Last week here I was definitely leaning bearish and boy was I wrong. After the Monday afternoon strength I reassessed the evidence and flipped bullish by Tuesday morning. Not only was price invalidating my bearish thesis, but so was psychology as you can see with my comments to subscribers below. From there on, the week turned out amazing. What could have been a very frustrating week, from both losses and from the missed opportunity of a rally, turned into one of our best weeks. The lesson there is DON’T BE STUBBORN. 
I don’t know if these large moves in FANG and other momentum stocks is a last hurrah or the start of the next bull leg, but as a short term trader I don’t really care nor do I need to know. Because the overall market ended in a neutral spot and in honor of Thanksgiving, I have presented stock ideas for next week below.
Overall Market: Given the swift bounce back and bullish seasonality next week, I’m going to keep things simple and favor the bulls next week. The market is not oversold and not overbought; thus, there might just be a slow grind higher next week. Should next week be bullish, I favor the tech sector and think QQQ will outperform as it has all year.
SPY open interest: The highest call strike is 210, which happens to also be technical resistance. With likely a light volume week given the holiday, I put less weight that the calls will act as resistance; however, I’m not going to make any assumptions that the market indeed goes higher next week. If price can get and remain above 210 then I see no reason to fight it. Should price fall below Friday’s low, then my main thesis will be to look for buying opportunities at levels of support. Just like last week if the market has another objective – a much more bearish one, than I will adjust.
Below are levels of support and resistance for SPX:
Support: 2078, 2072, 2059, 2055, 2050 and 2037. Any of those levels offer a buy the dip opportunity. Watch up/down volume, advance/decline, and TICKS to help determine which one, if any, provides a good risk to reward buy opportunity. Below 2037, without a quick recovery, would again give the bearish thesis more validation.
Above 2092, targets 2100, 2116, 2125 and 2134.
Stock ideas: Below are a few stock ideas I am watching for next week. The first group is a sample of three of about eight that I use both open interest and technicals to help guide my trades. The way I will determine which ones I take is based on their price action, option pricing, and which will likely offer the largest returns. The second group are several other ideas that might offer good alpha next week. If you are interested in actual real time discussion and real time trade alerts with regard to these ideas and more then come join us here.
AAPL: There is technical resistance as well as call resistance at 120. If price gets and remains above 120, there is potential for a big move with targets at 121.75 and 124/125. You can set your stop at the low of day or below 119.50.
AMZN: There are two high strike calls at 670 and 680, which is likely a call spread. Support areas are 652, 659, 662, 667. Over 672 should send it to 676 and 680. If it can get over 680 then it could potentially reach 696. 
FB: There are mostly calls (as usual) which could end up being resistance. However, three or four times a year FB call resistance is surpassed and a large rally ensues. Given that there is only one major call strike (at 110) and next week is a lighter volume bullish biased week, it’s possible next week will be one of those weeks. To play it safe, wait for price to get above 110, which also aligns well with technical resistance and place a stop at 109.50. For the more risky traders, above 108.20 also offers opportunity with the first target being 110. Through 110 targets are 112.50 and 115. Below 108, there is support at 106.50 and 104.
Some other ideas: 
Final note: As you can see my set-ups are long set-ups as I am bullish biased. Once again I will reiterate that I am not glued to any one side. Should price present me with bearish evidence, then my plan and set-ups will change.
Come join us where we have been in the right stocks at the right time. Last week for instance, we made money with calls in HD, AMZN, BIDU, GOOGL, ISRG, and NFLX. We had minor losses at the start of the week in V and GS puts, but much larger wins in PNRA puts and mainly CMG puts which were $$$$ by Friday.
A Thanksgiving of Momentum?
Last week here I was definitely leaning bearish and boy was I wrong. After the Monday afternoon strength I reassessed the evidence and flipped bullish by Tuesday morning. Not only was price invalidating my bearish thesis, but so was psychology as you can see with my comments to subscribers below. From there on, the week turned out amazing. What could have been a very frustrating week, from both losses and from the missed opportunity of a rally, turned into one of our best weeks. The lesson there is DON’T BE STUBBORN.
I don’t know if these large moves in FANG and other momentum stocks is a last hurrah or the start of the next bull leg, but as a short term trader I don’t really care nor do I need to know. Because the overall market ended in a neutral spot and in honor of Thanksgiving, I have presented stock ideas for next week below.
Overall Market: Given the swift bounce back and bullish seasonality next week, I’m going to keep things simple and favor the bulls next week. The market is not oversold and not overbought; thus, there might just be a slow grind higher next week. Should next week be bullish, I favor the tech sector and think QQQ will outperform as it has all year.
SPY open interest: The highest call strike is 210, which happens to also be technical resistance. With likely a light volume week given the holiday, I put less weight that the calls will act as resistance; however, I’m not going to make any assumptions that the market indeed goes higher next week. If price can get and remain above 210 then I see no reason to fight it. Should price fall below Friday’s low, then my main thesis will be to look for buying opportunities at levels of support. Just like last week if the market has another objective – a much more bearish one, than I will adjust.
Below are levels of support and resistance for SPX:
Support: 2078, 2072, 2059, 2055, 2050 and 2037. Any of those levels offer a buy the dip opportunity. Watch up/down volume, advance/decline, and TICKS to help determine which one, if any, provides a good risk to reward buy opportunity. Below 2037, without a quick recovery, would again give the bearish thesis more validation.
Above 2092, targets 2100, 2116, 2125 and 2134.
Stock ideas: Below are a few stock ideas I am watching for next week. The first group is a sample of three of about eight that I use both open interest and technicals to help guide my trades. The way I will determine which ones I take is based on their price action, option pricing, and which will likely offer the largest returns. The second group are several other ideas that might offer good alpha next week. If you are interested in actual real time discussion and real time trade alerts with regard to these ideas and more then come join us here.
AAPL: There is technical resistance as well as call resistance at 120. If price gets and remains above 120, there is potential for a big move with targets at 121.75 and 124/125. You can set your stop at the low of day or below 119.50.
AMZN: There are two high strike calls at 670 and 680, which is likely a call spread. Support areas are 652, 659, 662, 667. Over 672 should send it to 676 and 680. If it can get over 680 then it could potentially reach 696.
FB: There are mostly calls (as usual) which could end up being resistance. However, three or four times a year FB call resistance is surpassed and a large rally ensues. Given that there is only one major call strike (at 110) and next week is a lighter volume bullish biased week, it’s possible next week will be one of those weeks. To play it safe, wait for price to get above 110, which also aligns well with technical resistance and place a stop at 109.50. For the more risky traders, above 108.20 also offers opportunity with the first target being 110. Through 110 targets are 112.50 and 115. Below 108, there is support at 106.50 and 104.
Some other ideas:
Final note: As you can see my set-ups are long set-ups as I am bullish biased. Once again I will reiterate that I am not glued to any one side. Should price present me with bearish evidence, then my plan and set-ups will change.
Come join us where we have been in the right stocks at the right time. Last week for instance, we made money with calls in HD, AMZN, BIDU, GOOGL, ISRG, and NFLX. We had minor losses at the start of the week in V and GS puts, but much larger wins in PNRA puts and mainly CMG puts which were $$$$ by Friday.
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