Intermin Market Update May 27, 2022

[SOL]

This should clarify the situation

A blistering 3-day rally will probably mark the end of the second version of shock and awe. Market Update May 11, 2022

[Eric]

Tuesday basically opened and closed flat. Wednesday was apparently not blistering enough?

[froggo]

Hey Sol,
Am working thru the latest 30/5/22 market update report (hope this is the right place to post in forum, let me know if should create new post thread for this next time)...

I noticed TMF update section says TLT ("Close half the position out when TLT trades in the 130 to 133 ranges) - which this price range also corresponds with TLT stock and have assumed this closing of half position applies to TLT - pls let me know otherwise, thanks!

20220530_market-update_TLT-TMF.PNG

[froggo]

woah, did i just receive an rank promotion in this MU forum?
i remembered my previous rank was a delicious nutritious sardine...
now i get the cool matrix red/blue pill dude... yayyy, so happyz!
...

20220601_mu-forum-profile-froggo.PNG

[PuppBaby]

Hey Sol,
Am working thru the latest 30/5/22 market update report (hope this is the right place to post in forum, let me know if should create new post thread for this next time)...

I noticed TMF update section says TLT ("Close half the position out when TLT trades in the 130 to 133 ranges) - which this price range also corresponds with TLT stock and have assumed this closing of half position applies to TLT - pls let me know otherwise, thanks!

20220530_market-update_TLT-TMF.PNG

I believe the original recommendation was to Sell by June-July, so yes hopefully it hits this target within the next 1-2 months but things may yet evolve.

[froggo]

Hey Sol,
Am working thru the latest 30/5/22 market update report (hope this is the right place to post in forum, let me know if should create new post thread for this next time)...

I noticed TMF update section says TLT ("Close half the position out when TLT trades in the 130 to 133 ranges) - which this price range also corresponds with TLT stock and have assumed this closing of half position applies to TLT - pls let me know otherwise, thanks!

I believe the original recommendation was to Sell by June-July, so yes hopefully it hits this target within the next 1-2 months but things may yet evolve.

Thanks PuppBaby!

[Yodean]

TLT, TMF likely have a nice, bullish run coming up. I'm selling cash-secured puts (SCP) on TMF on down days, selling covered calls (SCC) on up days, while maintaining a core TLT position. Nfa.

[Investor87]

On 5/15/2022 in the AI update (I am assuming it is ok to share these quotes in this forum, if not then delete this)...

"Former (NDX) support now becomes resistance which fell in the 12450 to 12550 ranges. At the very minimum it needs to trade above 12450 for three days in a row to indicate that a reversal is in the works. The ideal setup would entail two weekly closes above 12540."

"The index traded to new lows, but the MACDs did not. If the NDX breaks through the 12540 ranges and follows the ideal pattern, the ensuing rally could be quite robust."

"Interestingly a monthly close above 12540 will also trigger a buy signal."

The NDX has traded above 12450 five days in a row, it closed out May above 12540 and last week it closed at 12681 and this week it squeaked out a close of 12548. Is this an indication of a buy signal or are we mostly looking for a robust 3 day rally, or both?

[SOL]

On 5/15/2022 in the AI update (I am assuming it is ok to share these quotes in this forum, if not then delete this)...

"Former (NDX) support now becomes resistance which fell in the 12450 to 12550 ranges. At the very minimum it needs to trade above 12450 for three days in a row to indicate that a reversal is in the works. The ideal setup would entail two weekly closes above 12540."

"The index traded to new lows, but the MACDs did not. If the NDX breaks through the 12540 ranges and follows the ideal pattern, the ensuing rally could be quite robust."

"Interestingly a monthly close above 12540 will also trigger a buy signal."

The NDX has traded above 12450 five days in a row, it closed out May above 12540 and last week it closed at 12681 and this week it squeaked out a close of 12548. Is this an indication of a buy signal or are we mostly looking for a robust 3 day rally, or both?

We also kind of got a three-day rally, though it was not the best one could state that the reversal on wed (i think) was good enough. The more positives we get the better, as the odds still indicate that the market will top out and most likely drop to new lows sometimes in the 4th quarter

[LoriPrecisely]

In this update, the play :

KMB Jan 2024 120.000 call New Play
"When the stock trades in the 127 to 129 ranges, deploy 1/3rd
of a lot into this position. These are in-the-money calls with plenty of time on them; they will trade more less like stocks. One of the reasons to use in-the-money calls is if you are running low on funds. This allows one to control 100 shares while deploying less capital. However, don't abuse this strategy. Do not overcommit funds to options. If it trades to 139 before you get in, this trade is no longer valid. If filled, close the entire position when the stock trades in the 150 to 154 ranges."

Today, it is at $127.46, with a Jan 2024 Call price of Bid $16.50, Mid $17.25., Ask $18.
Are we selling covered calls against this, or is that an individual's decision?
Closing the position entails selling to close? Or, buying the stock and selling for a gain?

I noticed that the Jan 2023 $130 Call is a lot less expensive: $7.00, $8.20, $9.40.
I wondered about buying that one to sell covered calls against.

Although, the 2024 Call gives me an additional year to sell Calls against it to earn the additional $1000 I paid for it.

And, I know the market price could be in a completely different place in 6 months verses 18 months.

Just thinking out loud.

[harryg]

Are you referring to the item in blue in the newsletter?

That is a long call, ie: buy to open. A option with expiry more than a year away is called a LEAP, but it's exactly the same thing.

Loosely speaking this would be an alternative to purchasing the shares. You would normally offset that position by selling the call in the market.


I'm not sure that I follow some of the rest - you can't sell a covered call against a 2023 call - a covered call is sold against a holding of shares.

[Yodean]

I'm not sure that I follow some of the rest - you can't sell a covered call against a 2023 call - a covered call is sold against a holding of shares.

You can SCC against LEAPS.

Also known as the "poor man’s covered call," you buy ITM LEAPS calls, and when the time comes, you sell near-term OTM calls against these LEAPS calls.

Not MCOT (my cup of tea) atm, as it's a bit gimmicky and more time-consuming, but I could see why some would want to do it.

Like you mentioned previously, sometimes (often?) it's best just to buy the shares directly on selling climaxes, and sell the shares on buying climaxes.

When you think the markets have stabilized a bit, then let the Wheeling (SCC, SCP) begin. My current OptionNoob 2c, anyways.

[Eric]

I'm not sure that I follow some of the rest - you can't sell a covered call against a 2023 call - a covered call is sold against a holding of shares.

You can SCC against LEAPS.

It doesn't have to be a LEAP, and it doesn't have to be ITM. You could sell a July 1 INTC $43 call against your July 15 INTC $42 calls it you would like to.

[harryg]

Also known as the "poor man’s covered call," you buy ITM LEAPS calls, and when the time comes, you sell near-term OTM calls against these LEAPS calls.

'Poor Man's Covered Call': OK I had not heard of that terminology. I'd call that a diagonal spread of some sort if I remember correctly.