Predictions for Friday, May 20th 2022
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Our weekly predictions are here, available exclusively to our subscribers (competition participants get it a day and a half earlier if they leave their email), for Friday, May 20th 2022 (4pm EST; at market close). Keep in mind that our accuracy is much better for low volatility assets, so interpret the predictions with caution. For an overview of our accuracy thus far, see here.
Our estimate for the Friday close for our 5 major indicators and 2 stocks this week is the following:
Just as we sent out our predictions yesterday to our regular survey users, the markets crashed. 4% for S&P, 3.5% for DJI, 4.7% for NASDAQ. In other words, all our predicted directions are going in the right way, but every single price target has already been overshot to the downside :)
Two potential scenarios with respect to our predictions. Either we get a slight pull-back from the sell-off today or tomorrow, bringing us closer to the target, or a continued mass sell-off that will - for the fourth week in a row - make our downside hedge very profitable, enhancing our portfolio performance.
Just a reminder from what we said last week, the BASON is typically reluctant in predicting sharp weekly moves (it tends to be sensitive to high volatility), so once again direction will be important. And for most indicators except the VIX, we predict the direction will be a move downward.
How did we trade this?
We traded 10 SPY 20/05 iron condors, ranging from 392/393 to 408/409 (10 contracts) for $470 immediate gain. The lower interval was already pierced yesterday, so we’re at a loss here for now.
But that’s why we bought downside protection, one SPY 409 20/05 put for $7.44 per contract. It closed at $17.55 yesterday! That’s already a $1000 profit (although we won’t sell yet, we’ll set up a take-profit limit at $15 and see what happens today).
Similar play for DIA 20/05, where we traded the following iron condor: 317/318 to 327/328 (10 contracts) for $290 immediate gain. Also trading at a loss for now.
And also protected with one DIA 20/05 put at 328 bought for $6.15. It closed at $10.20 yesterday, so that’s a $405 profit. Same for SPY, we won’t sell it yet, only set up a take-profit limit at $9 for now.
If things stay as they are (continued sell-off), we’ll probably lose around $500 on the condors, but gain over $1500 for the puts, and realize profits for the 7th straight week in Q2.
DISCLAIMER: This prediction survey is still in its testing phase. Neither the survey nor its results act as investment advice of any kind, nor should they be considered as such. The results of the survey need not correspond to actual market preferences or trends, so they should be interpreted with caution. Oraclum bears no responsibility for your investment choices based on these predictions.
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