DailyPlay – Partial Closing Trade (NEM) – September 2, 2022

Partial Closing Trade

• NEM -91.30% Loss: Sell to Close 6 Contracts Sept 16, 2022 $45/$50 Call Verticals @ $0.14 Credit. DailyPlay Portfolio: By Closing 6 of the 12 Contracts, we will be receiving $84. 

Investment Rationale

Stocks made a midday rebound and were able to hold on with a day-ending rally to finish Thursday with a gain for the SPX, NDX and DIA. The SPX bounced on its uptrend line from the June low, as well as a TDST Line at 3921. Given the recent rejection of the downtrend line from all-time highs and the bounce today on the uptrend line from the 2022 low, perhaps we get a little reprieve today and next week. However, I do believe that rallies are still meant to sell into, as nothing new has yet changed the bigger macro fundamentals that are not in favor of a general bull market.

Today is the last Friday of the true summer season, and with markets closed in the US on Monday, I’m not apt to want to buy an option today, and not willing to be a seller down here, either. So, it’s like most summer Fridays where we watch and make little tweaks as needed to our overall portfolios.

I do think that we need lighten up on our long NEM Sept. 16th $45/$50 call spread. I’ve held off reducing until now because of the daily chart marking a -13 signal on Tuesday, but with price falling beneath NEM’s uptrend line on breakout dollar strength, gold and gold-related names are under deep pressure. Let’s take half off today.

NEM – Daily