This is not a stock market right now. It is a handful of stocks.
I was on Schwab Network’s Trading 360 this morning, and I put up three live trades right there on air. But the trades only make sense once you see the tape underneath them.
Look under the hood and it is bizarre. The financials are flat on the year, healthcare is flat, and energy has barely moved.
One group is dragging the entire S&P kicking and screaming into the record books, and it is the semiconductors, up around 67% on the year. That is not a healthy market.
That is a market leaning its whole weight on a single sector.
So I built three trades around exactly what I am seeing underneath that surface.
Two of them lean one direction.
The third leans the other way, and I will be honest with you, that is the one I least wanted to put on.
It meant stepping right in front of a name that has been running like a freight train with no brakes. Everything in your gut tells you not to stand there. I did it anyway, with defined risk, because I think that move is long in the tooth.
There is also one in here I hated being bullish on. It goes against my every contrarian instinct, and I took it anyway, because the momentum is that strong.
I named all three on air. The direction on each one, the exact spreads, the strikes, the expirations, and what I am risking on every single trade.
I am not going to retype any of that here. You should watch me build them myself and hear the why behind each one.
One of these three is the trade I have the most conviction on. It is also the one that scared me the most to put on. Go see if you can tell which.
To your success,
Don Kaufman
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