This week's free trade is an iron condor on FXI. Taken on Tuesday it would be about 5 percent up. It might get challenged if there is bad news at the summit, but the bet is on mean reversion: for a swing trader the mean is the 50-day moving average, and price keeps coming back to it.
The question is the month. December is short for an iron condor, and if the price drops on bad news there is little time to come back before the exit at day 16. January has 64 days, 30 more, which gives a bigger window and more time to revert to the mean. That is why I prefer January. You can also play both, with a small bet on December. All trades are out by Christmas.
Before the trade, the market: this sell-off starts much like the 2022 bear market, though the 200-day moving average is still rising, so it is not a clear trend change yet. Markets can fall for half a year or a year. You do not have to make 100 percent when it goes up, you have to make sure you don't blow up. This technical bounce is where you de-gross and manage your mistakes, and the Nasdaq looks even worse, still under its 200-day.
After it, three names: I skip Take-Two because of a big binary event, since that is a coin flip. NVIDIA is about 30 percent cheaper on its multiples, but stocks move on people, not company numbers. My base case is that oil creeps back up, an asymmetric setup that may become a trade alert, and that would keep inflation elevated and push bond rates up, which is not great for IEF.
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Education only. Nothing here is investment advice. Options carry risk, including the loss of the whole stake.