Why There Is Risk Of A Sharp Pullback

Posted by Joe Duffy | May 4, 2023 | Joe Duffy's Trading Advantage | 0 |

AAPL after the close Thursday. After the close Wednesday Qualcomm, a large supplier to AAPL had disappointing results. Our short position via a spread in AAPL is back to even. We set this up as a spread to take away the time erosion of the options AND did so whilst risking less than we stood to make. Prudent thing to do Thursday is take it off, hopefully for at least a small win, before earnings.

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I also have added Taiwan Semi Conductor on the short side with the stocks in the low 83’s. Expect Thursday to be lower, perhaps sharply, There is a lot to go wrong out there right now. The VIX is lower than when the market was at all time highs! That shows too much complacency regarding the risk of a very sharp pullback here.

Expect a test of the lower highlighted region in the days and weeks ahead on the SPY in the attached chart!

Thanks,

Joe

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Joe Duffy

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