Friday 9-8-23

Greetings Money Tree Compounder (MTC) Traders!

I am NOT placing new MTC trades today.

 The markets have been in quite a bit of turmoil this week; and it was kicked off with a Bear 180 SGB on Monday. Tonight is the Chinese inflation report and that could have a big impact on world markets next week taking US markets in their direction too. Next Wednesday is the core CPI then PPI on Thursday which could be fuel to the fire especially if China is negatively impacting us on Monday. And of course we have the FOMC statement on 9-20-23 which will be the biggest catalyst to create a stampede or euphoric erruption for the rest of this year.

 The previous SGB zone that caught my attention resulted in a nice drop; however, it was not as dramatic as I anticipated and my Lotto Trade PUTS did not pay off ☹ post Powell comments at Jackson hole resulted in a good sell off; however, it was not as fast and dramtic as I was betting on and my deep OTM PUTS never paid off ☹. Then when the Jackson Hole FOMC Economic Symposium comments from Powell caused a whipsaw effect, I was not able to fully capitalize on the move. However, my MTC CALL trades all hit their 100% ROI targets and beyond.

 This time I did some more research and now that SPY is closing almost exactly at the last time it actually “gapped down” from the Covid drop back in 2021 (olive green zone) and then the FOMC rate hike, then we could get a double whammy from the CPI reports starting tonight.

 The setup for a major move down is here (multi SGB zones), the motivation for panic in the wall-streets is here, September is historically a Bearish month, the expctation of a major move in retail investor minds is imminent and recent news of Buffet dumping $8 Billion in stocks and Michael Bury, of Big Short fame, betting $1.6 Billion shorting the QQQ and SPY has most investors in nail bitting mode. So, is China’s CPI report going to be the shot-heard-round-the-world and we see a major correction or will it be the clear sign of a postive change from all the Fed’s meddling with rates and QE restrictions et al. and the bottom for the rest of the year is in place?  

For me, I plan to keep buying my Lotto Trade PUTS up to 10 handles OTM, and I really do not care where markets move when it comes to placing my MTC trades. Over the past three years of implementation with MTC (formerly Stimulus-Compounder) there has been several major moves in the markets and the strategy just kept on piling up the profits!

 The challenge at this particular moment is which side benefits and which gets the beating. Well, if you are just starting out with your MTC combine, and only playing CALLS, then you may want to sit this week out and see what reaction the markets get next week before you jump in on the long side; otherwise, if you are doing both sides (and you should be to maximize your long-term results) then apply the proven formula and keep on moving down the road to the land of 6-Figure profitability!

For me, I am going to wait until Monday before I decide which MTC trades I will place.

 http://www.optionradio.com/pages/2023%20Strategies/2023%20MTC/2023_MTC_PP.htm

 Here is the chart from the 2021 FOMC gaps along with the news of the day:

 This was the news back then when the SPY sold off from a SGB zone and then gapped down the following week after the FOMC rate hike news was released:

 https://finance.yahoo.com/news/stock-market-news-sep-13-125012459.html?guccounter=1&guce_referrer=aHR0cHM6Ly9kdWNrZHVja2dvLmNvbS8&guce_referrer_sig=AQAAAKF0_WTXTnBy76LVCGlySltVMW0Kr5cMdoh-11EVlKxf7iBAGhCalZ52h_ZGGZM7SUL6QaFHBWLk9xuOVCJf_xCmceYPXKc0B7BOiu4Uc_JCjSsj6u1OBhpINjcWIcxL_gg08TXRWQesgg7RVtRy9HePlCR3mkACmmd_1jTd0hsM

 on 9-21-22 Powell raised interest rates and makets plunged:

 https://finance.yahoo.com/news/stock-market-news-live-updates-september-21-2022-095724724.html

 History repeats itself in the stock markets and we just have to be positioned to exploit it when the moves come. Depending on your particular trading goals, risk tolerance and strategies traded, you just need to stick to the plan and never let FOMO control your investing decisions! —no matter the missed moves, there is ALWAYS another one coming 😉.

