What Are They Up To?

November 15, 2022

jeffwood

What Are They Up To?
The fun thing about writing for Traders Reserve is that the co-owners, John and Dave, keep me on my toes. They often come up with ideas that no one else is talking about. And they are at it again.

I invite you to set aside 30 minutes on Thursday, November 17th at 4pm EST as they reveal big news about their 9th Annual Investor’s Blueprint Live conference. They won’t tell me the theme or anything. What are they up to? It’s top secret, so I’ll be joining to hear what they have up their sleeves.

Get a Seat Here and Don’t Miss Out

Did you click on the link? Did you register? I’ll wait…

The PPI numbers came out yesterday and came in less than expected. The Producer Price Index annual increase went from 8.5% down to 8%. The consensus was 8.3%, so the market took off pre-market with the notion that various inflation gauges are showing weaknesses.

Now, I think we will see a continuation of a bear rally here. There is a similarity in the SPY chart comparing the July/August time to now.

Around #1, we crossed above the 50-day moving average. Then #2 shows we came back and retested the cross above the 50-day moving average. Then at #3, the market rose flattened before the next leg up before retreating. Will we do the same thing here?

Last time it rose almost 4% after #3 in August. If that happens again from our current levels, we could see SPY rise up to around $413. Interesting since yesterday I said I thought we’d come up to about $415 before we hit resistance.

There are times when I like to trade two symbols that are moving opposite each other. Those who know me, know that I trade IWM quite often. The chart on the left is IWM, and the chart on the right is USO, the United States Oil Fund. If you compare the two charts, as IWM goes down, USO heads up. That doesn’t always work but has been that way for the last few months.

One can act as a hedge against the other. I still like trading them as Iron Condors (the combination of a bear call spread and a bull put spread). If both symbols stay flat, we can win on both trades. If one takes off and the other sinks, it can reduce our portfolio loss.

Here are two iron condor examples of trades you can place.

BTO = buy to open
STO = sell to open

Ticker: IWM
Expiration: 20 JAN 23
STO 210 call
BTO 220 call
STO 165 put
BTO 147 put

Credit:$2.25
Margin Requirement: $1600

Ticker: USO
Expiration: 20 JAN 23
STO 92 call
BTO 105 call
STO 61 put
BTO 53 put

Credit $1.60
Margin Required: $1200

Look to close out each of the positions at a 50% profit (or more). Stop loss on each position would be when the underlying trades above or below the strikes that you sold.

What do you think? Is the risk worth the reward on each of these?

Oh, did you sign up for the IBL announcement? Get a Seat Here and Don’t Miss Out

If you have any questions, comments, or anything we can help with, reach us at any time.
Email: [email protected]
Phone: (866) 257-3008

Jeff Wood

Editor, Filthy Rich Dirt Poor
Coach, Options Testing Lab

December’s Seasonality Pattern

jeffwood

On November 30, 2022

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