Thursday and Friday Market Movement

This past week was a busy week for the end of August. Amazon is still moving to new highs along with Apple despite Netflix cutting off the Apple Store's cut of Netflix subscriptions. There are still more tariff talks as we ironed out a deal with Mexico, Canada is pushing for a deal next. Tesla has continued to move down as Elon Musk has left the headlines and other auto manufacturers are entering the electric auto space. 

Alphabet (GOOGL) had a nice move up this past week. It peaked out around 1269 which was a surprise that it went up on Thursday given that it started the day down. It fell back to 1260, came back up to 1266 and was in free fall mode until 2pm on Friday. I bought 3 1260 Puts on when it was at 1265 and sold it too soon at 1258. If I sold them on Friday at the low of 1225, I would have multiplied my money by 7. 

So that sounds good and you might say let's do that the next time it goes up. Typically Alphabet has a great week ending with a fall in the last day and a half. The next week it starts down with a bottom found on Monday. The bottom is retested on Tuesday and again on Wednesday. By 2pm on Wednesday the bottom is in and you could feel comfortable buying Calls for the end of the week. If the move is huge on Thursday without a pull back, Friday could be a similar sell off day. If Friday is an up day, buy Call options for the next week. If it is not an up day, buy Call options near the bottom at the end of the day.

Given how much Apple has run and their new iPhone announcement, I would expect to see it pull back some before moving higher. I am looking for it to come down to 222 before buying Call Options a week or two out.

Movement to Profit

Most stocks opened higher this morning with the exception to Alphabet (GOOGL) which was targeted by President Trump before the market opened because he was not happy with the "fake news" he found when he Googled himself. I guess he doesn't understand that Google includes what you are interested in the search.

It fell so quickly and bounced from it's morning bottom that it would have been difficult to profit from Put Options this morning. It did bounce off 1246 which is $10 lower than Monday's close. That is where you could have bought a Call Option and sold it around 11am when it came close to even for the day. Unfortunately this was the only good move to trade based on the indicators.

Best Buy reported earnings around 7am this morning and it beat all of the numbers analysts were expecting, but it quickly traded down due to a lower forecast for the current quarter. Best Buy did raise their forecast estimates for the year which appeared to be ignored.

Best Buy popped early and sank quickly. It appeared to have bottomed at $75. Based on the last earnings report, it went down further the 2nd day after reporting earnings. I believe that it might not go lower tomorrow because the earnings report was so good.

I would like to buy Call Options 3 weeks out once the bottom is secure. As we saw with Alibaba retested it's bottom the 2nd day after earnings last week, it moved up and opened at 182 today but sank hard after that. I don't believe in Alibaba like I do with Best Buy so I would expect Best Buy will retest it's recent all time highs in the next couple of weeks.

Tesla went down from open and bottomed quickly at 311, ran up to 317 and down for the rest of the day finishing at 311. I just saw one good Call Option trade that made sense.

Given that Amazon had a new high today, I would expect to see more upward movement tomorrow if we don't get another tariff bomb dropped by President Trump before the market opens. 

Friday and Monday Market Summary

China appears to be preparing for a trade meeting as they have stopped devaluing their currency. The market had some nice gains on Friday as many Chinese stocks bottomed and started moving up like Alibaba. Alibaba ran up after reporting earnings on Thursday and came down sharply 13 points. It opened around 175 on Friday, came down below 173 and finished by moving up that continued Monday when it passed 180. I picked up a September 17 dated call option with a strike price of 180 on Friday. I hope it breaks through to 187 by Thursday for me to sell it.

Alphabet (GOOGL) on Friday opened higher, moved up and back down near where it closed Thursday around 1221 then went up to 1234 and finished the day above 1236. Monday Alphabet moved similar to Friday when it opened around 1244, up to 1247, came down to 1241 at 9:40am and ran up for the rest of the day. I have Friday's chart to the right and Monday's right under it.