 If you are doing MTC then stick with the formula: 

1. Max spend is $3.00 or less

2. Max OTM strike is 5 but 3-4 is the “sweet spot” for quickest results.

3. Expiration is 11 or more days depending on pricing of the options—more time is always better

4. If you cannot meet these criteria, you DO NOT TRADE, but “fish” one strike lower and 50% of today’s prices for Mon/Tue’

5. Set your GTC orders to sell for 100% ROI, and if you are compounding, then layer some exits for more ProfitsUP!

6. Log your trades on the spreadsheet and let it tell you when to increase contract loads. NEVER chase, mix between CALLS / PUTS or flucuate contract loads; otherwise your results will be heavily impacted and the journey to the land of 6-Figure profitability greatly extended.

 If you are doing Lotto Trades: 

1. Look for strikes inside a 10% move.

2. Pay no more than $0.20 cents per contract with $0.10 being the “sweet spot” for Moby Dick gains.

3. NO stops, Lotto Trades are all or nothing and 500% ROI is the minimum target to maximize long-term results.

 NOTE: Lotto Trades are always a “spend” and will draw down bankroll; however, when the winners come, the profits wipe out multiple losers and advance your overall annulaized results as you begin to compound; therefore, if you are starting out, I recommed you stick to MTC and wait until you have profits compounding so you can make spends on Lotto Trades and not draw down on initial trading capital.

 If you are doing Super SPY-X day trades: 

1. Follow the proven formula and take your 52% ROI proifts on the morning trades until you begin to compound, then you can layer exits and leave some on all day to catch those Moby Dick profits!

2. No stop losses on these trades.

3. EOD requires a lot more agility to place orders and make fast trades; therefore, I highly recommed you do EOD at TD Ameritrade using the Active Trader with preset templates, or you will have challenges getting orders in fast enough when layering. If you are at other brokers, then start placing orders at 12:30 PM PST to assure you have enough time to get them in place before the 12:50 PM PST buy/sell imbalances are released.

4. You must target 200% ROI with EOD SSX trades to make the math work and cover losing trades as winners come along. Then, when the compounding begins, you can layer exits to maximize the parabolic days that will come.

  Next week I will let you know when I start placing orders or make trades with MTC.

Profits UP!

Frank

The don Franko

support@optionradio.com

www.Optionradio.com

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Sent: Tuesday, September 20, 2022 3:32 PM
Subject: Stimulus-Compounder trade ideas for 9-23-22 and 9-26-22 expirations! CORRECTIONS

 Greetings Traders!

 I was reviewing this email and caught an error that needs to be corrected.

 I suggested that PUTS could go parabolic on the VIX and that was supposed to be CALLS, so if you are looking for Lotto Trades on the VIX, be sure to buy CALLS!

 Hopefully, we do get a massive move tomorrow and into Friday; otherwise, the opportunity for a market moving could begin next week when the FED tapering is cut, and with goes the liquidity that has been supporting the markets…look out below 😉.

 I have begun buying my positions for Tomorrow and into Friday:

 I had 30 contracts on the 370 PUTS from yesterday that I paid $0.14 and took a quick 100% ROI this morning hoping for a dip so I could buy in again and get on even more. However, the SPY did not pull back enough so I had to settle for a smaller spread trade and I plan to add more size and strikes tomorrow and then trade SPY/QQQ shares /NQ /ES futures after the news release et al.

 Hope you have a great trading day tomorrow and we may just get a Moby Dick opportunity with Super SPY-X too!!

Updated: 9/18/22

Greetings traders!

 Is the selling over yet??

