Market Thoughts: Mid-Week Review

by | Oct 4, 2018 | Daily Weather Report, Market Thoughts, Newsletter

Here were my Market Themes heading into the Week as discussed in my Live Trading Room:

Yes Brazil, No China

My 9/21 Brazil into Oct 8 Election theme: well these three cost/margin efficient trade tactics, those Risk-Defined financed Call spreads will be over 10X.
I really like a financed call spread right here on $EWZ for a swing long: NOV $34×37 CS w $30P sold looks good. And it’s ‘free’ ;/) Or maybe Sell the JAN $31P, buy the JAN $37C – Also ‘free’. Oh wait, I’m diggin JAN $PBR $10P sold 2X against an $EWZ DEC $34x39CS for $.25.

Brazil is en fuego! Well, Tues PBR was up 6% along with EWZ and I said in the room #NOTDONE. Today PBR opened up another 7% into $14.50 PT and I said it’s time to take most off and leave a runner into $15 PBR as this may set up to be a Buy the Rumor, Sell the News event next week. However, judging from UOA today, the Big Money does not think so!

China’s market  (except Hong Kong mind you) is closed for Golden Week and nothing in this bunch interests me except NTES short at $236 Mon at Trendline Resistance into potential $170, and BABA short settng up again as long as it stays <$169.

So many great shorts from last week that are totally working:

  • RH – <$140 to $122 😉 then 110
  • CMG – <$463 to $440 😉 then 420
  • M – <$36 to 200D at $32.50 😉
  • IWM – <$170 to $164.50 😉 on its way to $160
  • AMD – <$33 to 31.50 to break of $30 for fast drop into $27.30 ;0)
  • HD – <$210 to $203.50  ;-). 
  • TSLA  -<$213 close to $291.50 😉 
  • AMZN  -(after trading long $1925 to 2025) <$2025 to $1950 😉 then 1910
***A break at any of these lower PT is a continuation short. 

So many great long sfrom last week that are totally working:

  • OIL – it’s called an oil spike for a reason which means we can Basket Trade the sector: USO, XLE, XOP, OIH, XES, EOG, APC, PXD, MRO, NBL, FANG, CLR, CRC, HES, MRO…
  • WTI – $70-76+ 1st PT, needs to rest and reset for higher.
  • URA – >12.50 to $13.50 to start, now must stay >
  • BA – >$373 to 383 to 393 😉 , 261.8 Fib PT is $410
  • EWZ – >$33 – 33.50 if/then 36.50 to 37.65 ;0), 200D is 39 by EOW
  • PBR – > $11.10 – 11.80 – 13 – 14 ;0) perhaps 15.45 by EOW
  • BMY – >$60 – 63 😉 now > $66.65 – 71.
  • NVS – >$81 – 85.75 – 87.50 😉 now $90 in play
  • GILD – >$77 to $79 😉 now can it stay >$77 for a real run to $83-85?!

Trading Ideas

GE – building off those 160K contracts of the $11.50P SOLD on Friday when $11.29 was The Tell, now it’s backing and filling but looks constructive.

From Citi “a return to normal (even if it’s a new normal) could lead to a significant re-rating (higher) of the stock… Management change we think is bigger and more forward looking than the $23bn non-cash impairment and guidance.

Oh Canada!

I have been liking the Long Canada Trade, specifically FXC. Here’s my chart and here’s a narrative by my fave funny man Kevin Muir

EURO’s IN TROUBLE

The news in Europe – specifically Italy spreads widening and Hard Brexit concerns – has caused the Euro to fall and USD to rise. At 5AM, my price triggered with the following note:

EUR/USD has crossed down through 1.15082 Note: MAJOR WEEKLY SUPPORT MEANS IF HOLDS = INVERTED H&S ON WK = MUCH HIGHER IN TIME BUT MUST GET/STAY ABOVE 1.175 (30 WK) AND BREAK ABOVE 1.19 NECKLINE.

OTHERWISE, IT’S A SHORT TO 1.13 AND USD RISES W RATES: 70-30 ODDS RATE SPIKES UNTIL EUR/USD 1.13

 

So my expectation is that this cycle of RATE – OIL – WAGE- INFLATION – RATE spikes may just beginning. And this will cause panic in Emerging markets and elevated Volatility. IMPORTANT NOTE FOR EQUITIES: During the February bond yield surge, FAANGs dropped 12-14%. I will address the recent Rate and Oil Spikes in a separate post.

Don’t forget to hedge!

-Samantha

Thanks for reading and please consider joining me in the LIVE Trading Room where we work through Value and Momentum trade ideas and set ups every trading day.

At LaDucTrading, Samantha LaDuc leads the analysis, education and trading services. She analyzes price patterns and inter-market relationships across stocks, commodities, currencies and interest rates; develops macro investment themes to identify tactical trading opportunities; and employs strategic technical analysis to deliver high conviction stock, sector and market calls. Through LIVE portfolio-tracking, across multiple time-frames, we offer real-time Trade Alerts via SMS/email that frame the Thesis, Triggers, Time Frames, Trade Set-ups and Option Tactics. Samantha excels in chart pattern recognition, volatility insight with some big-picture macro perspective thrown in.

More Macro:  @SamanthaLaDuc  Macro-to-Micro: @LaDucTrading