The market has been dancing back and forth on virus blips but today it has gapped up strong to SPY 328. This can be attributed to some earnings as well as some positive virus blips. Cases are still climbing, mainly in mainland China, but there have been reports of a Russian drug that is going to be tried out for treatment. If this serves as a cure, then the market will go absolutely insane.
The poster child for the past few days has been TSLA, which has soared from 650 to 900 from Monday morning to premarket today. That is 250 points and +38% in just one and a half trading sessions. It seems that this thing is a 1000 missile so buckle up. But, because everyone wants to see it at 1000 don’t expect it to get there easily. TSLA has always been a trick name so best to be careful when playing both sides of this name. I highly recommend not shorting TSLA until we have a major blow off day. There is plenty of meat on the bone to the downside so be patient.
The VIX is still sucking on that 16 level and I presume it will until the virus slows down or a cure is found. I don’t expect this market to make new ATHs during the virus outbreak but you never know with this market…
For day traders I recommend focusing on TSLA to the long side. Be extremely patient and only take a set up if it is absolutely golden. Let the big washout slay the early longs before getting in. Also, if there is a big spike early then don’t chase. Let shorts get sucked in and then wait for it to set up again. Seeing 1000 run across the tape today would not surprise me. As for the entire market, a key level I am going to be watching is SPY 328.50. A clean break and push through 329 will get 330+. This move should coincide with the VIX sinking below 16 and fading. Another good name to watch with VIX is UVXY. VIX fading 16 should also result in UVXY going lower so watch for that, too.
My main focus today will be TSLA. I will be glued to the tape and also following the weekly options flow. Yesterday we saw some insane orders coming through the options market that foreshadow a move to 1000.
Good luck and happy trading…
Market Madness 