- A news headline can and will invalidate your previous thesis, come up with a new one
- Trade ideas top-down, do not trade technicals alone ("fuck your charts")
- A 1:3 risk:reward is the limit, less than that and you should not take the trade
- Use the option chain to quickly assess the risk:reward, if your thesis is that $BAC will trade up from $45.02 to $46.50 during the week ending Friday Mar 4 '22, the $47C is the right contract because it should 3X based on that move
- Stockcharts.com (use code "NASA")
- 8 (red) and 21 EMAs (Exponential Moving Average) are your "fast"-moving averages
- 50 SMA (Simple Moving Average) is your "slow"-moving average by default, but check 100 and 200 SMA
- Long down wicks show you buyers, long up wicks show you sellers
- $BAC Macro: economic data release coming soon (skip tech $QQQ and growth $ARKK), cyclicals (sometimes called "discretionary" $XLY) and defensives (sometimes called "staples" $XLP) rallied already but financials ($XLF) and energy ($XLE energy, $XOP oil producers, $USO is /CL using west texas intermediate "WTI" and $BNO is /BZ using brent) lagged behind, will focus on financials
- $BAC Macro: 10-year yields moved down then back up to the benefit of financials
- $BAC Technical Analysis: Buyers at $42 and sellers at $44
- $BAC Premiums: $44C is under-priced for overnight move, risk:reward is there, make the trade
- $BIDU Macro: Russia threatening to invade Ukraine, China flying jets over Taiwan, and $BABA reporting the next morning and a miss or poor guidance would take down sympathy name $BIDU
- $BIDU Technical Analysis:
- $BIDU Premiums: $140P is under-priced at $0.40 with two days left, risk:reward is there, make the trade
- $CRWD Macro: cybersecurity names down and out, recent Nvidia hack a positive catalyst for cybersecurity names
- $CRWD Technical Analysis: large daily wicks
- $CRWD Premiums: $200C is under-priced at $0.75 (yesterday they were over $2) and we are buying an extra week of time, risk:reward is there, make the trade