2021-04-11 Sunday

WEEKLY MARKET OVERVIEW

Another strong week for the markets with S&P500 (SPY) and Dow Industrial (DIA) pushing to fresh new all-time highs, and starting to look very extended on the upside.

SPY
DIA

Mega tech stocks (QQQ) have been the weekly leaders and now are about to test resistance at former all-time highs.

QQQ

Small caps (IWM) have been lagging against the rest of the market and now at the convergence of a wedge on a daily timeframe. Next week we’ll know to which direction the pattern is going resolve.

IWM

Weekly performance (Week 14/2021)
– SPY (S&P500) +2.72%
 QQQ (Nasdaq100) +3.86%
 DIA (Dow Jones Industrial) +1.93%
 IWM (Small Caps) -0.51%

Volatility (VIX) keeps falling and now trading in the 16 range, and with these decreasing levels of volatility options premium are also getting lower.

VIX

WEEKLY TRADING JOURNAL

On the week I managed to close three different plays.

1) During the pre-market on Monday NNOX exploded on the upside due to a FDA approval. Before the opening bell, the stock started to fall but I was able to sell a 04/09 CC $75 for a generous $3.50 credit.

NNOX at opening of the session on Monday 04/05

As the stock kept falling sharply for the rest of the session (and also during the following one) I managed to close the position the next day buying it back for just $0.10, keeping 97% of the premium for an astronomical 1655% AROI.

NNOX at the mid of the session on Tuesday 04/06

2) After 43 days and 2 rolling adjustments on Tuesday I also closed the cash-secured put on QQQ for a $0.17 debit. Despite the difficult period for tech stocks in the end I managed to keep 98% of the overall premium and achieve a solid 29% AROI.

QQQ

3) Finally on Friday night I let expire worthless the ARKK 04/09 CSP at the $117 and $120 strikes, achieving respectively a 94% AROI in 4 days and a 58% AROI in 23 days.

ARKK is one of my favorite instruments for the wheel strategy and I have more CSP expiring on 04/16 and 04/23.

ARKK

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Take care and trade wisely

Gianmarco