DailyPlay – Partial Closing Trades (SPY, CNC, SMH) – October 31, 2022

Partial Closing Trade

• SPY – 80.67% Gain: Buy to Close 3 Contracts Nov. 9th $365/$361 Put Verticals @ $0.29 Debit. DailyPlay Portfolio: By Closing 3 of the remaining 6 Contracts, we will be paying $87. 
• CNC – 89.47% Gain: Buy to Close 3 Contracts Nov. 18th $75/$72.50 Put Verticals @ $0.10 Debit. DailyPlay Portfolio: By Closing 3 of the remaining 8 Contracts, we will be paying $30. 
• SMH – 65.15% Gain: Buy to Close 2 Contracts Nov. 18th $176/$168 Put Verticals @ $1.07 Debit. DailyPlay Portfolio: By Closing 2 of the 4 Contracts, we will be paying $214. 

Investment Rationale

I am in Orlando, FL today, speaking at the Money Show conference. Tony will be hosting the 8:45am weekly Technical Market Outlook in my place, and will be sharing with you my thoughts on the market, including that my belief that the SPX will hold up through next Tuesday’s Election Day, with a pullback going no lower than 3680 from the current 3901.

However, the SPX is also right up against its first real resistance level at 3908 – the weekly Base Line from the cloud model. It would not surprise me to see a pullback today (and I am writing this on Saturday afternoon, so I have no idea how futures are going to open and trade on Sunday night).

SPX – Weekly

As I mentioned on this past Friday’s Daily Play open trade position webinar, I said I would likely take some profits today in bullish plays we have on. To that end, let’s look to do the following:

• We are short 6 SPY Nov. 9th $365/$361 put spreads that expire a week from Wednesday (the day after Election Day). We are up 81% on them so far; let’s take off 3 today.
• We have 8 of 12 short CNC Nov. 18th $75/$72.5 put spreads remaining, having lifted 4 of them on Friday. We are now up 89% on the balance.  Let’s take another 3 off today, leaving us with a balance of 5 spreads.
• We are short 4 SMH Nov. 18th $176/$168 put spreads. We’re up 65% on them.  Let’s take 2 off today.