 Well, that is a loaded question indeed, and this week (Wednesday 8/21/22, which is a “Fibonacci sequence day”) is the FOMC rate hike announcement. The consensus is expected to be a 0.75 basis points hike and last Wednesday’s surprise CPI report created a massive slam-down on the markets, so any more surprises could be the nail in the coffin for the Bulls for the rest of this year… maybe even into 2023—especially if Chair Powell decides to go a full 1% and super-shock the markets.

 What will be the deciding factor where markets head into the end of the week are his statements and then the press conference that will determine how the multi-billion-dollar fund managers will proceed—we need their capital infusion/activity to move the markets and pump the volatility up.

 I expect a potential parabolic move starting Wednesday post announcement, so I will be fishing/buying Lotto Trade (CALLS and PUTS) up to 15 handles OTM starting Tuesday for Wed and Fri expirations—be sure to fish for your entry prices and keep your MAX spend at $0.20 or less when playing for Lotto Trades.

 As for the Super SPY-X strategy, we keep applying the proven formula every Mon-Wed-Fri and cash in week-after-week no matter what direction the markets are trading. 😉

 There was no trade entry for Stimulus-Compounder on Friday, so once all this rate news is out, I will be trading more aggressively once the volatility settles back down.

 Ok, so how do we determine where the price of stocks and indexes will rise or fall?

 That my trading friends are discovered in the SGB zones—and we have multiple ones to decipher.

 When you are trading for Lotto Trades, you want to maintain your strikes slightly above the SGB zones for PUTS and slightly below for CALLS to get optimal results and/or end up ITM by expiration.

 Looking at the charts below should help you pinpoint optimal strike zones.

 There is a lot of noise on the DAILY chart, but the trend is decidedly down, and the close Friday is testing the wick from the last SGB, so if we get another continuation gap lower Monday, I expect the SPY to head to 350-355 by Friday on bad news or back to 405-410 on surprise news.

 The WEEKLY chart below really tells the story, and there are now 2 RED DOTS, so get ready for some more massive moves!!!$$$!!!

 This week produced a large bearish engulfing (https://www.investopedia.com/terms/b/bearishengulfingp.asp) candle stick pattern on volume, so my initial targets on the SPY continuation down is 350-355—which will intersect with the 200MA.

 HOWEVER, markets always want to go up, and retail investors have been decimated, so if the powers that be are done selling/taking all their money post FOMC, we could see a massive squeeze higher; therefore, you can’t bet the farm on PUTS or CALLS, but you can exploit short-term moves.

My upside target on the SPY is 405 – 410

 The long-term MONTHLY chart shows the SPY is likely to fall back into the 2009 (post-2008 financial crisis) bottom channel around 350 - 355, so I am watching closely for a “red” and/or “orange” dot to appear on the monthly chart.

 If you are trading the SPY day-to-day, a typical high-volatility move is 10-15 handles, and if there is panic in the streets, 15 – 20 before the markets could hit day limits and trading stops/halts are turned on.  However, if there are day-to-day “gaps”, then no trading stops are triggered and it can drop (initially) as far as the Market Makers let it,  so you need to be prepared, proactive, and NOT reactive, or simply wait until an event horizon day happens and then start trading again—it takes an iron stomach to trade volatility hurricanes.

Speaking of volatility, let’s take a look at the CBOE VIX index:

 Friday the VIX closed as an SGB inside of previous SGB zones, so you can expect a BIG MOVE anytime now.

 The last time the VIX went nuts after a SGB was on 2-28-20, and a month later, launched into a multi-week parabolic move—there were “red” dots that proceeded that move too.

 If the VIX were to make another move like this, the OTM PUTS options could go 100X!!!

 The weekly VIX chart is set up for a launch higher. Last time, it took two weeks to peak once the SGB zone was breached.

 Looking at the MONTHLY chart, there is currently a SGB with ORANGE dots….Let’s get ready to RUMBELLEEE !!!$$$!!!

History repeats, and we are about to have a catalyst event horizon that could create this scenario again.

 In 2008 the SPY dropped down 38 points from 119 – 80.92 (-32%)  in two months, and then to 67.10 (-43%) before bottoming 6 months later.

