MOAR $WING

I bought calls this morning dated for August, of the thirty fifth strike for forty five cents.

$WING to $40.

OA

I’ve been trying to figure out “the pain trade” here for the last few hours. The hard part is trying to figure out what the majority of participants did into today’s tape.

Part of me thinks that if you bought on Tuesday, you sold today. Especially given the headlines and news flow. It was the worst its been in quite some time.

In After Hours with Option Addict we referenced the $TICK extreme reached in Tuesday’s reversal (1489). You’d have to go back to October 8th 2014 (hat tip @AnthonyBrown) to find a similar reading, given the recent market structure. In fact, take a look:

In both cases you had a weak high met with sellers that traded down into a choppy range. The day the lows were breached, you had an extreme (identical) $TICK, followed by a total giveback of those gains the following day.

In 2014 the outcome was a week long flush that brought panic into the streets. I’m not suggesting this is the outcome, but if it is, it will start tonight. I’ll be up trying to catch it in the futures market.

I also spoke with Bluestar at length today about this scenario, and my long term 98-00/2014-2016 analogue. He’s been holding steady into this weakness, and has been looking for a washout. Despite this weakness, I still can’t rule out the melt-up scenario next year. Every asset class is trading the same way they did from 10/1998 into 1999. I will do a post on this later this week so that you can see how that road map is coming together.

I nibbled a little today with a small position in $SPLK and $GOOGL calls. Still like $WING from last week as well. This is my top conviction long here, if you are looking for something that will hold up well in this tape.

Be careful out there,

OA

I’ll outline this idea again, for those of you whom were unable to see what I loved about this chart. I’ve been telling my After Hours with Option Addict members that this set-up is identical to how $BABA and $TWTR traded post IPO.

As you may recall, those were some of my top conviction ideas at the time, and we absolutely killed those stocks, catching all of their explosive movements about a month after their IPOs.

http://ibankcoin.com/option_addict/2014/10/24/the-baba-top/

http://ibankcoin.com/option_addict/2014/10/21/baba-beautiful/

This is my top idea here at the moment. I bought two stacks of this making this a top 5 holding. I think this has a ton of upside from here.

More later,

OA

We laid out a plan last night in After Hours with Option Addict that never seemed to materialize today. If this move holds, specifically in the Russell, I think the volatility might be here to stay for some time.

I haven’t done much in the last two weeks aside from buying shares of $WING and calls on $SPLK that I sold this morning for a loss. I kicked out a few stock positions this morning to raise cash as well.

If this is the norm for the near term, I’m going back to day trading, and going to work my way down to fewer positions trying to play both sides of this tape.

If we are a ways from the bottom, I am watching $NFLX as a short here based on structure and still like $FB or $GOOGL as a long.

OA

I picked up July 70 calls for a quickie in $SPLK.

Still got my eye on $GOOGL and $FB.

OA

I passed up doing much last week in order to be ready for tomorrow’s move lower. I’ll be able to unload my $VXX, and hopefully catch an oversold signal tomorrow.

I don’t get home til about noon ET, but I am likely going to go for some $SPLK and maybe $FB or $GOOGL if things come together as discussed last week.

Stay frosty,

OA