Weekly Review NOV 17, 2024

You don’t have to be a Joe Rogan '“Bro” or even a fan to appreciate the truth
After the Tyson VS Paul fight ended Friday night which turned out to be a disaster for NFLX ( it was like NFLX was old AOL dial up and no one that paid could get in ) Joe Rogan, podcaster, comedian, fight announcer, had only 3 words to say “Magic Isn’t Real”
Was the fight rigged? It wasn’t real, I can tell you that…… On multiple levels

There are many that feel the markets are that way, especially when it comes to the actions of the FED. We as investors have no say in the markets, the FED, or what any other influence does, we can only react to their ( or it’s ) actions

The election ended, stocks went to “Da Moon”, J-Pow then comes out and says “forget you guys, release the bears!!!!” The bears seized control, disrupting portfolios across the nation… We can’t change that…. The question now becomes is it over?

If history is any indicator at all the sell off will most likely continue. And it will be hitting not just hard, but fast. The good thing is that we can already see what’s in front of us.
There is an old set up used by Gap Traders like myself known as “The Island Reversal”
An Island Reversal is when a Gap Up appears on the left side, has some price action for a few days to weeks even, then a Gap Down on the right side.. Leaving a ‘Island” or a “reversal” pattern to go short… Island Reversals can be used to the long side also when at the bottom of the channel… This isn’t just going on here in the S+P, but in the NASDAQ also. We here at theoptionscoach.net believe that more often than not, history repeats itself

Right now the S+P 500 has given us a very clear pattern with Fridays Gap Down
A few things to consider:
The S+P is sitting at the 20 EMA, could it bounce here? Maybe, not likely but maybe
The rotation out of tech might get a boost this week
After the bell on Friday SMCI shot up over 20% with the announcement of new investors for a bailout
NVDA reports AH this Wednesday
Waiting on those 2 to “save the day” is not a good strategy. But they could give a boost to the market, or some relief at least
I’ve outlined the times the market had an Island Reversal this year
Not all gaps are created equal, some are full, some are partial, some are heavier Volume, those factors matter when trying to determine price targets
SPY is the most popular ETF to follow the price of the S+P
It is one / tenth the price

When you see this weeks Heat Map you will see that banks are driving it home
The financials are still green green green

This week we will look at 3 bank plays
All of our other stocks are either holds or sells, depending on where you entered and if you are green or red. We don’t buy stocks when they are red and we do not hold losers past a 5% down turn. That is why using STOPS is so crucial

Options we most often play with Verticals not only to offset the cost but for downside protection

Allow me to add that these simply may be short term plays if the market does manage to do a reversal in the this coming week. We’d welcome it but be surprised if it does

All of the following Options plays are for DEC 20, 2024

WFC 75 / 80 Bull Call Spread going for 1.54 at the MID
Earnings on JAN 10, 2025

JPM 245 / 250 Bull Call Spread going for 2.35 at the MID
Earnings on JAN 14, 2025

MA 520 / 525 Bull Call Spreads going for 2.75 at the MID

For investors that are willing to put on risk without any downside protection going into Blind Calls would look like this

WFC 75’s are 2.23 at the MID
O.I. is 9,904
I.V. is 28.16
Deltas are 0.44

JPM 245’s are 7.17 at the MID
O.I. is 7,358
I.V. is 23
Deltas are 0.53

MA nothing that I love in the way of Blind Calls that don’t carry unnecessary risk
Going to hold off on those for now

It’s Sunday, if your watching football I hope that your team won, unless you are playing the Chiefs!!!!!!!!!!!!!! 😁 
Tomorrow is another day

The Options Coach