Happy Friday, traders!
Another week in the books, and we’re continuing to see the same theme we’ve seen over the last month: crazy bullish and crazy extended. The markets continued their wild grind higher with another push into new all-time highs (ATH), with no signs of slowing down.
This week, we nailed a great trade on AMZN, as we came into the week with a 4-hour squeeze firing off the 8 exponential moving average (EMA). We entered on Tuesday morning after the opening bell and closed out the trade quickly, as we bought back the put credit spread yesterday for 70% of the max profit ($7,400). This is a smaller position size than usual, but we are happy to take advantage of opportunities like this in an extended market.
While we would love to see a healthy pullback before getting aggressive with larger position sizes on our long trades, there’s no guarantee we will be gifted one. What we can do for now is pick our spots wisely and simultaneously decrease position sizing.
As we optimistically wait for a reversion, we’ll be watching a few weekly squeezes next week in names like SMH, AMD, and SHOP. These all have a very bullish structure that fit our criteria perfectly. If the bullish party continues, these are the kinds of setups (as always) that we’ll be focusing on. In this Sunday’s newsletter, we’ll break these setups down in more detail and cover our game plan moving forward.
Enjoy the weekend and Stay Focused!