August 23 Weekend Review

It's been two weeks since I put on the latest 3 trades in Z, TSLA, and LNKD. I'll review how each one went.

First up, Z

Point and shoot trade... entered when Z was at the 50MA, which has proven strong support for Z over the past 6 months. Targeted the area where I believe it was oversold, though no indicators showed that, at 145.
Total Profit: 200(1.45) - 200(0.55) = $180 +62%


Next, TSLA

Point and shoot trade... entered when TSLA was approaching its ATH resistance, marked by the upper red line. TSLA confirmed ATH resistance twice, sold off to gap fill, marked by the lower red line.
Total Profit: 200(1.67) - 200(1.15) = $104 +31%


And lastly, LNKD

I'm still in this trade, SEP14 225/230 calls... I was a little early as LNKD was still quite a ways from resistance. They've increased in price substantially, and I'm a bit in the hole right now, -$200. I was pretty sure this thing would roll over to 210, the bottom red line, after confirming the first resistance line, the middle red line. Today was most likely a short covering rally, as volume steadily increased through the day. One might call today a clean breakout... I call it a blowoff. That's because LNKD is still massively overbought, with and RSI reading of 81.65 and 52 week high MACD values. What comes up, must come down. Next week I will be looking to form an Iron Condor to reduce losses if LNKD continues to defy gravity.

Next week will be important for the markets overall. SPX has rebounded from that messy tumble completely, but is having a little difficulty pushing past the previous ATH resistance. As I've stated before, even though I was expecting a sell off, a full on correction is not going to happen. There are too many kool-aid drinkers that are keeping the BTFD train chugging. If stocks fail to break that resistance next week, then LNKD may finally pull back a little.

The dog days of Summer are almost over, and while I still believe that stocks are very overvalued, the market will continue to churn higher. SPX WILL break 2000 soon enough. Though that's arbitrary, maybe it will finally be the last umph before we inevitably come tumbling down the mountain.

The key numbers to watch in the coming months will be PCE and CPI... employment numbers at this point are meaningless. We passed the unemployment % threshold for a rate hike months ago. If market participants think that higher CPI and PCE numbers may cause the Fed to hike rates sooner (THEY WON'T), then we may finally get a meaningful pullback, not necessarily a correction. Also, keep an eye on the VIX floor around 10.30. It has jumped off that floor three times, triggering stock sell offs.