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Market Brief: Inflation, Rate Hikes and Earnings-1/18/22

Morning everyone. I am back in full force for a bit as I am taking a break from my travels. I was much more active in my discord and social media, as I had stated, so if you followed me you still got daily updates, trades and market conditions.

We are off to another horrible start to the year this week, as the market continues to sell off. Wall Street continues to expect extreme tightening from the Fed, as yields and inflation continue to rise. Wall Street has already accounted for 3 rate hikes this year, but fears worsen as inflation continues to spiral out of control. It is looking like there might be 6-7 rate hikes this year, and this could cause not just a sell off , but an actual depression, where you could see market shed up to 50% of it's value. The S&P 500 and Nasdaq down 2.2% and 4.8%, respectively, in the first two weeks of the year, and futures fell another 1.3% and 1.9% overnight. The question is , how do we trade this?

First, there is no real reason to hold anything overnight in this market, unless you are hedging your long term portfolio or have options rolled out 6 months ahead. You will only be asking for trouble. The VIX continues to hold its value, rising back up 12% to 21.49. In December, we really played the volatility , as it kept cycling between ~15 to ~30 range. I think we will continue to see increased volatility and playing options on this will be a solid play. If you aren't holding overnight, that means you will be scalping . If you are scalping here , playing the short is the most logical way to set up.If you do want to hold for a week as well here are some other plays you could do.

Daily Scalp: Buying naked puts and calls which means just holding one leg and hoping you get a bump either in a few ticks or a couple hours.

Credit spread: One way to gain value here is to find a credit spread. In this case I would recommend doing it as a short to catch a middle. #MRNA seems to have a lot of swing here so you could buy some puts near the money (closest to current stock price) and then sell puts OTM ( way lower than the stock price) and try to find a middle. I would recommend going short heavy, so only cover half the premiums here on the sold puts. DM me if you need further explantation .

Selling Theta: You could also sell puts/calls and try to catch a quick theta play, hoping volatility will decrease and you can capture Vega value as well. This is what I am currently doing on a heavy short basis.


#MRNA: Short/theta here selling calls @265, 235, 225 that I put on last week. MRNA is already way off

#NVDA: I am long underlying from year long positions. I am selling calls here as a covered call strategy . I sold calls @297.50, 287.50 last week to hedge the downside.

#ORGO: If you read my post last year, I have been short here for a while and the stock is finally tanking.

#DASH : I am short/theta here selling calls @143,142 respectively

I will probably continue to add on to these positions and buy some outright puts here to catch a downswing. I am ready with one click to liquidate my account and completely go short when the market crashes this year.

Don't forget to follow the Discord and my instagram for live updates. And subscribe to my Monthly Trade Subscription for only $75 /monthly where you get all the live trades, tips, and strategies in real time so you can execute yourself.

INSTAGRAM: day trading_traveler

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