I mentioned over a week ago that Twitter looked like a great deal under $33. It went down to $32.35 and has been up since as it closed today above $35 on it's way to 42.

Ford moved up since Thursday as it touched $10/share again today with the news about the Mexican trade agreement. Tesla moved sharply lower today but settled the day just under Friday's closing price. Analysts are saying what I said a while ago about Elon Musk should worry about making cars and hire someone to handle the public. I also said that Tesla should remain public and now Musk agrees as he posted on his blog Friday evening.

Profit from Ups and Downs of the Market

I have not posted anything in a week as I tried a different method to trade that didn't work. I felt that Alphabet (GOOGL) came off of the bottom last Friday and was going up starting Monday. It went up to 1224 and down from there. It didn't go as low as Friday's low of 1204, but did have a nice run up. I decided to hold on my options for a couple of days because I felt that it was going to 1240 and would open higher by 10 on its way.

Tuesday came and it ran up to 1232 and fell from there never to return until today. When it ran up to its peak on Tuesday, the S&P 500 index was about to pass the all time high from January. Alphabet's indicators were at the very top for over a half hour which indicates that it would probably go down. I expected a small drop followed by a push higher. I was wrong. As Tuesday ended, everything fell going into the close with the Trump associates guilty rulings.

On Wednesday Alphabet opened around 1215, ran up to 1226 and fell to 1218 never passing 1223 in the afternoon. I sold my Call Options that I held since Monday for slightly less than I bought them for although the stock price was 10 higher than when I bought the options. This is why I don't like holding options over night and you should expect to have them sold in less than 45 minutes unless holding on to longer dated options.

If I had not been tied up with the Alphabet options I would have taken advantage of lower cost options for stocks that came off of a recent peak that were due to go higher for example:

• Spotify was 194, came down to 185 and today is back above 191.
• Roku was near 60, came down to 55, now back to 62
• Apple was near 218 on Friday, came down to 214, and now back to 216.

Nvidia fell last Friday from the disappointing earnings report due to only receiving $18 million instead of $100 million from crypto currency mining. It tried to recover Friday before falling back to the after hours low of 242. This week it has run up to an all time high of 269. This is a stock that is strong, but streaky. I have tried to trade options on it before with such small success.

Tesla might have turned a corner as "the most shorted stock in the history of the market" according to Elon Musk. The reports of Musk health concerns drove Tesla's stock down from 305 to 283 in premarket trading on Monday. It opened around 290 and finished the day at 308. From there it has moved up to 327, but has stayed around 321. Tesla has positive news for deliveries and negative news about a car hitting an object then catching on fire. This week it is stayed consistent.

Outside the initial movement in the morning, there is not a lot of movement as it appears that the market is waiting for something. Tariff news is increasing with more planned tariffs on China and anticipation for a meeting with the leaders of China to work out a trade agreement. One thing is sure is it could take an hour for a stock to peak and in 20 minutes go back to where it started. 

Day trading this market can still make a lot of money as long as you know your stock. Alphabet (GOOGL) typically moves 10 to 12 from the prior close or the morning open. It goes up and down that far. Home Depot, Best Buy and Apple have moved 2 to 4 points in either direction each day. With the stagnate market this feels similar to a type of bear market beginning. As we come to the end of the 2nd quarter earning reports, we might see more of the same. Maybe not as Amazon came close to hitting another all time high this morning. 

How to Make Patients Pay Off Today

I am a big advocate for studying one or two stocks that have decent daily price movement to trade options daily. I follow Alphabet (GOOGL) closely and understand its tendencies. Similar tendencies can be found in other stocks, but I am comfortable with it's tendencies for trading.

Today it opened higher than Monday's closing price, but Monday it broke below the 1249 level that held the week of Alphabet's 2nd quarter earnings. I expected it to go down initially today and roar upwards after it finds a bottom. It closed Monday slightly below 1249, but opened at 1252 and pointed down quickly. It was so quick that it didn't come back to where it started the way I like to typically jump into a trade. It did find a bottom at 1240 where it retested a couple of minutes after 10am which made it perfect to buy Call Options.

