DailyPlay Updates – March 3, 2023

Investment Rationale

Stocks did a solid turnaround yesterday from early weakness, and it was pretty much on cue, as yesterday’s DP suggested a trading bottom was very possible – given the lineup of concentrated support levels between 3950 and 3923 – along with a daily Setup -9 count.

SPX – Daily

We have an XLF long $35.5/$32.5 put that expires today.  Yesterday’s decline in it finally put the $35.5 put in the money – albeit by only a small amount.  I leave it in your hands whether you want to exit early today or hold this late into today’s session to have a chance of those $35.5 puts being worth something to recoup the bulk of the time premium we saw erode from our original purchase price. (I’d not worry about exiting the $32.5 put as it’s some 8-9% away from price.)

Here’s an idea that we might be able to make some quick money on, but as calls are too expensive and selling puts aren’t taking in enough credit, consider buying the iShares Nasdaq Biotechnology ETF (IBB). Wednesday marked a Setup -9 and its Lagging Line bounced right from the bottom of its cloud. At ~$126 per share, stay in our guidelines of approx. 2% of your portfolio for position sizing.  Stop out the long on a close or consecutive daily ones (your choice) under $127.39. Play for a move up to $133.25/.75.

IBB – Daily