DailyPlay Updates and Closing Trade (PEP) – May 6, 2022

We’re still short a PEP May 6 $165/$170 call spread that expires today.  We will cover this spread on the open to avoid exercise issues. The spread closed yesterday at $4.13.

In my 40+ years of being in the market, I don’t recall seeing a 26-hour roller coaster as we saw since Powell’s Wednesday press conference. Certainly not in percentage price movements in the stock indexes. It’s been truly amazing, and it’s why I’ve urged you to cut down on how much trading you do and what your new trade size position is. Clearly, it’s treacherous out there and your focus needs to be on “long-term survivability”. It’s the only thing that matters in a super high-volatile environment.

The key weekly SPX cloud level I’m focusing on is 4115. In my view, any Friday close beneath there ups the odds that the pressure will continue for what could ultimately lead to my 2022 downside target of 3617. A QQQ close today beneath $309.62 likely leads it to a new leg down, for it too, especially if the SPX breaks its level, too.

No new trade idea today. Until we see where these two indexes close, we’re not looking to put on new exposure in either direction. 

I’m glad it’s Friday, and am looking forward to a nice weekend which will end with me in Las Vegas on Sunday for me to speak there on Monday afternoon at the Money Show. If you plan on being there, stop by after my presentation and say hello. Happy Mother’s Day to all.

– Rick Bensignor
Chief Market Strategist

Closing Trade

• PEP: 79.57% Loss:  Buy to Close 8 Contracts May 6, 2022 $165/$170 Call Verticals @ $4.13 Debit. We will cover this spread on the open to avoid exercise issues. The spread closed yesterday at $4.13. DailyPlay Portfolio: By closing 8 Contracts, we will be paying $3,304.