Unfortunately I was influenced by last Tuesday's movement where it opened 10 higher and went higher right off the bat so I bought my Call Options too soon. Rather than sell at a loss, I decided to wait for the turn. The only problem with waiting is that what I paid for the Call Options when Alphabet was trading at 1252 I had to wait for it to get to 1256. I sold up slightly due to lack of discipline for not waiting for the bottom. This would not work well on Thursday or Friday as it doesn't have that kind of change in direction most of the time.

When there is a big drop with Alphabet, it moves in $10 to $12 peaks. What I mean is that it opened at 1252 and bottom at 1240. It closed yesterday at 1248 and peaked at 1260 although the tradable peak was 1258. Therefore you can use the price movement of the stock to measure good times to take profit it is in an extended overbought or oversold state based on the stochastic indicators.

In other news, Home Depot had a blow out quarter report before the market opened and it went up in the premarket trading and fell sharply during the market session  This stock will go up over the next couple of days as long as Macy's and Walmart don't disappoint over the next couple of days. 

Macy's hit a new 52 week high today. I find that when a company runs up before reporting earnings, it receives too high of expectations and will sell off after the report no matter if the earnings is good. With it running like this, I bought a Put for protection on the downside and expect to buy a Call Option after it finds a bottom if the report is good. Nvidia is following a similar pattern, but the problem is their options sell at a hefty premium and the report is due after the market is closed on Thursday which doesn't give you time to anticipate the direction. 

Tesla appears to be losing stream after last week's Tweet by Elon Musk about going private with the company stock. I feel it is going to be in a tight Trading range Unless we get some market altering news. 

Amazon and Apple Go Higher and then...

Amazon and Apple went broke out to new highs this morning while Netflix opened lower due to the CFO leaving the company. Netflix did rise with the rest of FANG before coming down with FANG for the rest of the day after 11am. Tesla opened higher and traded down until it reversed when it got around 350/share. I believe Tesla will move up this week, but find it hard to believe that the company will go private at $420/share. I think $400 is more likely to be the go private price, but either way it is higher than where it is at and is why I will hold a small amount of shares in my portfolio.

Alphabet (GOOGL) opened up, came back to 1252 in the first couple of minutes and that is where I bought my Call Option and sold just after 10:30am for a nice profit. It came down to 1252 where I bought another Call Option with a higher 10 strike price and ended up selling it when it didn't appear that Alphabet was going much past 1254. It did trade down for the afternoon. Tomorrow might be similar to today. I like taking my profit when it goes up about 12 higher than where it starts when it starts flat. See my chart:

Friday Pull Back to Profit

Amazon and other tech companies were up big this week and today was not much different than other Friday's where they would give back some of the gains for the week. Alphabet (GOOGL) ended slightly lower than where it ended last week. I would expect more give back on Monday.

LEARNING LESSON: On a down day, take your profit and look for another opportunity to take a profit in the same direction. Don't get excited about it changing directions completely as that doesn't happen often and many times it just returns to where it starts.




Tesla had some after hours movement Thursday from news that the board will pursue hiring a financial analyst to determine the valuation of the company to move the process forward for Elon Musk desire to make Tesla private. By open Friday it gave back the after hour gains and then some, but did charge higher and ultimately ended the day even.

LEARNING LESSON: Try to avoid after hours momentum as it can be reversed the next day and is often wrong. Instead look to buy at the best price during open trading market hours.

Example: Sunrun was driven down below $12/share after reporting earnings Thursday afternoon. It finished after hours trading around $12.67. It fell to $11.80 after open Friday morning and moved up nicely a dollar from there. This stock is loved by solar customers and employees of Sunrun and the numbers were good except for the earnings per share which was due to an accounting change. If the numbers look good and the price action is not, look to see if there is poor guidance given on the conference call. If it is clear then it is obvious that the after hours traders are wrong and you will get a rebound the next day. Macy's is a perfect example of this after their first quarter earnings call.

