Varun Haridas
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5/26/20 Market Recap and Watchlist

5/26/20 Market Recap and Watchlist

Jun 01, 2020

Crazy day in the market.   Opened up pretty big and started to die off throughout the day.   $SPY still closed up 1%.   Had some massive plays that I'll go through later in the day, and what I'm looking for tomorrow.

China News

Government started to talk about sanctions being put on China, and it's something that we've talked about for awhile now but it looks like it might be happening soon. Tibet was used as a pawn for the US, the Yuan has been slowly weakening as a response to US sanctions. Be watching for the Yuan to bump past the 7.15 mark. Basically this means that China devalues their currency to make people trade with them, and then they just move it back up to where it normally is.

This could be a false alarm, but if it starts to keep moving this next week, be looking at more puts on $BIDU, $JD, $HSBC, and any other Chinese stocks. Investors could be worried that their stocks will get delisted and their money is locked up.

$SPY darkpool prints

Using FlowAlgo, lots of darkpool prints came in at $295.46, and basically this means that lots of people have already sold shares of $SPY at this price, and this means that $SPY will likely drop to 295 but once it hits that it will bounce and this signals a market correction in the positive direction. Until then, the market won't move up too much further, and I am thinking that the market will open up pretty low tomorrow. But don't panic, because once it hits 295 it will reverse.

Watchlist

I'm going to be watching all of the cloud based tech companies that have earnings this week (you can see the post on instagram) and also will be looking at $COST because I think that they will suffer the similar fate as all of the other retail stores... revenue is up, but so are costs because of COVID, so I think it might disappoint.

REITs are bad news, especially for commercial, so if you find any send those in. Also, I like discount stores that will be receiving a large amount of inventory from places that have gone out of business. $JCP will benefit $BURL, $DLTR, $DG, $BIG. I could also see Embraer (planes) going out of business soon, as consolidation in industries seems to be ramping up.

$ADSK and $BOX have earnings after hours tomorrow, and if any plays come through I will send them out.

Also keep an eye on $VTIQ and watch for the hype, because the merger is being voted for on Friday I believe, so if the hype is true, then $VTIQ could potentially go to 40, but I wouldn't expect it to stay there very long. It will likely pump and dump for a few days after the merger, so have fun trading that.

Then obviously the china stocks, $BIDU, $JD, etc. puts, eventually we will be right on this.

PLAYS

+2 CRON $7 Call 5/29.  Weed company and they have all been poppin lately. This was on my watchlist for today and CRON went down enough today that I got the contract even cheaper than I thought I would. Total cost: $42

+1 $EEM Put Debit spread, 33.73 / 30.73.  This means I bought a 33.73 put and sold a 30.73 put. Max profit of $300-premium = $233. I got this off of the FlowAlgo, lots of volume moved towards this, and my theory of why the market is down is based off this play and the next $IWM play. At some point, the market is going to be down this week, and Friday there were lots of $IWM calls, and those went into the money. With people leaving their positions there, it's likely that the new $IWM and $EEM puts will be in the money tomorrow or Wednesday. If you can get in tomorrow before the cost gets too much, it could be a good play. Total cost: $52

+1 $IWM put debit spread, 137 / 135.  I bought a 137 put and sold a 135 put, same idea as the play above. This also show that as soon as IWM gets to $135, it will reverse, so don't expect it to go any lower than that. The green darkpool prints off to the side basically indicate a level of resistance. Total cost: $46

BIG PLAY RIGHT HERE:

Wasn't too confident on this one going in, but boy I should've been...

+1 $STNE call debit spread, 26 / 28, I also go this off of FlowAlgo, and I bought this before they announced earnings after hours. They were already climbing throughout the day, but they KILLED earnings. $STNE jumped 27�ter hours and is trading at $34.07, so had I only bought a $STNE call at 26, like the flow Algo had, it would've cost me $158, which if you've seen the size of my plays is more capital than I want to risk at one time, but had I done that and sold in the morning, I could sell that contract for about $800, a handsome profit. But to limit my capital risk and thus limiting my upside, I will make about $200ish if I close tomorrow morning. Total cost: $81

+1 FCX $9.5 Call 5/29, this is just testing another theory from the data, mining company. Kinda jumped the gun on this, but it is what it is. I didn't put too much at this because I wasn't too sure on it. Total cost:$17

Another big play here:

I did what's called a calendar spread here, and I'll explain it... $CIR got a massive 22.2B contract with the US government, found this out from twitter (Twitter has a lot of breaking news if you follow the right people). Here's the play

Bought this on May 21...

+1 CIR $17.5 Call 6/19, total cost: $55

Sold this on today

-1 CIR $20 call 6/19, total credit: $65

So I bought a call on the 21st, and once that contract upped itself in value, I sold a higher call at $20. This is basically a call debit spread, but instead of doing it all at once, I spaced it out. So now, I have actually collected $10 in profit (that can't be taken away), but I still hold onto the 17.5 call, so if the price of $CIR goes to 17.5 or higher, I can profit off of that. My max profit is when $CIR is 20 or more, and that profit will be $250 ((20-17.5) * 100) so total max profit on this is $260. This is the best way to protect your capital, but you obviously limit your upside.

+2 $SDOW Call debit spread 33 / 35, this is the main reason I think $SPY will lower to 295 soon. SDOW is a 3x DOW short, and the amount of orders that came into the FlowAlgo were ridiculous, you can see it below. So obviously something is going to happen because this is where smart money is moving their money. This will likely be sold off tomorrow morning, or whenever there's the dip.

Sold my MARK $5 call 6/19, bought for $25 sold for $32, I just didn't like the volatility in this stock and was waiting for any kind of profit. They may have a technology that will be useful for the future, but the day traders like the stock too much right now.

+4 QQQ shares.  I just like the tech stocks, this is part of my long term profile. lots of great companies in here.

+4 ERI shares.  This isn't an option, but I was just moving some capital into a longer term profile. I like ERI, there's the merger with Caesar's that's supposed to go through the first week of June.

Sold my 300 GNC shares at $0.70, got in at $0.56, they had some movement but I think they will announce bankruptcy soon or a buyout, and I don't want to get stuck like $HTZ and $JCP shareholders.

Got clapped on DDOG $95 call, ACB $6 put, PDD $80 call, and SDC did not movement today, but I'm still holding them because time is always on our side. Don't panic sell. Take profits when you can. LETS GOOOOOOOO!!!!!


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