TSLA squeezes, SPY gapping over key 457.40 resistance, NVDA reversal, and my plan for trading Wed Dec 6.
Good morning. Yesterday was another day of solid trading and algo for credit selling is working nicely.
Let’s get into the price action. I want to start with TSLA and how my plan yesterday didn’t trigger but being systematic allows one to plan.
My original plan was to get short if 235 rejected. We ripped right through it, at the point I should have been looking for a long but I was stubborn on the thesis, and got short on 238.80 approach. then we dipped into vwap and held, and I tightened up stops. and got stopped flat. Then minutes later 10am JOLTS numbers came out triggering a short squeeze/rally and as soon as that hod cleared the grind was on. In theory if today holds, we should see 250+ by Friday. If 237 doesn’t hold then the move yesterday was in face a squeeze.
On second look at all the put buying that came in, It may have been insurance, and all the 237.50 puts that were bought on Monday might have required market makers to load up short. What happens when 237.50 is cleared? A squeeze, and so that I why I kept my mind open to either the dump or the rip to develop.
The TSLA 250c made the monster move below. Going from 1.30 to 3.20 in just an hour!
Ok. So let’s talk SPY.
The morning kicked off with a strong rip but it failed again at that key 457.20 area. I had sold some bull puts which got stopped and then gave a much better entry around 1pm in the afternoon. Sure enough the algo identification of which contracts to sell at the highs and the lows were spot on.
I’m loving watching the contracts bleed out when there isn’t trend.
One of the other things that has been great is being able to patient and plan.
So on each of the large dip I was able to plan scoops on 4570c and sell for 100-200% gains twice.
I wasn’t being greedy because I saw how the chop was behaving and realized until we clear hod, why fight the sell wall and let the premium bleed on me. (I’m not going to get a 5 or 10x trade every day and guys seriously a couple of 100%+ gainer trades in a day is more than enough!)
So what is this price action saying. Notice how each large dip was met with volume at the lows, that implies buying. So overall it appears to me that we are headed higher into January and any large dip that comes, I will be looking to scoop long.
NVDA gave a nice failed breakdown reversal off 450. all last week I was say I wanted 440 to 460 start swing long. Yesterday may have been that dip and start for move back toward 500 into January.
Plan for Wed Dec 6
Process. Process. Process. So I will be sticking to the same routine.
If you notice, I’m trading few tickers these days, and looking for fewer trades. my stops are tight, and the winners are outweighing my losses by a wide margin. Most of all it is all headed toward automation.
So I will be doing the same thing. I’m be looking for range to be set and then take both credit sell and directional trades if I can enter on a failed break down or breakout reversal.
SPY 0.00%↑
I’m looking for a dip and rip off 457 on SPY targeting 459 and maybe 461. but I think 461+ will come either tomorrow or after CPI next week.
TSLA 0.00%↑
Watching if TSLA holds 437/438 area or not for a swing long. Will trade based on reaction to this or reclaim od 442 area.
NVDA 0.00%↑
Ideally dips 465-467 on open and take 475c targeting 487+. Will also consider 490c for 12/15 as a swing.