Apple opened lower today and moved up quickly. This appears to be a common theme as they stay closing above the trillion dollar amount of $207.,7.

Tariffs are working so well that... Who knows what will happen next week. Home Depot, Walmart, Macy's and other retail companies are reporting next week. Happy trading.

Amazon New High and Tesla Grounded

Amazon hit another new high today as it pushed through $1900 as it pushed higher with news of a new clinic option. Boeing and Ford went lower along with Tesla. The Tweet that Elon Musk pushed out appears to be a myth until there is proof. I am sure there will be a new Tweet over the weekend that will drive it up next week.

Alphabet (GOOGL) moved up, came down below the start and then higher. As the Samsung Unpacked event displayed Samsung’s new smart speaker it dropped quickly to 1262 and bounced higher. As a Samsung user and a Google Home user, I would not switch to Samsung to use Bixby as I hate Bixby. The best time to buy Call Options showed when the price dropped but the stochastic indicator did not come down as far. It was also very close to where it opened today also. Check out the chart.

Sonos fell further as they are getting closer to their IPO price. CNBC's Jim Crammer smashed Sonos for sharing a dismissal outlook after their IPO. Spotify had a huge jump once they were announced as a partner with Samsung at today's event. I jumped in midway up on some calls and sold them within 5 minutes for a decent profit.

Roku reported earnings Wednesday after market close and they broke even for the 2nd quarter which was better than the lose analyst were expecting them to report. I made money on the IPO release last fall and I saw this was so low a few months ago that it was close to it's opening week around $30/share. I love our Roku televisions and thought this is one to buy and hold. Unfortunately I wanted to get dividends instead of growth so I sold a Call on it and couldn't afford to buy it back as it moved up above $40 that week. It will go higher as they are trying to expand their channel to be used without the need for a Roku device.

Everything is up so much this week that it might be crazy to think that it will continue tomorrow. I would expect a big pull back on Friday but could be wrong. 

Elon Musk and Tesla Dream

Elon Musk appears to be settling himself and the company up for the biggest disaster possible with his recent Tweets about taking Tesla private. Tesla has struggled to make production goals for quite some time and has failed to make a profit for years. As the demand has increased, Tesla has failed to make enough vehicles in a timely fashion to meet the demand.

Tesla's failure to meet demand and success in creating a wonderful vehicle has created opportunities for other high end auto makers to meet the needs of customers. Porsche, Volvo, BMW and other automotive companies have produced electric and hybrid vehicles that Tesla customers migrate to because they don't have the patience to wait 3 to 18 months to buy a vehicle. Tesla has failed also to perfect self driving in their vehicles when Nissan and others have employed radar to detect stopped objects for a few years. Tesla makes their cars upgradable, but they are about to be passed up by Google’s Waymo.

Tesla might not have too many improvements to make to their vehicles, but increasing production to achieve economies of scale should be the ultimate goal. Possibly Musk could argue that is what they are trying to do with new factories in China and Europe. Tesla increasing production is the most important thing the company must improve. By Tesla operating as a public company it has a public responsibility to shareholders to produce products as the most efficient way.

Elon Musk expects to run Tesla more efficiently as a private company doesn't make sense as they are in a completely different business than Space X which he says runs very well. Space X might be efficient launching a rocket once a month, but it is a business that must focus on efficiency rather than law of large numbers like a struggling car company must accomplish. Thankfully running Space X allows Musk the ability to generate income that he can back Tesla financially although he states they will continue to operate as separate entities.

