Traders Corner   35 comments

S&P 500 Daily Momentum: Flat, trending bearish
S&P 500 Daily Overbought/oversold: Neutral
S&P 500 Weekly Momentum: Bearish
S&P 500 Weekly Overbought/oversold: Neutral, leaning overbought
S&P 500 Futures (June): Negative
Overall: Expect a bearish opening today. Whether that continues throughout the day is up in the air, although momentum would indicate it is probable.

The S&P 500 levels to watch today:

UPSIDE: 1867 (February’s high), 1882-1885 (3 data points and March’s high), 1892 (top of the Bollinger Bands), 1893 (2 data points), and 1897 (April 4th’s high and the all-time high).
LAST CLOSE: 1865 (20 day moving average).
DOWNSIDE: 1863 (April 4th’s low), 1849-1850 (January’s high and December’s high), 1839 (bottom of the Bollinger Bands), 1838 (50 day moving average), 1834 (March’s low), 1825 (100 day moving average), 1786 (150 day moving average), 1775 (October’s high), 1770 (January’s low), 1767 (December’s low), and 1755 (200 day moving average).


35 responses to “Traders Corner

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  1. Looks like the S&P is going to hit its 50 day ma. I wouldn’t go long yet.

  2. Bought my apr 11 SCTY calls at .25. Originally sold at 2.05 last week. Looking to buy May 62.50 calls for around 3

    • Nice trade Jeff. Trading the options around a core position is another strategy that works well in a flat or down market.
      Silver looks like it is forming a bottom and showing early signs of moving higher. A partial position for a trade is worth considering here.

      • Thanks Trader, I also got a little lucky and when Cramer mentioned SCTY on CNBC this am the shares spiked and I was able to re-sell calls at a far better premium. See my note below.

  3. I added SPXU at $57.08.

  4. Sold may17 65 calls for 3.2. Net-net I reduced my cost by an additional 2.95 per share and kept my strike price at 65. I think I done good?

    • Sorry, this was on my SCTY shares

    • Jeff, I’m in SCTY at 63.75, sold a CALL, apr 17th 60.00 at 5.60, that was Tuesday. Although I plan to let the call expire (if not called out), I’m interested in the how’s and why’s of rolling the calls (up and out?), I think that’s what you are doing(maybe?). It’s great being able to follow and learn with you guys.

      • Charles, you have several options. 1) let the position run until the expiration date. 2) buy back your options and then hold the stock if you think it will bounce. Either sell the stock or sell options again. 3) buy back your calls and sell April calls with a lower strike price. Buy back your calls and sell calls with a longer expiration date and a higher strike price. There is no absolute right answer. You have to run the numbers and make your decision on what you are the most comfortable with. It’s too early to tell if this is just a small pull back or the start of a larger correction. We are getting close to the 50 day ma. Have to see how things look there.

      • Trader, I’m leaning toward buying to close the apr 60. call. That would bring my basis to ~59.5. Then, I’ll sell to open a may 55.00 call. I think it works out that I can lower my basis to ~55.00 as I look at the screen, and still break even if called out. Does this look like it makes sense to do? I don’t necessarily want to own SCTY, but I don’t mind holding it with the lower basis of ~55.00.

      • Charles, there is nothing wrong with a structure that allows you to break even. If you are not interested in owning SCTY on a long term basis this makes sense. If SCTY continues to drop, you can always trade the options around your position with a chance to still have a profitable play.

      • Thank you. Did the buy/sell of the call, So my basis is now 54.2. In for that or get called out in May at 55.00 for +0.80

      • Charles, Trader knows this strategy far better than I. I’m just looking at the numbers and at this point trying to reduce risk and stock basis while continuing to hold the shares. In this falling market, if I see an opportunity to close a call and rebuy a slightly longer duration or slightly lower priced option with a much bigger premium then I’m trying to take advantage. I like the shorter term options just because they seem to give me more flexibility.

  5. TZA @ 16.73. I’ll hold if it doesn’t work today.

    • Now that’s risk. 3x small cap bear. Good luck Trader.

      • As a trader, I’m willing to take that risk. I need that kind of leverage to make day or swing trades worth while. I’m not interested in trading for a few pennies.

      • Should also mention option premiums are decent and weekly options are available. This helps to reduce the risk.

  6. What I love about covered calls is when the market is killing some of the stock you still like, you don’t just have to sit there and take it. CCs give you the opportunity to generate some income and reduce your share price as the market falls and hopefully still keep your shares.

  7. I sold SPXU at $57.40 and a 0.56% profit. Momentum shifted on the MACD (3 minute). I decided to take the money and run.

    • Ed, don’t forget to look at the 5 min chart before you pull the trigger. It still looks higher for now.

      • Trader, I did, and it was close. I just decided to go ahead and take the profit. When in doubt, “A bird in the hand is worth two in the bush.” 😉

  8. I just sold my CS position, as I want to be in more cash. I had a 9% gain and I had starting building position in November. Then I sold 1/2 my position in CALL. I lost a small amount (bought 20.27 and sold 20.11). Not buying anything this instant, though GNW has really dropped last couple of days.

    • Increased GTAT holding by 15% at 16.45. May look to sell calls if price starts to move back up.

      • I’m holding off on GTAT for now. Could see 15 again if the market decline continues. Probably doesn’t matter much if you have a long term time frame. I still like GTAT. Or, could buy it at its current price of 16.30 and sell April 15’s at 1.60. That would give you a 2% profit for two weeks if called or a 9.8% return on your purchase if not called. You would then own the stock at 14.70.

      • At this rate my apr 19 calls at 17 and 19 will expire. In fact, at this rate, my apr 19 calls at 16 may potentially expire. I’m ok with that, I like GTAT and am willing to hold all the shares. Not buying anything today however.

      • Yes trader and Jeff. I would advise the opposite rule regarding my trades right now. Trades for me in past 2 to 3 weeks have not worked very well. I am not worried, but it is a little frustrating.

      • There is no fundamental reason for this sell off. Economy continues to gradually improve, rates continue to be low. This is just the market doing what it does. I just need to be careful not to do my CCs at a price that might get exercised where I do not want to sell.

  9. With things looking so down I’m staying out. I’ve noticed when a daily chart turn down it doesn’t take much and traders sell there stocks. As over bought as we are may take few weeks to work this out. I’m watching 1842 so far we have kept above that.

  10. bought to close my apr 11 LNG 60 calls at .05. Immediately went out and sold new apr 11 calls at 52.5 for 1.12. Hoping these expire this week as well.

  11. Bit of a free fall for me. Last three days now down 7%. Am still up 3.7% on the year, but that is certainly in jeopardy the way things are dropping. I am nowhere close to raising the “bear” flag, but am thinking about actions should sell off continue.

  12. We’re close enough to the 50 day ma on the S&P to call it there. Now, we’ll have to see if we bounce. If we do, it will be important to see if there is any strength to the move or is it an opportunity to sell stock or write calls. The 100 day is around 18.25.

  13. I did sell KLIC as 12.14. Had a nice 7% gain and I do want to raise cash. If the market continues to improve today, I may take additional advantage and raise a little more cash.

  14. I saw an interesting stock today. GSVC. They are a venture capital firm that owns a chunk of companies that are either going public or have already gone public. They have sold off from $16 to just under $10. They claim their NAV is $14.91. Seems at least worth a kick of the tires. Agh one know anything about them?

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