Predictions for Friday, November 25th 2022
Quick summary:
Happy Thanksgiving to all our US readers!
Markets expected to finish lower this week
Trading SPY condors at 393/394 to 404/405 and SPY puts at 404
Trading DIA puts at 345 (no condors, risk-reward premium too low)
Watch this tutorial video to see how we trade this and how to interpret our predictions:
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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, November 25th, 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:
Yesterday the FOMC minutes came out but it didn’t really trigger the downturn that was expected, although it was a volatile day. Still alive with the positions, although if Friday’s half-day performance continues in the same direction, we are likely to be triggered and lose on the puts. For the past month and a half it has been one week - good, the next week - bad in terms of our performance. Perhaps the trend continues. We will see.
How did we trade this?
As per our predictions, this week we are trading 3393/394 to 404/405 SPY 25/11 iron condor (40 contracts) for $1,280 total premium. We are buying 3 SPY 404 puts 25/11 for $4.12. Stop loss was at $1.5, and has been lifted to $1.8 by the end of trading tomorrow. This position is hanging by a thread.
No iron condors for DIA, the risk-reward premium is too low. We are also buying 4 DIA 25/11 345 puts for $3.65. Stop loss was at $1.5, and has been lifted to $2.5.
The portfolio is at 52,353 USD, so the allocation is up to $5235 for options, 20,900 for long-short positions in each of these:
SPY short: sold $6544 worth of SPY shares (at $401.8 per share)
DIA short: sold $6544 worth of DIA shares (at $342.2 per share)
No UVXY play, as the VIX is projected to stay the same.
Macro positioning (unchanged): short $10.47k in SPY and $10.47k in QQQ (plus the same March 2023 OTM calls as hedges).
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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