Keeping Tesla separate is a good thing, but many people want to see Tesla succeed and if Musk wants to take the company private, many have expressed desire to get more than the $420/share price Musk Tweeted yesterday. That is a lot of money and based on that fact alone Tesla should be trading above $400/share. To accomplish the buy out would be a complete waste as the company has a large amount of debt obligations and is burning through cash. If Musk has enough cash to take the company private, he should use it to focus on making the company better and buyers will buy it and short sellers will be burned.

Elon Musk is too concerned with short sellers as I am sure his employees do not go to work wondering if the stock is going down big today. Short sellers do not have anything to do with the production of Tesla products. Improvements to the Tesla brand and increased production should be the only thing that Elon Musk should desire for Tesla. If he doesn't like answering questions of doubters then he should have it handled through a PR team so it doesn't waste his time.

That is how Tesla could be great and loved by most.

Profiting From Options in Boeing, Apple, Alphabet and Tesla

Yesterday's run up in Tesla was huge but as I mentioned yesterday, if Elon Musk does not follow through, he will go to jail. I will follow up up on that in a separate blog later. Boeing was affected by more tariff talks this morning with China imposing more tariffs on US goods. It opened down, came up momentarily and that is where to buy a Put Option today.

Tesla opened lower, ran up quickly and then sold off from the 382 area. Tesla has a tendency of moving one direction and switching during the day. Here is the chart.

Apple opened below 107 so that is where you look for a bottom. The bottom was in around 105.30 and from there you should buy a 205 Call Option to hold or just make a quick profit if the expiration is for this week. You definitely would have made some good money with it.

Alphabet (GOOGL) was also a great way to make a profit from Call Options today. With Alphabet I have found that you wait to find the initial direction and buy an option for that direction when it comes back to the starting point. I saw it ran up to 1258 and come down to 1252 in the first couple of minutes. To me it appeared to go up, but I waited as it went up again and came back to 1256 where I bought 2 Call Options. When going up, I expect it to go around 12-14 points higher. With that in mind you can set a sell limit order and it should get hit typically around twice of what you paid for it.

Today Amazon hit a new high. I would expect Alphabet and Amazon to be higher tomorrow, but will wait for tomorrow to find out what is going on.

I showed 4 different stocks to make money on options, but I would recommend only using one or two at most when shirt term trading. 

Tesla Crazy, Market Movers to Profit

International markets have been down and were up last night which our markets took off from open. Apple moved down below 207 and Sonos moved below 19/share. Alphabet (GOOGL) opened higher and continued higher to 1265. When it opened above the 1249 mark it was a signal that it was going higher. It went to 1265, came back to 1256, back up and back down to finish at 1255. There was a definite trading pattern it followed today and the 2nd path was easier to read.

Tesla was trading around 342 when it suddenly shot up with news of Saudi Sovereign Wealth Fund investment of $2 billion along with a Tweet by Elon Musk saying that he wants to take the company private at $420/share. Trading stopped at 2:45pm for an hour due to pending news. Musk later Tweeted that funding is secured pending a shareholder vote.

Elon Musk of Tesla is backing himself into a corner. By Tweeting his intention to take Tesla private to bust short sellers might blow up in his face. At this point he will have to make it fully public that they will purchase shares back at $420/share or go to jail for market manipulation. If he gets goes to jail, Tesla will go to zero. Buying a long dated option might be a good idea but could also turn to crap.

The real story will come out in the next couple of days and it will go up to $420 or will go down past $300/share.

Profit From a Mostly Positive Day in the Market

The Nasdaq finished the day up which makes 5 in a row lead by Facebook, Apple and Amazon. Facebook opened higher and ran up for 6 today. That makes 20 points since I said it was a screaming buy at 166.50 after earnings.

Apple had a morning dip that created a buying opportunity for those who had not got in yet you could have bought it today for 207.55. It ran up for a new high today and would have been nice for someone buying Call Options a week or two out.

