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Morning Investing Strategy Notes for Tue May 3 2022

May 3, 2022 | Investing Strategy Notes, Latest, Trade Alerts and Ideas

Morning Investing Strategy Notes

The Outlook

The market should continue the late afternoon rally from Monday. There will still be dips and they could be deeper than expected but the day will end higher.

Million Dollar Challenge Portfolio – Potential Trade

This portfolio is still on hold but we may see Apple Stock jump on Tuesday. I am looking at perhaps selling the $150 or $145 put strike for May 13 expiry depending on what prices are like and if the stock does jump.


SPY Options For The Market Direction Portfolio

On Monday I bought SPY puts at the start of the day but as the market rallied off a new low, I sold out of the remaining puts.

On Tuesday if the index starts to move higher in the first 5 or 10 minutes I plan to buy the SPY ETF $420 or $422 call strike for May 13 expiry.


PayPal Decline Repair Example

I put together a Trade Ahead Of Earnings Strategy setup on Wednesday in the stock. I will be using profits from that trade to help reduce the cost of the repair and move lower the two highest short puts by May 20 expiry or until the Trade Ahead Of Earnings Strategy trade ends.

On Monday I put together this trade


Tomorrow’s Trade Portfolio on hold

With the market decline the Tomorrow’s Trade Portfolio is on hold but should resume on Wednesday.

Retiring Easy Portfolio Update

I entered a new Retiring Easy Portfolio trade on Monday in Microsoft Stock.


Revisiting History

Historically the month of May is known as the first of the worst 6 months of the year for stocks. In midterm election years May does poorly.


Ultra ETF Trades

TQQQ ProShares UltraPro 3X Bull NASDAQ 100 (TQQQ)

There were no trades in the TQQQ on Monday.

On Tuesday I will be buying 200 shares of TQQQ in the first 10 minutes unless the NASDAQ moves lower. If it does move lower I will be watching for dips to $37 or lower, for entry points.

SQQQ ProShares UltraPro 3X Short NASDAQ 100 (SQQQ)

No trades were entered and none are planned for today.

SDOW ETF – 3X Short Dow Jones Index

No trades were entered and none are planned for today.

UDOW ETF – 3X Bull Dow Jones Index

There are no trades planned for today.


MACD – Confirmed Down Signal – Apr 11 2022

On Monday April 11 we got a confirmed down signal. The outlook is still lower. The dip on Monday to 4062 may be the low for the week or at least the next couple of days.


VIX Index Strategy

I started the day with 3 remaining calls for May 18 expiry at the $25 call strike.

I sold 2 at 2:51 for $8.60 and 1 for $7.81 at 3:12 as the market was rallying.

I won’t be buying calls on Tuesday as I want to wait for the VIX to fall back to at least $29 or $28 before considering buy calls again.


Close Trades Early

Just another reminder it is important to make sure to use spikes and rallies to close positions to lock in profits and raise cash levels for further trades. The past several weeks has shown the value of closing trades early and getting capital into new trades as the market falls lower. Closing early is pivotal to not getting caught holding deep in-the-money short puts as a stock falls, simply because the investor forgot to place an offer to close and failed to leave it open.

In rallies, make sure to close trades that are at risk or which you are nervous about.

You can also consider using this excel spreadsheet to assist in alerting when to close trades early.

Don’t Abuse Margin

Just another reminder to watch overuse of margin, especially in a downturn.


Super Charge Buy-Write Strategy

There are no trades being done today using the Super Charge Buy-Write Strategy.

For investors unaware of this strategy this article outlines the Super Charge Buy-Write Strategy and is a good starting place to understand this strategy.


Trade Ahead Of Earnings Strategy

These are the trades planned for today using the Trade Ahead Of Earnings Strategy.  There are a lot of stocks announcing earnings today and tomorrow. 

This is an excellent strategy for bear markets as returns can be beyond expectations when a stock falls.

Advanced Micro Devices Stock (AMD) releases their earnings on Tue May 3 2022 after markets close. I am using $10.00 debit spreads with the reverse iron condor method for Jun 17 expiry.  A setup example based on Monday’s close would be buying the $90 put strike and selling the $80 put strike. Buying the $90 call strike and selling the $95 call strike.

AIRBNB Stock (ABNB) releases their earnings on Tue May 3 2022 after markets close. I am using $10.00 debit spreads with the reverse iron condor method for Jun 17 expiry.  A setup example based on Monday’s close would be buying the $150 put strike and selling the $140 put strike. Buying the $155 call strike and selling the $165 call strike.

Caesars Stock (CZR) releases their earnings on Tue May 3 2022 after markets close. I am using $10.00 debit spreads with the reverse iron condor method for Jun 17 expiry.  A setup example based on Monday’s close would be buying the $65 put strike and selling the $55 put strike. Buying the $70 call strike and selling the $80 call strike.

LYFT Stock (LYFT) releases their earnings on Tue May 3 2022 after markets close. I am using $5.00 debit spreads with the reverse iron condor method for Jun 17 expiry.  A setup example based on Monday’s close would be buying the $30 put strike and selling the $25 put strike. Buying the $32.50 call strike and selling the $37.50 call strike.

Prudential Financial Stock (PRU) releases their earnings on Tue May 3 2022 after markets close. I am using $10.00 debit spreads with the reverse iron condor method for Jun 17 expiry.  A setup example based on Monday’s close would be buying the $105 put strike and selling the $95 put strike. Buying the $110 call strike and selling the $120 call strike.

Starbucks Stock (SBUX) releases their earnings on Tue May 3 2022 after markets close. I am using $5.00 debit spreads with the reverse iron condor method for Jun 17 expiry.  A setup example based on Monday’s close would be buying the $75 put strike and selling the $70 put strike. Buying the $75 call strike and selling the $80 call strike.

CVS Health Corp Stock (CVS) releases their earnings on Wed May 4 2022 before markets open. I am using $10.00 debit spreads with the reverse iron condor method for Jun 17 expiry.  A setup example based on Monday’s close would be buying the $95 put strike and selling the $85 put strike. Buying the $95 call strike and selling the $105 call strike.

Moderna Stock (MRNA) releases their earnings on Wed May 4 2022 before markets open. I am using $10.00 debit spreads with the reverse iron condor method for Jun 17 expiry.  A setup example based on Monday’s close would be buying the $140 put strike and selling the $130 put strike. Buying the $145 call strike and selling the $155 call strike.

 


Disclaimer: There are risks involved in all investment strategies and investors can and do lose capital. Trade at your own risk. Questions? Use Ask Teddi

Ask Teddi

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