Long Apple, Short Banks

We put on two tactical trades today — one leaning into strength, the other positioning for potential weakness.

First, Apple Inc $AAPL.

The stock has reclaimed the VWAP from the December highs, a key level that tells us buyers are regaining control of the tactical trend. 

At the same time, the Strazza Indicator is curling higher, signaling that a surge in volatility could be underway.

I’m betting on a swift move toward 280.

I bought the $AAPL 3/20 $280 calls for $2.60.

On the flip side, weakness in banks caught my attention right off the bat today.

Financials $XLF are completing a top — and the cleanest way to express a bearish thesis is through Bank of America $BAC.

On the 65-minute chart, BAC looks vulnerable as it presses against the lower bounds of a multi-month distribution pattern. 

Price is hanging right at support.

Short-term volatility is compressed and ready to expand. If this shelf of old lows gives way, look for a fast move to the downside.

I bought the $BAC 3/6 $50 puts for $0.73.

Steve