DailyPlay – Partial Closing Trades (NEE, SLV, SRE) – October 14

Partial Closing Trades

• NEE -43.15% Gain: Buy to Close 2 Contracts Nov. 18th $77.50/$82.50 Call Verticals @ $1.12 Debit. DailyPlay Portfolio: By Closing the 2 of the 6 Contracts, we will be paying $224. 
• SLV -161.76% Gain: Sell to Close 12 Contracts Nov. 18th $18.50/$17 Put Verticals @ $0.89 Credit. DailyPlay Portfolio: By Closing 12 of the 36 Contracts, we will be receiving $1,068.
• SRE -315.91% Gain: Sell to Close 1 Contract Oct. 21st $165/$145 Put Vertical @ $18.30 Credit. DailyPlay Portfolio: By Closing the 1 of the remaining 2 Contracts, we will be receiving $1,830. Please note that our target price range of $136 – $135 was not hit yesterday. This trade is therefore for those that did not close out the remaining 2 SRE Contracts yesterday.

Investment Rationale

Yesterday’s intraday turnaround was significant, but not entirely unexpected given our prior call for a mid-October bounce that would likely give markets a lift into Election Day. I’ve had good-till-cancelled bids in the SPY for my own account at the equivalent of my downside SPX target of 3465—3435.  Unfortunately, I missed getting filled yesterday at my desired entry level, but there is a point to this: Have resting bids at where you want to be a buyer, because in real-time it’s a lot harder deciding in a market dive where to be a buyer. Have your buy/sell levels established before the market gets there.

Thursday’s action would appear to have completed Wave 3 of Wave III, despite it not quite having hit my downside target. It will make me look to be a buyer on a pullback into yesterday’s intraday support levels that you can determine by looking at where volume hardly traded yesterday on any name that you are looking to bid on. Those low-traded volume levels often end up being support.

There are several position adjustments I suggest you do today:

Make sure you are out of the TLT trade that expires today
Let’s take 2 of 6 short NEE Nov. 6th $77.50/$82.50 call spreads. We’re up 43% on them so far.
Let’s take off 12 of 36 SLV Nov 18th $18.5/$17 put spreads we have on. (We’re up 162% on them so far.)
Yesterday I recommended removing the final 2 SRE Oct. 21st $165/$145 put spreads if we sold down to $136 – $135 over the next several days. Thursday’s low got down to $136.54 and then it exploded higher to close at $143.03. Let’s take off one of two remaining spreads today after that type rejection of our target.

SRE – Daily