The rally over the past two days (including today) has generated numerous Buy Signals, but in all cases irrational bullish psychology has pushed call prices well beyond any reasonable risk:reward parameters. In other words, the trade wouldn't just have to get direction right to make money, it would have to be accompanied by huge relative price moves. Yet it wouldn't take much of price decline to decimate those same option premiums. Bottom Line: These Buy Signals from yesterday and into this morning have not been taken because of horrible risk:reward parameters: AAPL, NFLX, ROKU, TWLO, WYNN The outrageous prices for these options is itself a sign of an impending top of at least minor, if not major magnitude. This is not a time to be aggressively Long, which any one of the trades above would be simply based upon the cost to play. Better opportunities. Long or Short, lay ahead.
