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Sell the Double, Buy the Block

November 8, 2024
This post was originally for paid members only. It has since been unlocked for informational purposes and does not constitute financial advice.
 

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The stock market is embarking on a fresh leg higher, supported by the broadest participation we've seen this cycle.

With speculative growth stocks on fire, our $ARKK 11/15 $52 calls are doubling today. 

We want to take half off the table here and redeploy that capital into a new position. I’m selling them for $1.80.

The initial earnings reaction for $SQ is catching our attention today. The stock plunged lower but has been clawing back losses all morning.

Just look at the wick forming on todays daily candle:

Following a false breakout this week, SQ is ripping off its VWAP from the March high and refusing to break lower from this coil. 

This is the kind of post-earnings shakeout we want to buy all day. 

This stock is a part of the speculative growth theme and looks quite similar to ARKK, but is offering a far more favorable entry. 

If we’re above 71, SQ is probably resolving this pennant higher. 

With our volatility indicator coming off an extreme low and a double false start from this coil, we think a resolution and reaction rally is imminent. 

I’m buying the $SQ 12/20 $77.5 calls for approximately $1.80 per contract 

Steve

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