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Discussion
The WOTE Special Ops strategy is a highly aggressive, options-based strategy. It’s a tiny portion of my overall portfolio, but I use it as a vehicle to express the tactical market views I write about on The WOTE.
As outlined last night in a text to market friends, below are my thoughts on how today might evolve and how I am likely to trade it.
Preliminary trade plan for tomorrow:
1. As long as 8:15 ADP, 8:30 QRA, 9:45 PMI, and 10am JOLTS aren’t overly market positive, the market should puke ahead of 2pm.
2. Probably sell some puts into that puke and then re-enter Friday puts on what is likely a less than enthusiastic bounce into Powell at 3pm.
3. I don’t think Powell is going to provide much of an entry point, ala September FOMC, so I don’t want to get cute on the bounce.
4. I want puts to cover NFP on Friday, which is unlikely to be market positive given robust ECI data.
5. I think Steve Liesman said Powell speaks next week. Perhaps even to CNBC or something. Not sure.
6. But Friday is perhaps a good local low for a trade-able bounce into Powell next week.
With Bitcoin continuing to point the way lower, down another 5-6% this morning, I think it’s likely I can execute the plan as outlined.
Powell speaks on 5/14, the same day as PPI but it's a day before CPI