I hope everybody had a happy Thanksgiving!
It was a short week, but we had time to close out our bullish Snap Inc. (SNAP) Debit Call Spread, selling a quarter on Monday, November 23, for 132% gains, and the final quarter on Tuesday, November 24, for an 84% profit.
Our total gains on this position, which we initiated on November 18, were 88%. Congratulations on that great trade!
Vertical option spreads like this have an even higher maximum reward than our usual directional call option trades. This is why we took our profits when we could on this spread. Giving such a spread more time would only give us a lesser probability of success if the stock were to pull back.
I have some interesting weekly charts I would like to share with you today. First, let’s take a look at the weekly chart of the U.S. Dollar Index (DXY). The dollar has lost a major support trend line and could move down much lower to the $89 area.
This could have a strong impact on gold. Last week, we had very heavy Dark Pool activity on many of the gold stocks. The gold futures are sitting on a major support trend line around $1,790–$1,800/ounce level. If it cannot hold that trend line, it could fall down to $1,700 pretty quickly. If it does hold, we could see gold rally back up to the $1,900 area.
The oil futures broke out of resistance and could be headed back up to $50.
Meanwhile, I am still monitoring our bearish Apple Inc. (AAPL) Debit Put Spread, which we started up on November 19. Right now, we are still in the middle of massive Dark Pool prints on Apple.
Check out all the massive Dark Pool prints from my scanner on Apple in the last month of trading.
I am still waiting for a breakdown below $114 or a breakout above $121 for Apple.
The SPDR S&P 500 ETF (SPY) has remained over the $350 level, which is bullish, as long as we stay above it. But as you can see in the chart below, we are coming up to a weekly resistance trend line around $365. That will be the key level to watch for a breakout.
Unfortunately, the Wells Fargo & Co. (WFC) December 4 $22 Put Options (WFC201204P00022000) we bought on November 12 will expire worthless this week, unless a miracle happens. Sometimes we jump in too early and get splashed in the wrong direction.
We avoided starting up new trades last week due to the Thanksgiving holiday and the half-day decay combined with the weekend. But now, I am searching for some new trade recommendations using the Dark Pool prints that have come in over the last two weeks.
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Until next time…
Happy tradding,
Stefanie Kammerman
Editor, Dark Pool Trader
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