Two sectors that are high probability trades over the next few months are Long Energy - Short Semiconductors. Timing will be everything, that means if at first we don't succeed, try, try again. The pay-off will be worth it. Well, worth it. On Wednesday the energy analysis was sent out via the Mid-Week Update. For this PRO Service, in addition the USO calls set out in that update, we have some positions in OXY and XOM. I say "some," because both did slide below their respective 50% trailing stops (for decent gains), but have recovered some over the past few days. Holding at least a few leftover calls there, plus fresh USO calls from Wednesday's update, are appropriate buy and holds for now. Next Big Trade However the next big trade for both services will be a coming short-the-semiconductors trade, which will be more fully discussed in the Weekend Update. Here is a first look for PRO subscribers: SMH The underlying fundamental theme for shorting the semiconductor sector will be set out in the upcoming Weekend Update. For those who like myself, rely mostly on lines on a chart, the salient ones are set out above. Target: The 200 Day SMA, but not unless and until that trendline up from the late March low is breached, either on a close, or on a significant intra-day decline. SMH Sep 18th $400P Although any of the strikes shown above work we will officially be buying the Sep 18th $400P when this trade is triggered. Unless and until the uptrend line is broken, we wait. Forty-nine days is a lot of time. Meanwhile, on any day that SMH prints below 500, no need to wait for the close, go for it. MSTR One last trade: MSTR below $90 I'm adding this as speculative play on continued weakness in Bitcoin. It's down over $2K today and MSTR is sitting right on support @ $90-92. My minimum target here is below $50, so the reward is there for anyone willing to take the risk. If MSTR trades, or better yet closes, in the $80's, buy the September puts. MSTR Sep $70P As with SMH, any of the above puts will work for a fresh leg down in MSTR, but I prefer the deeper OTM strike for the increased leverage it provides.
