We sat down with Trading Floor member DMAX to see what he has been up to thus far this week, and where he is looking as we approach the FOMC Minutes tomorrow. As DMAX put it, “we might be setting up for a big squeeze.”
What have you traded so far this week?
“I started closing some $GOOGL put spreads which were carried over from last week”
The $GOOGL put spread which DMAX is referring to is the $520/$517.50 spread which he opened for $.17. While DMAX has closed some of the position for $1.75, he made sure to note that with the market’s odd weakness, he is looking to close the rest for max profit. In other words, he is looking to close the position for $2.50, or the amount between the contract he owns and the one he sold.
“Once $GOOGL couldn’t break Friday’s close yesterday, I sold some call spreads on it.”
This trade was again based on DMAX’s 6% Rule, which we will be explaining soon in a video. The call spread was the $525/$527.50 spread. DMAX also closed a $BFWD position so that he could focus more attention on his $GOOGL positions.
“I’ve seen some other opportunities, but I decided to sit out entirely.”
What are you looking for the rest of the week?
“I like the way $BABA looks, and $LNKD is showing strength.”
While he was quick to note, again, that the Social Media sector as a whole looks strong, $LNKD is clearly at the head of that pack. DMAX also felt that we could be setting up for a big squeeze off of tomorrow’s FOMC Minutes release. Now that everyone is firmly entrenched in a short bias, tomorrow could provide a violent rally as DMAX saw signs of $TLT looking like a short.
“Maybe everyone backs off tomorrow, and we rally.”
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