Hola amigos, back to work this week. Short week, 3.5 trading days and a great holiday in the middle, I hope you all had a great and safe 4th of July party with lots of food, music and family. Argentina’s Independence was signed on July 9th, 1816 so I guess we can say it’s a double celebration week for me. 

Not fireworks though, dogs suffer a lot with them and nurses and doctors have a miserable night taking care of burnt people that night, so I’m kind of against them although I have to admit that I used to enjoy exploding stuff…a lot.  

Speaking about fireworks, what do you think about June 25-26? You got scared, didn’t you? Uh? I bet you thought the recession was finally here, all your trades were gonna go against you, a blood-bath was coming…the market (SPY) went down a little over 1% around noon. So you probably went to grab lunch and all your alerts started popping, or even worst, your stop losses triggered.  

See, even though we plan our trades for the upcoming weeks/months and we look at medium-long term charts to make decisions, unfortunately our emotions are only charted in a 15min chart. So in a day like June 26th, or Feb 6th (although that one was a little rougher) all we see is red, blood, apocalypses…and quite frankly, it was only a small dang retracement…check it out by yourself in the SPY weekly chart. I’m sure the upcoming edition of Master Trader will use this chart to illustrate a perfect by-the-book bullish trend. 

Where am I going with this? I am not quite sure to be honest…but it is important to have sometimes a cold mind or cold fingers if you trade with your phone. Stop, think and zoom out a little bit. Try to look at the big picture and use the same PERSPECTIVE you used to plan and place the trade in the first place. Re-assess your plan…did something change? Am I deep in-the-money after this move or it just looks nasty on my daily P&L on my phone screen but actually my positions still look solid? It’s hard to control our 15-min emotions in a down day, but we have to. I have not totally mastered it yet, but rest assured that February 6th showed me the way. So this time, I replaced paranoia with excitement and told myself “Franky, babe, all the market is doing is showing you the way, giving you a nice lil’ buying opportunity, AKA bullish retracement, so next week you can write your blog and instead of showing your zombie kales, you can have great picks. So stop bitc.. Complaining and focus” 

And here we are, a channel-bottom-higher-swing-high later and with two very strong days this week. And although we know SPY has struggled lately to break out of $280, the guy keeps trying. And that’s the spirit, right? Eventually it will achieve his goal and, hopefully, let us make some money…that or it can all go south. Period…but we will entertain the first scenario in today’s blog. 

So, without further due, let’s take a look to the puppies that Bob gave us a few weeks ago and cherry-pick some promising set-ups for next week. Today I am not going to split them between DIRTY and CLEAN, just because I have not made my mind with some of them just yet. Let’s say that there are a few still in a probation period. For now let’s just call them…The New Kids On The Block. 

WARNING: We are surfing the earnings wave with pretty much all of these picks. To avoid being repetitive, I will say this once and only once and it applies for all of them. BE CAREFUL!! Don’t drink and drive, definitely don’t drink and text your ex, and don’t ride your trades during earnings. Unless is a long term investment, or you want to get assigned, or is a purely earnings play. None of them covered in this blog today. If you wanna know what can possibly go wrong, shoot me an email and I’ll share with you a real-life example. No Bueno. 

Let’s start with the oldies… 

TSLA 

Last few days were nasty, no doubt. A lot of down pressure and selling volume. But today it showed a good doji candle over $300 and the 50 MA, which I think it could be a good sign of potential swing. Also, there are two very strong supports below ($300 and $280) so a bull-put below those levels can be an option for next week. The lower the better, max .20 delta. 

AMD 

One of my favs for this week. We have been waiting for a retracement after breaking the $14 level, and here we have it. It did not retrace all the way back but it looks clean to me, and it showed a lot of strength today before closing. Let’s see if it follows through. 

X 

It’s a corp. I have a long straddle on which it gained value due to IV picking up, but it lost value due to theta. Today is literally even. I’ll give it a few more days otherwise I’ll dump it and wait for after earnings to play it with naked-puts. 

FSLR 

I still have a drawing of the channel it broke three days after my failed bull-put attempt. This one has been corping too…played it with a long straddle but nor price neither IV moved so I dumped it today. If it stays the same post earnings I like naked-puts or bull-put spread below $50. It would be nice definitely like to see it moving north of $55 post earnings. But remember, we still make money if it goes sideways! 

FCX 

Kinda nasty, I know. But I have a feeling that this one is cooking something. Four candles ago it looked like a perfect K.O.D. pattern, but somehow it went back up and it’s been holding above $16.5ish which is not only a strong support but also the merge of the MAs. It could move above $18 after earnings, creating a good opportunity for naked-puts below $16 support. But right now, me no touch it. 

USO 

I am not an USO trader but this retracement looked so clean that I had to show it here. Not much to add to the chart and it also has shown some IV lately which means finally some premium. If you want to play commodities, USO looks nice upon confirmation of swing at support. 

UNG 

I added this puppy in honor of Big ol’ Bob. I know he traded it a lot last year and I’m sure he’s waiting for one or two more red candles to swing trade it or sell naked-puts on it. It’s in a pretty consistent upward channel and, as long as premium is decent, I might play it in a few weeks.  

Now let’s go with the New Kids On The Block… 

I picked just a few of the ones out of Bob’s list, mainly based on chart pattern and options availability. We’ll dig more into that list as we move forward.  

REGI 

This one is a work in process, but it is developing a good high base though. Let’s see if it tests the $16ish support and bounce back. So far pop-corn on the sidelines for me, but the chart is bullish and if that alert I have triggers, I will either buy shares or sell puts below support. Let’s see how it evolves. 

ITRI 

I have mixed feeling with this one. If you look at a weekly chart, it could look as a K.O.D. pattern maybe. But in a shorter time frame, I like the round bottom and how is slowly but steadily moving up. Today was a strong day and although it has a strong resistance at $65, maybe a bull put or naked puts below $55 can do it. If it keeps going up and breaks above $65, it will definitely get my attention. 

EXC 

Nice bullish break out of $41.5. I missed the first little retracement so now I’m basically waiting for a breather, a pull back towards support and swing. If so, I will be looking to issue maybe a bull-put below $40, if possible. Not a whole lot of options on this one, but probably enough to play it. 

Now, the idea is not to go and trade the 10 instrument presented today, folks. I mean, heck, you can if you want to but it would probably mean an ultra-bullish attach to the market…your call. But usually, you would trade 2 or 3 maybe, another couple of them next week? Some of it will depend on how much you like the chart, some of it on your available trading money. But for the ones that are undecided, a great tool to help you make the decision is the Tackle Trading Theta Research spreadsheet. You can find it HERE. Plug all your candidates there with the information on each one, and it will automatically show you indicators of how good or bad the trade looks like. It’s pretty awesome and it helps a lot, you can download it for free in the link below. 

Hopefully, we can all play some of these trades and accumulate some profits. In the next blow, we will go over Phase-2 of Market Garden and go spend some of those profits and build some materials to build the garden. The idea is to accumulate both profits and tools during July, and have the garden up and running sometime in August once the Texas heat is on a peak, and hopefully a little more forgiven by the time my plants start to grow. 

Have a great week and remember… anybody should win the World Cup, except Brazil (sorry Jessica and Christian…)  

Cheers,  

Franco.