DailyPlay Update – May 24, 2023

Investment Rationale

Stocks took it on the chin on Tuesday, as concerns grew that the debt-ceiling limit is closing in and there’s still no resolution. The clock is ticking and investors are running out of patience – let alone respect – for our elected officials who continually politicize every issue they’re asked to vote on. It’s very disheartening.

I’ve said it before and I’ll say it again: committing substantial new capital to the markets now – ahead of the debt-ceiling deadline and upcoming early-June FOMC rate announcement – all while rates are moving higher – is, frankly, an exercise in futility. Day-to-day headlines will sway traders in either direction, and they will come fast and furiously till the June 1 deadline and then again from the Fed on June 3rd.

No new trades today as we get FOMC minutes at 2pm ET. And as a note, yesterday we saw the OIH close at $265.65 – about a half dollar under where it would break out above the downtrend line and get us into a bullish trade. Thus, we did not enter selling the DP put spread on Tuesday, but could today IF we see a close above $265.20 that is also preferably, an up close (the more above, the cleaner the potential breakout).

OIH – Daily