Latest 13F Filing - Druckenmiller's Addition Of IWM Call Options

There have been a few headline institutional buys making the rounds lately - namely Warren Buffett's purchase of United Health (UNH) (watch here for a detailed breakdown) however the latest to hit the wire has been Druckenmiller's addition of IWM Call options last quarter. Late last month I wrote that despite the magnitude of the market rally since this past Spring, there was still a good risk/reward in being long the Russell 2000 (IWM) as opposed to chasing tech at these levels.

Despite heavy criticism and several weeks of choppy price action, I have repeatedly been calling for certain sectors and stocks to play catch up to the market, namely IWM, DIA, AAPL, as well as the aforementioned UNH to name a few.

Meme cartoon of buyers breaking through call walls

Last week, AAPL busted through a lengthy base and rallied from $202 to $235 in just a few mere days. This exceeded our original $230 price target that we had set back when the stock traded at $195-$200.

Also, just this past Friday the Dow Jones (DIA) finally made new all time weekly closing highs (adjusted for dividends), capping off a 9 day rally.

AAPL Breakout

DIA new all time closing highs

IWM also performed well this week by breaking through its local range high and despite price action stalling out on Thursday and Friday, it still recorded its highest weekly close since the week of 1/20 earlier this year.

IWM highest weekly close since week of 1/20

Druck is regarded by many as the sharpest fund manager on the street and is notorious for seeing things months before the rest of the market. Lest we forget, he was in IWM call options last year as well before IWM's monster 10% rally following the July CPI release - a trade that yours truly was in as well.

Official 13F filing

This latest is in line with my original thesis which is that the best risk/reward right now in regards to positioning in the futures and options market is still the Russell 2000.

Again, as stated previously, the market is certainly long in the tooth with this rally and this endorsement is not a license to pile into small cap exposure, but it does show that it is where the best risk/reward is in the long equity space. Full Disclosure - I have taken profits and trimmed down my long Russell Exposure but am still holding a partial TNA position 🔐For access to premium trading content including swing trade alerts & live day trading room visit 👉 - https://www.carnivoretrades.com/ 

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