https://putplaybook.com/watchtower.html#weekly-outlook
Watchtower Weekly Outlook
Header and Introduction
Date: Week ending August 23, 2025
Published: August 25, 2025 at 2:00 PM MDT
Slogan: Empowering the Middle Class with AI Investment Tools to Thrive.
Brief Market Summary: The S&P 500 closed at 6,466.91, marking a 1.52% increase on the final trading day. Key indices showed strength, with the VIX settling at 14.22, reflecting low market volatility. The CBOE total put/call ratio stood at 0.88, indicating a mildly bearish undertone as ratios above 0.8 often signal caution. Implied volatility (IV) levels for leveraged assets like TSLL remain elevated around 50%, providing opportunities for premium collection in put-selling strategies.
Recommendations for Next Week
Market Outlook: This week's economic calendar features key releases, including the first revision to Q2 GDP, July Pending Home Sales, and Durable Goods Orders, alongside Fed speakers like Christopher Waller. These could influence market direction, particularly if GDP revisions signal stronger growth or if housing data points to softening demand. X sentiment on TSLA and broader markets is mixed: long-term optimism persists due to EV growth and FSD advancements, but short-term concerns include demand headwinds in Europe, potential regulatory changes under political shifts, and overbought conditions risking pullbacks. IV forecasts suggest stability with VIX below 15, but TSLL's high IV (around 50%) supports attractive premiums for put sellers, assuming no major volatility spikes.
Trade Strategies: Drawing from QuantumPutAI analysis (confidence ≥90%), we focus on put-selling for consistent 1% weekly returns via the "insurance" metaphor—collecting premiums on high-IV assets like TSLL (current price: $12.80). Recommendations are tiered by subscriber level, targeting out-of-the-money (OTM) puts for the next weekly expiration (August 29, 2025, adjusted for availability). Expected premiums assume expiration worthless, yielding 1-1.8% returns per contract (adjusted for risk).
Starter ($1K portfolio, 1–3 contracts, focus on education): Sell TSLL Aug 29 put at $11.00 strike. Expected premium: $0.12–0.18 (1.1–1.6% return if expires worthless). This conservative OTM position minimizes assignment risk while building familiarity with premium collection.
Pro ($10K–$100K, 5–10 contracts, moderate risk): Sell TSLL Aug 29 put at $12.00 strike. Expected premium: $0.20–0.30 (1.7–2.5% return if expires worthless). Scale exposure for higher yield, monitoring TSLA catalysts for rolls if needed.
Elite ($100K+, 10+ contracts, advanced): Diversify with 10–20 contracts on TSLL Aug 29 put at $12.50 strike. Expected premium: $0.25–0.35 (2.0–2.8% return if expires worthless). Incorporate hedges if IV rises, aiming for portfolio-level 1% net.
Emphasize emotional discipline: Avoid chasing premiums in volatile sessions; stick to QuantumPutAI signals for data-driven entries.
Risk Management: Align with the 1% Collective System—cap exposure at 5-10% of portfolio per trade to protect capital. Set stop-losses at 20% below strike (e.g., roll or close if TSLL drops to $8.80 for $11 strike). Monitor CPC ratio for overbought signals (>1.0 warrants caution). Diversify across 2-3 assets if Elite; always use cash-secured puts to avoid margin calls.
Community Input: Share your trade setups and QuantumPutAI insights in the Covenant Forum—did X sentiment shift your allocation? Your feedback refines our AI models for next week's issue. Join the discussion at covenantinvestors.ai/forum to build collective wisdom.
Disclaimer
This newsletter is for informational purposes only and does not constitute financial advice. Covenant Investors.ai is not a registered investment advisor. All trades involve risk, including loss of principal. Past performance does not guarantee future results. Consult a professional advisor before trading. Data sourced from public markets; QuantumPutAI outputs are AI-generated and may contain errors.
