with my entries and stop losses.
Short entry 112.70
Stoploss 113.15
Take profit:
Conservative 110
Target 109
Pushing it 108.
SMH Bounce Play Into Short$SMH ready to bounce at support before completing the last leg of this particular head and shoulders pattern. Also found RSI support. Still bearish semi's, so will go long now and short at 106.
OPENING: SMH JUNE 21ST 107/110/126/129 IRON CONDOR... for a 1.09/contract credit.
Another premium selling play, small, defined in the semicon exchange-traded fund with implied volatility at nearly twice that of the broad market ... . Collecting slightly greater than one-third the width of the wings. Will look to take profit at 50% max. The naked 110/126 short strangle in the June cycle is currently paying 2.78.
Metrics:
Max Profit: $109/contract
Max Loss/Buying Power Effect: $191
Break Evens: 108.91/127.09
Delta/Theta: -2.39/1.19
watching herecould pull back to 101 and still be bullish, but set up for short entry there $XSD $MU $AMD $NVDA $SOXX $SOXL
Chip Stock Island GapChip stocks look waaay overdone, yet I don't think it's over. If you look at just 2019, this gap looks like an exhaustion gap, but if you look at the semiconductor ETF (SMH), you can see that it looks more like an island gap.
Wait at least until SMH hits $106 before shorting chips. Also, chip stocks were strong last Feb/March.
Not sure if SMH is worth chasing at this point, NXPI reports AH tonight though, I have some calls for that.
Micron Technology Inc. (MU) Boosted by AMD + Demand ZoneHave not played MU or SMH traditionally, but it's been one of the steadier semi's going into late January, and has not been affected by NVDA's weak guidance update. Has been working through an ascending channel, and now appears to be breaking out of a bull flag, supported by a demand zone. Targets have been mapped, but expecting 40+, settling down once it reaches the 200dma (currently at 46.18). I'd set a stop around 37.50.
SMH Riding Ascending DTL into 200dmaI'm not trading this, but posting it as something to watch. We have a few weeks/months until other semi's report, so it could easily ride this line into the 200dma, though it will likely see some consolidation as it ascends into future supply zones. Risk/reward not here for me until it shows its hand a little more.
Semiconductor ETF (SMH) - Bubble During all technology bubble manias, the semiconductor industry is the first one to go up. As you can see from the above chart, during the dot.com bubble the semiconductor industry went all the way up, until its grand fall where it lost about 89% of its value.
As history repeats itself, in 2018, the semiconductor industry went all the way up and is now showing serious signs of collapse.
I use the Stochastic RSI indicator (Stoch RSI) for all my entry and exit positions when I trade the Direxion Daily Semicondct Bear 3X ETF (SOXS) which is an inverse ETF.
Safe trading.
JAN 19-30C'sanother option position on lower low playing the trend. always nice to buy on a green day for slight discount $XSD $SMH $QQQ AH helped
SMH - Bearish-neutral Iron Condor?Shake my head or nah? Taking advantage of bearish momentum and high volatility for a bearish-neutral bet.
75/76/103/104 JAN19 IRON CONDOR @ 0.21 CREDIT
General plan:
Roll if necessary & if possible to reduce risk.
Target maximum profit, unless significant profit appears early.
Comment or direct message for discussion, or on other interesting ideas!
Follow for updates.
Midterm #RetraceDirectional Bias: Short
Price Target: 7140-7160
Good Entry: 7000-7020
Risk/Reward: Max Risk of 30 points/Potential Reward of 100-130 points
If target is reached on the idea titled "Some NQ Loving", it would present a good opportunity for a little retrace. Given how weak AAPL is, a gap fill type move isn't out of the question.
SOXL start buying, save some money for 80s if they comeSome levels of interest. Caught this falling out of the diamond pattern.
Don't Underestimate the AMD Bounce Directional Bias: Long
Price Target: 22.5+
Good Entry: 19.5-20.3
Risk/Reward: Max Risk of 50 cents/Potential Reward of 2-3 dollars
A daily close below 19.3 invalidates the trade idea.
MU - Time to BounceDirectional Bias: Long
Price Target: 37-38
Good Entry: 34.3-35
Risk/Reward: Max Risk of $1 (trade idea invalidated below 34.3 15 min candle close)/ Potential Reward of $3+
Micron Tech does not look pretty$NVDA broke down last week. Here is also a chart of $MU. If its here or lower then first target is at $33 or 20% lower from here, but I wouldn't exclude a correction to $27 or -33% from here!
