Closed (IRA): IWM August 5th 154 Short Put... for a .49 debit.
Comments: (Late Post). Opened for a 1.56 credit. (See Post Below). Closed it on Friday for .49; 1.07 ($107) profit.
IWM trade ideas
IWM and the Russell 2000, where's the bottom?Here's my take on IWM, the ETF that tracks the Russell2000. As you can see, I ultimately see IWM falling all the way to around $165. That's about 16% below where we are now and 12% below our lowest point of last week. I believe the market tailwinds produced by the earnings of market powerhouses Google, Apple, Microsoft, and Amazon will quickly subside and the headwinds of inflation will replace them.
My target is very near the 50% retracement point of the height of the last wave from the Covid crash bottom of about $95 to the all time high of $245. The 50% retracement point is the most common, but it can range anywhere from 33% to 66%, generally. You can also see that my target seeks to close the 8.15% gap that was created the weekend Biden was declared the winner of the 2020 Presidential election by all the major news outlets. I am not someone that normally puts as much stock into "gap filling" as others seem to do, but this is an exceptionally large gap where lots of money piled into the market. 8.15%! In hindsight, this was a powerful gap signifying that the bull trend was about to kick into high gear. IWM proceeded to go up 35% in the next 3 months. Seems so long ago!
I find it interesting that the gap coincided perfectly with the All Time High that was hit just prior to the covid crash in Feb/Mar 2020. Coincidence? Hmmm.....
Short at 174 - 176Incrementally adding to a short position here up to 176. Don't see this trend line from early June breaking. If it does I think the buck stops at 176. If you think funds are going long small caps in this environment, you shouldn't be in the market. Not financial advice.
IWM Weekly BULLISHIWM is right back to where it faced tops in 2018 and the 2020 crash, but this time it could be major support.
This current selloff has been a very orderly and perfect flag pattern on declining volume.
I think we're at major support and the green bullish arrow is what I am looking for
The market already faced a huge crash in 2020 because of Dr. Fauci and his moronic lockdowns. Are we going to plummet again? Not looking like it. The previous November 2021 top doesn't look much like a top on the weekly charts. I think we'll break out of this flag to the upside and be right back up to previous highs, maybe more
Closing: IWM August 19th 162/179 Short Strangle... for a 5.15 debit.
Comments: Rolled this and/or adjusted it a bunch of times (See Post Below), collecting a total of 5.60 in credits. Closing it out here for a small (.45/$45) profit while I can.
Opened (IRA): IWM September 16th 140 Short Put... for a 1.68 credit.
Comments: Targeting the <16 delta strike paying around 1% of the strike price in credit to emulate dollar cost averaging into the broad market. Going out to September here while I wait for another shorter duration weekly (September 2nd) to open up.
Rolling: IWM August 19th 183 Short Call to 179... for an .87 credit.
Comments: Delta balancing my short strangle back to delta/theta <1.0. Total credits collected of 5.60. Resulting delta/theta 7.90/14.39.
Opening (IRA): IWM August 26th 150 Short Put... for a 1.54 credit.
Comments: Replacing the shorter duration long delta I just stripped off, but at a lower strike and in longer duration.
Closed (IRA): IWM July 29th 155 Short Put... for a .58 debit.
Comments: Opened this for a 1.61 credit. (See Post Below). Closing out here at >50% max, 1.03 ($103) profit.
Not Cheap YetSome people say that things are getting cheap. I agree, they are in the process of getting cheap, but we're not quite there yet as far as historical bottoms go. The Russell isn't that cheap yet, still twice as expensive as in 2009. Unless a true miracle happens, it's hard to see any upside in this market as far as real wealth terms(as opposed to numerical price increase) in the near future. On the contrary, we have seen much further downsides in the past. We might see a reflexive bounce in the future and a bear market rally, though we are in a steep downward momentum.
Good luck and don't forget to hedge your bets!
Opening (IRA): IWM August 26th 150 Short Put... for a 1.49 credit.
Comments: Targeting the <16 strike paying around 1% of the strike price in credit in the expiry nearest 45 days. I added a rung in this expiry on Friday at the 155, so am just adding a smidge at a lower strike on weakness and uptick in implied volatility.
IWM: Week of July 11Same setup here as SPY, but IWM is slightly more true to its descending channel.
SPY has overhead resistance at 393, IWM's overhead resistance channel is at roughly 180.
If SPY breaks over 393, its likely IWM will probably follow.
Predicted trading range for this week is in the green box: 165 - 183.
This has seen slight bullish divergence from last week's range of 160 - 177.
IWM seems to be forming a short term wedge been June 17 and July 8th.
IWM is extremely playable within this channel and tends to maintain its mathematical range better than SPY. So the odds are that it will remain within this trading range next week, absent some type of catalyst that drives it parabolic to the upside or downside (which in this case could technically be CPI).
I am neither short nor long biased here, just playing the range.
Trade safe!
Let me know your questions/comments below!
Rolled (IRA): IWM July 22nd 169 Short Put to August 26th 155... for a .25 credit.
Comments: (Late Post). Didn't collect much credit here, but this is the highest strike rung of my short put ladder and would prefer rolling it out of harm's way/to a lower cost basis strike since the market's given me the opportunity here. Total credits collected of 4.79 (See Post Below) plus the .25 here for a total of 5.04.
Rolled: IWM August 19th 158 Short Put to 162... for a .65 credit.
Comments: (Late Post). Rolled up the short put side of my short strangle to delta balance. Total credits collected of 4.73.
Opening (IRA): IWM August 19th 156 Short Put... for a 1.64 credit.
Comments: Adding some long delta back in here after taking profit on some rungs earlier. Targeting the <16 delta strike paying around 1% of the strike price in credit.
Closed (IRA): IWM July 22nd 162 Short Put... for a .67 debit.
Comments: Opened for 1.65 (See Post Below); closing out here at >50% max for a .98 ($98) profit.
Short IWMLooking to sell the Russell, set up looks ready for a drop, watch price action on lower time frame before pulling the trigger. GDLK.
IWMQuestion is do we have an overthrow at play? If yes the IWM needs to get back into my channel and not reject here off the bottom channel TL.
A rejection would almost certainly equal $138 and invalidate the 5 wave intermediate structure.
Opening (IRA): IWM August 19th 150 Short Put... for a 1.57 credit.
Comments: Targeting the <16 delta short put paying around 1% in credit in the expiry nearest 45 days to emulate dollar cost averaging into the broad market.
Rolling: IWM August 19th 192 Short Call to 183... for a 1.27 credit.
Comments: Delta balancing my IWM short strangle a smidge ... . Total credits collected of 4.08. End-of-day delta/theta 4.86/11.98. Will look at managing any remaining setups that are "out of kilter" on Friday.
Rolling: IWM August 5th 158/187.5 to August 19th 158/192... for a .46 credit.
Comments: Locking in some realized gain and recentering risk/balancing delta. Total credits collected of 2.81. Delta/theta 2.69/10.46.
Opened (IRA): IWM August 5th 154 Short Put... for a 1.56 credit.
Comments: Adding back in some long delta here in IWM, targeting the <16 strike in the expiry nearest 45 days paying around 1% of the strike price in credit.
Closed: IWM July 29th 145 Short Put... for a .46 debit.
Comments: Opened for a 1.91 credit (See Post Below); out during Friday's session for .46. 1.45 ($145) profit.
