ARKK status 22 July

ARKK has rebounded well today, moving past recent highs. This does not change my prognosis.
I see the ETF moving all the way up to $123 over the next 2 to 3 days. Then I still expect a drop.

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That said, it may never end up in the $85-110 range that would be optimal for our calendar by Aug 6. Since I've got around $21 at risk in each of my 80 positions, that would not be horrible.
But still, why not bring down that risk even more?

Since I'm reasonably sure the stock will move opposite my wishes for the next few days, I'll bring in premium by selling some put spreads. I'll sell the 115/114 puts expiring on July 23, using a limit order. I think I can get filled at $0.10 to $0.14 cents which will bring in $10-14 for each position.

This increases my risk of loss to $86 ($100 spread minus premium collected) instead of my original $21 of max risk. Still the market has revealed its hand, and I will choose to play it. I think the spreads will expire worthless and I'll have reduced my overall costs to $11.

ARKK Reinforcing Our Analysis

Checking on our Featured Trade, ARKK gapped lower today, which was expected by our technical analysis.

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After gapping down to $113, our calendar spread is mildly profitable. But it's not worth the trading fees to close it. I expect ARKK to temporarily bounce up to test recent highs around $118, then resume its trend down.

What makes me think that is the original prognosis, calling for a mirrored move down to $110-111 levels. But confirming that is an examination of the bearish convergence still appearing on the lower lows made by recent price and RSI waves.

We'll see if time proves us right.

Disclosure: Options investing is inherently risky. This is not a solicitation to buy or sell. Please read our options disclaimer on this site before trying to emulate any trade shown here.

Announcing official roll out of Bronze Subscription For Milk The Cow

Since we published our original article on our Milk The Cow strategy about a year ago on Seeking Alpha, we've had a lot of users wanting to subscribe to the Bronze membership ($100 / a month) for the signals service.

We were having a lot issues getting our website membership functionality implemented. This was due to a glitch that took us a loooonnnng time to identify, but which prevented Stripe merchant credit card signals from being sent to and from Stripe. (For curious programmers, it was not the Stripe or the membership API, but rather a faulty compatibility between the latest version of WordPress and the WordPress theme we've been using for the last 6 years. )

Since we were involved in many other activities centered around a new Jolts marketplace, we preferred to wait until this was resolved before accepting memberships in the Bronze service.

That Service is now ready to accept memberships. We'll be contacting those of you who've shown an interest. We thank you for your patience!

You'll also be happy to know that we finished the first year of actual trading at a decent profit (around 17%). This was less than we'd hoped for, but the issues we identified with our approach last September - October have since been tweaked and the algo - we believe - significantly improved. We think this tweaked approach deals better with periods of high volatility. That's good, cause we think a big storm is on the horizon over the next two years that could carry stocks down 60% to 80%. Meanwhile, bonds are paying a negative return.

Please post any questions you may have in the Forums Milk the Cow topic section so that others may benefit from our responses.

New Featured Trade

Check out our featured trade posted two days ago. So far, the ARKK is moving as we expected it to, namely sharply lower. Let's see how it evolves over the next three weeks.