Then in 2020 the COVID panic started a parabolic move after VIX broke through an SGB zone that took a month to the peak!—it was also preceded by “red” dots.

 This time the SPY dropped down 119 points (-36%) from 335 down to 216 in a month.

 So, if we get a similar move in the coming weeks to couple months, the SPY could drop to 250!!!

 If you have limited capital DO NOT CHASE, there will be plenty of opportunities after a massive move.

 If you want to participate/speculate and get in cheaper, then start looking for VIX BEAR CALL DEBIT SPREADS under the 80 strikes and/or SPY/QQQ BEAR DEBIT PUT spreads around the 300 strikes.

 Hope you have a great trading week!

Updated: 7-24-22

Greetings Traders!

This week we have some strong earnings reports and the FOMC interest rate decision that is sure to move markets. If you have been participating with the Stimulus-Compounder strategy then you have made some very impressive gains in the past 6 weeks on the PUT side and now we have some traction starting on the CALL side. Either side you chose this year, you can see the massive potential so it matters not if the markets move up or down, we just need them to move ;-).

Lets dive into the SPY daily chart for some clues on this weeks potential.

We are currently trading inside a double SGB zone, and if the FOMC news negatively impact the markets, then I would expect a collapse of the current Bear Market Bounce and drop the SPY aggressively below the 383 Bear Market line-in-the-sand. Heck, if Powell goes for the markets jugular and surprises with a full 1% hike, then we could see implosion down to the next SGB zone which could turn into quite the Moby Dick Lotto trade...something to consider.

If they surprise the markets with a positive metric, then I anticipate the next rise in the SPY is the SGB zone and the CALL strikes up to 416. 

This weeks earnings starts Monday with GOOGL which now trades post 20:1 split and I am thinking even if they report bad numbers, the powers that be will not let this stock drop under $100 per share. The challenge this time is OTM options are going to be very expensive with 5 days to expiration and with 20x the volume of shares, it will be very difficult for this stock to make much more of a move than the current MMM of +/- 6.77. Therefore, looking at the $100 PUT strike they currently trade at $1.10 per contract and the 115 CALLS also trade at $1.20; which makes it expensive to do a straddle...I would wait for the results and sell credit spreads post earnings.

Wednesday is META and the MMM is +/- 19.58 so there is a good possibility for some Lotto Trade action on this one.

Thursday is AAPL which could be a good Lotto Trade opportunity since Friday is expiration. The MMM is currently at +/- 4.79 so I plan to look at this one Thursday for a Lotto Trade.

Of course the FED announcement Wed will have quite the impact on earnings, so any positive results coupled with a bullish market reaction, can produce some nice Lotto Trades.

Profits UP!

Frank

The don Franko

Updated: 6-25-22 12:00 PM PST. 

Greetings SC Traders!

I know it has been a while since I have updated the website, but I've been busy developing the Super SPY-X strategy and want to make sure it can produce the profits I know it is capable of on a consistent basis!

If you have been trading the Stimulus-Compounder strategy as I have taught it, then you are definitely ahead of the markets and have made some serious bank on the PUT side. What is amazing about this strategy is you can make it work in up or down markets and have a lot less stress vs. being a holder watching your pseudo riches get wiped out.

It has been said that timing the market is practically impossible vs. time-in-the-market, but who has that much time on their hands to wait out another decade or two. That is why we trade the trends, apply the proven Stimulus-Compounder strategy and compound our way to that magical land of 7-Figure profitability!

Lets take a look at some interesting history to help us discover what the future can bring!

The stock markets are governed by the Fibonacci sequence and it is NOT a coincidence major moves, events and anomalies happen in direct relation to it—in particular, you can get precise predictions utilizing the 8, 13 and 21 Fibonacci cycles at all time intervals.

