12/23 WATCHLIST + MARKET OUTLOOK (Warning!)** THIS IS PURELY MY OPINION AND I AM NOT LIABLE FOR YOUR TRADING DECISIONS **
Very interesting day today where even though we GOT the stimulus bill, the market did not seem satisfied. We remained under the major support (now resistance) trendline in red, which has served as support since the coronavirus low. There are 2 reasons this may have happened: (1)There is a big possibility that the market had fully priced in a large stimulus package, and is now asking "ok, what else can you feed me?" OR (2) Investors are scared of the covid mutation making its way through Europe.
Regardless of the reason, it is a particularly dangerous time for this to be happening because if you look at the put-to-call-equity ratio, it dropped to pretty much all time lows as soon as the stimulus bill was announced. This means that market participants are overleveraged on calls and expecting the market to continue going up (being greedy). While this is not a sell signal by itself, if the market starts to correct, we could see a big long squeeze as investors panic and offload their long positions. I would save the PCCE graph to your watchlist and check it frequently. It is essentially the chart that tells you when to be greedy vs. fearful according to the old adage: "When others are fearful, be greedy. When others are greedy, be fearful." A normal PCCE level is roughly indicated by the 2 white lines I've drawn on the graph.
My bias going into tomorrow is neutral. However, the market doesn't care about my opinion and will do what it wants, and I will trade what it gives me!
The watchlist from yesterday went absolutely nuts. Highly suggest finding your favorite setups and focusing on those. Don't worry about missing a play! There are opportunities every single day.
WATCHLIST 12/23
Recall that my trading style is short scalps and intraday options. These are not swing levels.
ZM calls over 409.1
BABA puts under 255.4
BLNK calls over 49
PENN calls over 96.65
PYPL calls over 244
SQ calls over 243.4
MRNA puts under 123
NVDA calls over 531.8
WKHS calls over 23.45
TWLO calls over 374.7
NFLX calls over 527.6
