OPTIONS Trading Ideas | July Week #4 | Xtrades

Summary

In this video, Alex from xtrades reviews the previous week's market volatility, influenced by political events and pre-election tensions, and provides a recap of the trade ideas list. He discusses specific stock performances, including U calls and Nike calls, and shares the outcomes of trades like WBA and QQQ. Alex also previews upcoming economic data releases and earnings reports from major companies like Tesla and Google, and offers insights into potential trades for the week, focusing on stocks like iWM, AMD, and CLH, while emphasizing the importance of monitoring the VIX for market sentiment.

Takeaways

• 📈 The speaker, Alex from xtrades, provides a weekly trade ideas list and discusses the volatile market conditions due to political events and pre-election uncertainty.
• 📉 There was a significant market pullback, particularly affecting tech and chip names, which resulted in losses despite some good trade ideas from the previous week.
• 🔄 Alex mentions specific stocks and their performance, such as U calls that peaked on Thursday and then experienced a substantial pullback, and Nike calls that remained mostly unchanged.
• 🚀 The video discusses the breakout and pullback of Neo, a stock that initially showed promise but failed to maintain its upward momentum, closing below the 50 SMA.
• 🛑 The trade tensions and potential tariff increases on Chinese electric vehicles are highlighted as reasons for the market's downward trend, affecting China names negatively.
• 🏁 Alex closed a position in WBA with significant gains before the stock aggressively sold off, demonstrating the importance of timing in trades.
• 📊 The importance of economic data releases like GDP and PCE is emphasized for their potential impact on market movements, with the latter being the Fed's preferred inflation gauge.
• 📈 The speaker anticipates potential opportunities in indexes like SPY, QQQ, and IWN, suggesting that a bounce from the 9 EMA could be a good entry point for trades.
• 📉 The video outlines specific support and resistance levels for stocks like AMD and CLH, indicating strategies for potential dead cat bounces or value area entries.
• 📝 Alex provides a detailed analysis of the SPY and QQQ levels, emphasizing the need for these indexes to reclaim certain levels to continue their uptrend and the significance of the 921 EMA cloud.
• 💡 The closing levels of the VIX are identified as crucial for market direction, with a close under certain levels indicating potential market bounces or continued volatility.

Q & A

What was the general market condition described in the video?

The video describes an insane week politically and for the markets, with a big pullback and lots of pre-election volatility, especially downside in chip names and tech stocks.

How did the U calls on watch perform last week?

The U calls on watch performed well initially, running up about 8 to 10% until Thursday, but then had a significant pullback, resulting in a red close for the week and wiping out all the gains.

What was the status of Nike calls on watch?

Nike calls on watch ended up being essentially unchanged, staying within range and not moving significantly from the previous week's close. The key level to watch for Nike is over $74.

What happened with Neo on watch?

Neo on watch broke out of a channel initially, had a good run on Tuesday, but then slowed down and fell back within the channel, making it less attractive for immediate trades.

What was the impact of Trump's trade tensions and potential tariff increases on the market?

The trade tensions and potential tariff increases, particularly on Chinese electric vehicles, likely contributed to the pullback in China names and added to the market's volatility.

How did the WBA position perform and when was it closed?

The WBA position was closed in two portions, with the first portion closing at about 28% and the remainder at about 37%. This was fortunate as WBA rejected very aggressively and sold off on Thursday and Friday.

What was the outcome of the QQQ call Scout and the SPY calls?

The QQQ call Scout resulted in a 35% loss, but the SPY calls made up for it with a 44% gain, achieved by buying at a qy level and selling just in time before a significant sell-off.

What was the performance of the iWM 215 puts?

The iWM 215 puts initially resulted in a loss of about 30 to 40%, but eventually, iWM came back down as expected, and the position was closed with a gain of about 21% on Friday.

What economic data is expected to have the most impact on the market this week according to the video?

The most impactful economic data of the week is expected to be the GDP on Thursday and the PCE, the Fed's preferred inflation gauge, along with consumer sentiment on Friday.

What are the key levels to watch for the SPY and QQQ indexes?

For SPY, key levels include holding the trend line, getting back over $550, and reclaiming the 921 EMA cloud. For QQQ, it's crucial to get back over $476.26, holding above the support at $473.82, and reclaiming the trend line and the 921 EMA cloud.

What is the significance of the VIX levels mentioned in the video?

The VIX levels mentioned are crucial for market sentiment. Closing back under 16 and 1540 on the VIX is key for a bounce in the market, while levels like 1794 and 2136 are significant resistance areas that could lead to rejections and potential market pullbacks.