Sunday Night Weekly Recap AUG 18, 2024

Do you like commonalities? I do. Regardless if your a home owner, rent your space or camping out in moms basement like Wil Ferrell in “Wedding Crashers,” none of us is particularly fond of moving day.

Like the meme? I made that for you guys. “Dear internet, #YourWelcome” 😆 Moving day typically goes like this, it’s either blazing hot out like it is right now, or it’s cold, wet and rainy. Pianos are made for going up to the 3rd floor along with oversized couches and king size beds. But some how, some way, the job always gets done.

The market just made that move. The selloff that occurred over the last 5 weeks is almost back to ATH’s with it’s incredible “V Shaped Recovery” This past week was strong, extra strong. Yeah we got the heavy stuff up to the 3rd floor, but what typically happens after all of that lifting? You take a breather. The market did that this last Friday. We started saying that last week that Friday was OPEX and some stalling / profit taking was to be expected.

We don’t predict but we do plan. Right now that’s exactly what we here at investingwithfaith.com are doing. It’s no secret that NVDA’s earnings are to be released AH on Wednesday AUG 28, 2024. Traders, that’s only a little more than a week away. Why does that matter? Well, let’s recap. NVDA moves markets.

If your a stock holder be sure to set those STOPS. Remember investing without using STOPS is like driving a car without brakes. Currently the market is pricing in a $17.00 move in either direction. That’s a 13.7% move from it’s current price of $124.23

Options~~~~ Let’s Talk~~~~ The moneyness is sitting at the 140 Strike for SEP 20, 2024… Currently there is over 100,000 Call Contracts. The Put side holds 8,297. Now lets really get “Cray Cray” The SEP 20, 2024’s at the 130 Strike are now holding over, ready???? Ready??? Readyyyyy????? 135,000 Call Contracts.

Here’s the difference, the 140’s have the higher probability of being bought and not sold as hedges because they are farther OTM. And due to the I.V. having been sucked out recently over these past 5 weeks they are now priced within “Fair Value” Those 130’s are being bought yes, yes they are, but some are most likely being used in multi legged protective plays like Bull Call Spreads, Iron Condors and even Covered Calls where traders can capitalize off of upward movements but have risk protection in case of a pullback. That is where we are currently at. These numbers are unheard of, just going up to the next strike alone we sit at 71,000 Call Contracts… GOOGL, META and TSLA combined don’t even come close.

Last week we took advantage of this. To be honest I’m not sure if we’ll be holding any blind calls into earnings, that is something we try to avoid and if we do we do so it’s with dates that are farther out so as not to allow Theta to kick in on us. New trades for earnings that we will be looking at will be possibly buying the 125 and then selling the 140, both for SEP 24, 2024. Should NVDA blast north we can “adjust” by selling the short strike and buying a new one higher OTM should we want continued protection, or we simply close the short side and ride the long until we achieve our desired profit target. One could also simply close the spread out completely too. For highly conservative traders wanting more protection they could consider selling the 135’s or the 130’s even. That would however make for a shorter trade with less profit potential.

Now should NVDA drop like a rock, one could sell the 125 long outright and ride the 140. Or “adjust” by selling the 125 then buy a lower strike.

The goal here is to capitalize while placing protection, defense wins football games, unless your the Kansas City Chiefssssss!!!! In which case Patrick Mahomes wins football games.

Do you recall earlier this week I mentioned a new one that just made the Watch List? Well this is one that I traded heavily for about 18 months straight just a year or so ago. It’s RACE. It closed up 9.38% on the week. Not to shabby. What we love about RACE is the long range consolidation zones or “boxes” stacked repeatedly over time. Our kind of stock.

We could see more movement this week. Let’s hope it’s north, and if it’s not, be prepared to adjust accordingly.

Invest wisely, live charitably and be well

Brother Bill