ESZ0 Trade on Oct 6, 2020 15:49 from Marius: Tradervue User Stock Trades.

Markets have been grinding and rotating higher since last week. Volatility is still elevated with a lot of headline risks. There are some stronger areas of the market ie. housing, solar energy, and small/micro caps. The week opened with rates increasing and bonds selling off. I need more study and research here as I was going to get short bonds but I needed to have more fundamental understanding for more variables into the trade. (remember to "think and trade like a pro")

Initially I was going to initiate some positions trades at the open seeing the market strength but held back due to major inflection levels on ES 3400 + NQ 11500. (anticipating more volume at this level and wanted to see how it's tested). RTY was notably strong moving back into Feb highs. SMH was also notably leading. For the morning and mid day price action was normal and within current trend.

That was up until Trump tweeted close to the closing hour that he would be holding stimulus bills back until after elections. The market started to sell off notably as a whole and breadth confirmed. I wasn't scanning for news initially but after seeing the price action, that raised my attention. All my initial bullish position plans including new in-play trade bullish options ideas were scrapped for the moment and was thinking market play trade with the new development.

This is the first time trading ES and favored the options expiring mid-week (tomorrow) for this shorter-term play. Taking into account the elevated volatility and recent market strength. It is possible to a smaller degree that ES could re-test 3400 and re-gain yesterday's closing losses.

Risk exit plan : If resistance levels retraced + supported and or there are notable price actions, news, and or fundamental changes going against the position.

Profit target plan : Short options position to expire OTM and collect premium.

Intraday Fundamentals

RVOL 0.90
AVOL 1.857M
ATR 68.32

Options Statistics

SI 5.058
IV 30.04%
IVP 17%
P/C Ratio 1.842

More puts (123,548) traded today with a 0-20 (68%) delta.

Options Position Metrics

OI 1,267
Vol 2,701
Delta .02
Theta -.24
Vega .10

Tape Reading

Large 3480 call write with 438 contracts looking at the series expiring tomorrow. Noting the 500 put contracts at 3100.

Technical Analysis

Notable 3400 inflection level. Anchored VWAP's from ATH and first bounce low from the Sep sell off.

Trade Review

The presidents remarks were reversed with overnight markets retracing the down move. At the cash equities open buyers took over and ran price close to yesterday's highs. My options closed OTM and premium was collected. I was looking for areas to exit in case price ran up further. This would of entailed the HTF inflection point clearing and adding another 50 points which would be more than the daily average ATR.

I positioned the strike above the HTF inflection level and more than a 1 ATR move. The TOS model priced in and calculated the metrics similar to my shorter-term trade thesis. This was another eye opening trade while managing the risks. Currently the inflection level is cleared and risk is to the upside. The market is in a strong position. Noting the sell off and complete V shape recovery and through HTF level resistance.