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4th Feb, 2021 - Update on current positions.

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Written by   33
2 months ago
Topics: Trading, Gme, Doge, Bitcoin, Trader, ...

Diary of a FT trader: Part 1

19th Jan 2021 - Zealous "Risk On" Market May be Ending in Stocks, Crypto and Currencies.

29th Jan 2021 - GME, DOGE, The Meme Market and Upwards Trajectory of Volatility

This post is to give an update on my analysis, forecasts and trading positions given in parts two and three.

S&P500 Analysis and trades.

Previous analysis and trades;

"Trades I am making on S&P500

I've closed all my buy positions in assets tied to the S&P500. This has been something I've done over the last months, progressively as price has risen. Today I am starting to take positions betting the market will fall, or at least slow down in the move up.

I'm selling call options with an expiry in near the end of March. To protect my risk I am using call spreads. I'm selling a call for the 3700 strike and I am buying a call for the 3850 strike. The price I entered is 3786.

I am also buying a cheap OTM put for the 3500 strike. Also to expire near the end of March."

-Posted 19th of January 2021.

Since posting the S&P500 is up a little bit. My analysis remains the same. I am comfortable with my current positions even though the market has moved a bit against me, I sold options specifically because I thought this could happen and I wanted to make a move that gave me some time to be right.

In my last post I further said;

"I'm also considering a short in the futures market, but I'll wait off on that for a while until I can see if the buying momentum really has stopped. With options I have a lot of time to be right but with futures if I'm too early betting on the market falling I will most likely lose, and can lose multiple times."

Positions I am taking in S&P500.

I am now going to take this short position in the futures market. I think the risk is a bit lower now and there's a decent opportunity to sell S&P500 at the current price of 3835. I am shorting this at this price. My stop loss is 3920 and my target is 2900.

GME previous analysis

In my last mention of GME I pointed out how we were seeing bubble like moves in the charts as manic optimism flashed across the headlines and social media forums. Here was the current chart at the time of my last posting.

Since this time the bubble pop has completed.

In line with  Jean-Paul Rodrigue's "Phases of an economic bubble", as mentioned in the last post.

Positions I am taking on GME.

It might make me sound clever if I say I seriously considered shorting GME at $400 right before the crash, but the truth is I also thought it would be a great idea to short GME at about $40 on the way up. In both cases experience told me to just hold off and wait for something to happen to make it clearer what to do.

Now GME is down to $90 I think we're completing the final drop and are in the "Despair" part of the move. What we usually see here is the price flattening out a bit. Stabilizing. Steadying off a bit. Picking up a sideways trend. If this happens, there should be a crash in implied volatility, and that makes this an options spot.

I am selling cash secured puts on GME expiring at the end of March, April and June. My strike prices I am selling them for are $45, $50 and $70. If I get assigned I will hold the stock but set a stop loss on it at $30. I am looking for the drama in this market to stop and my options an IV/theta play.

Bitcoin analysis and trades update.

Previous post;

"The explosion in BTC to $40,000 reminds me in so many ways of the first pop to $20,000 that was proceeded by a big correction. I sold my BTC holdings in the $33,000 to $35,000 range while it was going up. I tried to short it at $36,000 but took a quick, small, loss on that as it spiked to $40,000.

Bitcoin is currently testing a trendline. Whether it can hold or it breaks could be important to the near term price movements. If the trendline holds, we might see a butterfly pattern on this (Like we have on the S&P500)."

-Posted 19th January, 2021.

Chart at the time of posting.

We broke the trendline I mentioned and this was followed my immediate downward momentum. We've now moved up a little bit but this might be setting up a stronger fall in the near future. We're currently trading around the price I have my short positions entry.

My analysis on BTCUSD remains unchanged, but at this point I'll add I think the bite of the bear is a bit closer now that it was when I last posted.

Dogecoin analysis and trades.

In my previous post I spoke about how Doge was showing the signs of a bubbling move. Here was the chart at the time.

I think a move similar to the GME one is coming. A second drop. See more about how I see similarities in these charts here.

Trades on Doge

I am shorting Doge at the current price of 0.054. My stop loss is going to be 0.067 and my target is 0.027.

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Written by   33
2 months ago
Topics: Trading, Gme, Doge, Bitcoin, Trader, ...
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