Welcome to Paid to Play -- a unique window into a live trading account we manage for the express purposes of generating cash flow and adding diversification to our portfolio of trading strategies.
There are specific questions we seem to get regularly, so I thought I'd compile this FAQ ("frequently asked questions") doc to serve as an ongoing resource to all P2P subscribers.
Ok, so the market is bouncing and its offering a nice reprieve to those who've been caught on the wrong side of the recent slide. Does this mean the bottom is in?
It's far too early to tell. And that's not the bet we're making just yet. In fact, today's trade is to take advantage of a nice bounce in a name we're bearish in to position for a retest of recent lows.
But yeah, it certainly feels like it when seemingly every "relief rally" is met with fierce selling.
In our morning analyst meeting today, the team was lamenting the fact that it seems any levels of support that might seem obvious are proving to be nothing more than mirages. Levels are getting taken out everywhere.
This makes it increasingly frustrating to put on any kind of range-bound delta neutral plays. Yes, volatility is high and its very tempting to put Iron Condors or Strangles on here. But if we're looking for instruments that are likely to stay within a certain range, we just don't have any confidence right now in any levels on our screens.
Another week and more elevated fears in the marketplace. The Nasdaq QQQ's breached the 300 level intraday today and that's got everyone chirping --- and for good reason.
Of course, the contrarian bird sitting on my shoulder has been uttering the phrase: "the wider the rubber band is stretched, the harder the snap back!"
Now, I'm not going out on a limb and declaring that the bottom for stocks is in and we rally from here. But I do like the odds of a viscous snap back rally materializing at some point this week. And if something like that were to come to pass, I want to be in names that have held up the best in this tape.
In the All Star Charts recent Monthly Charts Strategy Session, JC highlighted a bunch of stocks that have held levels that feel significant.
And since we've seen a lot of damage to bullish charts in recent weeks, the best bets on the board right now appear in stocks that have held up better than the rest.
One mining stock that held up well after hot money ran for the exits is Newmont Corporation $NEM.