This monthly chart clearly defines what I am talking about; and you can get some solid insight to either protect what you have left; or benefit by acting on what you can clairvoyantly know if you learn, trust and respect the Fibonacci sequencing!

I have highlighted two distinct trading channels, and believe you me, multi-billion dollar hedge fund managers MUST trade on long-term trajectories if they want to stay in business.

History repeats, and if you look over that history, you can see the markets were on a very nice and consistent rise for over a decade until the unforeseen plan...I mean pandemic arrived creating an unprecedented rise in stock price valuation's (due to massive printing of FRN's) that is currently being dismantled in a systematic fashion similar to 2008.

The markets have been decimated over the past six months and millions of investors (HODLers, Crypto YOLOers and never Bears) accounts have been slammed if not utterly destroyed in the wake of the Federal Reserves vampirous thirst  to curb inflation (that they created ironically) before that inflation goes hyperbolic and inflicts panic in the financial streets; which will give rise to the SILVER/GOLD bug bullets...lol...that will annihilate the Fed and their cabal on the people's commerce..aka...Federal "Reserve" Notes—in the end, it will come down to Food, Bullets and Barter if w'all lose our faith in those worthless paper FRN's...kind of reminds of a time when a certain emperor had no clothes to hang us all on the money-vine....aka...grapes of wrath anyone?

Until (if ever) that day comes, we as traders need to stick to our strategies, trade without fear and make as much hay while the volatility sun shines so we can stockpile CASH and prepare for all cryptic and alternate futures that come our way!  ;-)

Lets look a little closer at the monthly chart so we can best prepare our entry/exit points.

I have well documented on this site for years that my custom Fibonacci retracement Target Levels (T1,2,3,4) and SGB zones are very predictive where price will lead or bounce from, so mark up your charts, make notes and prepare to trade when price reaches them.

For our day-to-day entry/exit targets we always look for the Solid-Green-Bars (SGB's) zones on the daily chart so we can better implement the strategies and increase our odds of consistent success. The current bounce in the markets is a Level 1 Bull 180 and so far it has made it to T3. I am anticipating a continuation next week to T4, and if I see a close below that SGB zone, then I am going to be more aggressive on PUTS.

Here are all the indices for your review, and as you can see, they all have the SGB's to guide you to better entry/exit decisions.

The SPY and QQQ markets are officially in the clutches of the Bear (at least a 20% decline) and until that changes, the bias is PUTS on all bounces that reach SGB zones. If the DJI bounce off the Bear Market Territory fails at this current SGB zone bounce, it's going to get U.G.L.Y. for the markets and awesome for PUT traders!

Profits UP!

Frank

The don Franko

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Updated: 1/9/22 3:00 PM PST. 

Greetings SC Traders!

Here were my fills for this weeks trade ideas:

If you did not get filled on Friday, just place another order on Monday, but lower the price and/or strike since there will be some time decay over the weekend—many times over the past year, I noticed that you could get a much better position/price after I made my trades...lol. If the SPY is gapping open on Monday, DO NOT chase price/strikes because we have Chairman Powell testifying before Congress on Tuesday and that will most likely have the markets pull back before he starts speaking and you may get a much better entry point.

This year, I am sticking with the spreadsheet contract loads and placing my orders according to the SC formula every week. If you do not get/see my emails the days I make trades, be sure to do your own due diligence and apply the formula; because consistency is key with any strategy.

When we have a losing week (it is inevitable), do not chase contract loads on the next trade. In fact, I placed a new option on the spreadsheet (Contract Cut Rate) so you can make your own adjustments after a losing week; which will reduce initial draw down so you can keep moving down the road until the winners kick in.

Email me at: spreadsheet@optionradio.com to get the latest version.

If you miss out on a trade that went parabolic, NEVER give into FOMO...there is ALWAYS another one coming ;-).

The number one goal with this strategy is to compound your contract loads so you can layer exits and be in-it-to-win-it when the Moby Dick days come like last Monday!$$!

Profits UP!

Frank

The don Franko