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Jared, as far as the nonsensically named "inflation reduction act" goes, the  MMT economists believe, in part, that increased taxes are a primary means for sovereign nations with control of their own currency to decrease inflationary pressures and redistribute wealth. We're just seeing them play out that part of the theory after the first phase got out of control. IMO.  I've never been able to figure out how MMT theories work in a world with global trade, competing currencies, etc...and that's part of the reason the theory has never been endorsed by anyone other than nut jobs economists like AOC's professor at Boston College...but it appears they are running with the next phase of the theory anyway. 

SPX weekly - bullish MACD

Posted by DigiNomad on 29th of Jul 2022 at 04:59 pm

SPX weekly - bullish MACD cross plus green on histogram for the 1st time since November.  That might be enough to trigger some additional buy algos early next week (that didn't already trigger). We'll see. 

SPX -  thanks Steve, I

SPX ST Views

Posted by DigiNomad on 29th of Jul 2022 at 02:14 pm

SPX -  thanks Steve, I love these projections...still very useful even when not taken as gospel (some people want black and white projections/guidance, but trading doesn't work that way).  

I think your current ST projection plays out and completes wave A of a major bear market correction that finishes either at  4368 (6.18% fib) or 4567 (78.6%).  Market always catches the most people off sides, and a rally to those levels would do the trick. Also, a rally up and out of the current channel matches up well with my theory that when prices violates trend channel in the direction of the trend (as happened 16 - 17 June), a reversal is imminent and it will take price up and out of the other side of the channel and establish a new channel in the other direction (probably very short term in this case).  I think 3200 is in the cards, but probably not until November or so (unless the slope of the bear market changes). 

XSP is a good alternative

Posted by DigiNomad on 29th of Jul 2022 at 12:48 pm

XSP is a good alternative to SPX for smaller taxable accounts. 1/10 the size, decent liquidity (much better than it looks) and you still get the 60/40 tax treatment. It's doesn't trade as many hours at SPX though (I think SPX is 23/5 and XSP trades more like standard index options...closes at 4:15, etc). 

tmbrook1 - that screenshot is from Interactive Brokers (click the "performance" box when reviewing a trade), but I typically use either ThinkorSwim or Tasty Works to analyze option trades and then I execute them on Interactive Brokers. They all have about the same capabilities, but some are easier to use than others. 

This is my next layer for SPX.

14%  return/risk with 82% profit probability is about what I look for. 10% return/risk and 80% probability is my floor. 

Imelhoe - used AUG 18 for the 1st tranche (short SPX 4185) and SEP 15 for the 2nd tranche  (short 4350 -  started yesterday and added to this morning).  

TBH - the returns aren't great with VIX at this level, but I like to keep it mechanical as much as possible. So I tend to accept lower returns during low vol periods. Most options traders move away from indexes when the VIX drops in order to achieve higher returns for a given capital outlay...but I like the relative safety inherent in the indexes and capital isn't really my limiting factor...for me it's more about managing overall risk. 

  This was worth forwarding...

Corrected strikes: fredsaid - yes, selling call spreads in SPX right now. My first layer was AUG 4185/4285 (back when vix was low 30's) and my latest is SPX 4350/4450. I try to sell strikes between 16 and 20 delta and then reduce capital requirements and risk by spreading it out with a long put or call. With the VIX down here, it's starting to be tempting to go long vol, but my system is much less complicated when I keep it to selling premium instead of buying it.  I make a few exceptions here and there to play single stocks, but with short premium, I can always see exactly how much I have "on the board" for any given expiry and use that to hit my monthly income targets. 

I've been building short positions. My latest is SPX 2350/2450 call spreads. Adding on the way up. 

Developer fund? Matt, I'm not a programmer, at least not a very good one. I dabble at scripting in various languages and took a python boot camp last year. Anyway I know enough only to know some of what's possible. In the case of your systems, it seems like a relatively small programming task using python or whatever native programming language applies to your trading platform to generate either an email when a signal triggers and/or a post to the community. Including a screen capture automatically and other similar tweaks shouldn't be much of an issue.

Anyway, I'd definitely be willing to invest a bit to see it happen and I'm sure there are others like me. Doing it manually seems like an awful lot of work for you and I would rather not see you get sick of it and risk having it go away at some point! 

Correction: GOOGL -  The 200 week EMA and 50 month EMA are overlapping right now at the 95 - 96 area. I realize they are about the same thing, but I think it makes for a compelling support area. 

GOOGL -  The 200 week

Posted by DigiNomad on 26th of Jul 2022 at 01:17 pm

GOOGL -  The 200 week EMA and 40 Month EMA are basically overlapping right now at the 95 - 96 area. I've been watching that area as a potential magnet for a while now. Selling 95 strike puts seems like a high probability earnings play. 

Diamond in this case looks

Update on Diamond

Posted by DigiNomad on 26th of Jul 2022 at 12:52 pm

Diamond in this case looks a lot like a H&S pattern. But maybe looking at it this way allows for a trigger a few bars earlier than a break of the neckline?

Nice reversal so far. Channel breaks in the direction of the major trend (aka going parabolic, whether up or down) seem to almost always signal an upcoming reversal. Sometimes takes longer than other times...and sometimes takes longer than some can remain solvent, but it still seems to be a thing.

You can divide one long contract by shorting a number of shares equal to 1/2 the current delta (if you want to take off 1/2 risk). Note that using delta this way requires adjustments along the way as volatility and time to expiration change (the other greeks)...but it's always worked pretty well for me, especially in short term situations. 

OIH - volume is anemic,

Posted by DigiNomad on 25th of Jul 2022 at 03:28 pm

OIH - volume is anemic, at best. It's way below daily average. Per Steve's comments last night, I was hoping for some volume confirmation with todays move. NOT happening. BUT....I looked back and the last few times vol was this low (e.g. late December), it preceded a big move higher. Doesn't have to play out that way this time again, but that has been the recent pattern. 

OIH Updated - I was a little early on this trade Friday afternoon but I also liked the inverse head and shoulders look that was forming and used that to place my stop.  Working out well so far. 

OIH - gapped up out

Posted by DigiNomad on 22nd of Jul 2022 at 11:44 am

OIH - gapped up out of descending triangle (not drawn here) and looks like maybe it wants to break out of the channel, 16 Delta put currently at 185, for those that primarily sell puts to enter, like me. 

Love the systems! For now I'm using them to leg into what ends up being iron condors...often unbalanced wings as I leg in. Eventually, I'd like to track the average number of trades generated over a year or more and build a system for the systems that makes it a bit more mechanical in terms of sizing per trade with a total portfolio allocation in mind for system trades (I'm currently running it around 10%, but it's a mental thing since I haven't yet figure out how to build the allocation model given all the different triggers). 


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