Alphabet (GOOGL) is in a trading range as I mentioned last week. It closes Friday on an up swing at 1238 and opened today at 1242 pointing down. I bought Put Options near open and should have sold them on the first dip at 9:45am for the best profit of 3 points. That was the maximum price for the 1230 Put Options even though it dipped to 1230 and change a little after 11am. At that point it was time to reverse direction as Alphabet would go positive for a moment a little after 1pm. I bought 1240 Call Options a little early and sold a little early too. I was still profitable  but I could have made twice as much.

I am looking for more downward movement on Tuesday and a recovery to begin late Wednesday afternoon. That doesn't mean that I will trade that way as I will read the market and what happens. We will probably hear something funky from President Trump that will create a huge movement in both directions one day this week as usual. 

Slow Day to Profit

Apple opened down some and went upwards not staying below the trillion dollar level for long. Sonos continued to go up today and pulled back some. Arlo broke off from Netgear with a successful IPO today with similar trading to Sonos yesterday. Most of FANG was down today and made some recovery towards the close today.

Alphabet (GOOGL) opened around 1246 and traded down to 1233 by 9:50am, came back to 1243 and fell down to 1229. It bounced off but wasn't much of a bounce for a positive trade up using options for the rest of the day.

Apple Great, Tariffs... Good?

Everything opened lower today with news about more tariffs on China. According to the experts, China has continued to devalue their currency, lowered their interest rates and are in debt. China will have to bend or they might break. Apple appears to be immune to the tariffs as their phones are made in China therefore they employ a ton of people and they are selling high end phones in China. On top of that, Apple's service business is the where the money is growing.

With the huge earnings quarter Apple posted, analysts expect that Apple is worth a much higher multiple and today it became the first company to break the trillion dollar market cap. I am not an Apple lover, but based on the numbers Apple should be trading for around $500 a share and Amazon should be at $200.

 


Speaking of things that should be worth more, did you see Tesla? As I said, it moved down a little and shot up. It may have more room to run, Sonos (SONO) entered the market today with an IPO at $16 and ran up to just under $21 by the end of the day. It should run further over the next few days.

Boeing didn't go positive, but opened down and bottomed around 9:40am before moving up to 350. It was a nice run if you timed it correctly because it went down before ending around that peak.

Alphabet (GOOGL) opened down 10 and dipped to 1218 before shooting up. Typically when it opens higher, it will retrace to go lower than the prior close as when it opens lower it retraces higher past the prior close. In the past 2 days it has traded between 1218 and 1244. Unfortunately I failed to trust what I believed and got out too early at the first peak.

Fed Meeting and How to Trade It

With the Fed meeting ending today, stocks have a tendency of being flat or down. Before the market opened, the 10 year Treasury Note moved above 3% which is a positive sign for banks and JP Morgan moved higher at open. It did trade lower from there but it is a positive sign for the banks over the next couple of days which should lead the market higher.

Boeing opened down from Tuesday's close and pointed to moving up from open until about 10:40am. At that point it went down for most of the day. I prefer to make money quick and would have preferred to buy Call Options on Boeing and be done before 11am.

Alphabet opened up from 16 from where it closed on Tuesday due to news that Google is going to censor their search engine to be allowed to operate in China. From history I have found that when it opens higher like this, it will try to return to where it closed the prior day before going higher. Buying Puts near open would have been scary but profitable. Buying Calls at 2:10pm would be a great deal also today.

Unfortunately I did not trade Boeing today and didn't trade Alphabet correctly. I was mad at 2:10pm, but didn't panic as I knew it was going back up to 1236 by the afternoon. I escaped the day with a loss, but not as bad as if I sold at the worst time. I write this blog daily in hopes that it helps someone but more importantly I learn how to be better because I am confident that you can make money in thousands every day if you trade properly based on technical indicators and knowing tendencies.

Elon Musk and Tesla had a great conference call after releasing earnings from the second quarter this afternoon. The stock shot up after hours over 30 points. I expect to see it come down in the first 10 minutes and shoot higher for most of the day tomorrow. I will trade it if the technical indicators make sense.