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.

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. 

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.

Tech and Media Up, Retail and Banks Down

• With the rise in the Fed Funds Rate you would expect the banks to be up. Interest rates actually dropped this morning and took the banks with them. JP Morgan actually dropped below 108 and bounced up some from there. 
• Boeing spiked up this morning shortly after the market opened to 367 and then fell sharply to 359 where it bounced up. I would expect a bigger bounce for the day on Friday, but don't believe I will be trading it.
• FANG participated to the upside today with Amazon, Netflix and Nvidia hitting new highs today. Alphabet opened up, dipped to where it opened and drove higher until 1:30pm when it gave back 10 points to go up another 5.  I traded the movement from 9:40am to 10:20am for a nice gain. 
• I heard this morning that Amazon Prime membership might have peaked and is feeling pressure from Walmart. Amazon is so much more that just shopping and apparently the market didn't believe that as Amazon hit a new high and Walmart faltered with the rest of retail.
• A retail name that did not falter much was Best Buy. Best Buy trades like a tech on some days and like a retail on others, but more like a tech. 
• Macy's, L Brands, Home Depot, Walmart and almost everything else retail related was down today after there was a very positive number regarding retail price index this morning at 8:30am. Verizon hit a nice bottom around 47.30 where it went up from there. Home Depot hit a bottom around the same time at 198.25. I would expect Home Depot to have it's regular Friday morning run tomorrow and hit 202 by the end of the day.
• Towards the end of the day there was news that the Department of Justice will not challenge the court ruling allowing AT&T to acquire Time Warner. Disney, Comcast and Netflix were up nicely. According to a chart maker, they see Netflix will hit 415 soon.

Thursday Market Craze

• Another day another way to clear President Trump from allegations. Many things have begun to spur the market higher. 
• Google had it's annual I/O developers conference at the beginning of the week where they announce new technology they will be producing. After such event, I have noticed that Alphabet (GOOGL) makes a strong run as it did yesterday. I thought it was a great time to buy a call when it was 1068. If you had, you could have quadrupled your money.
• Wednesday appears to be a turn around day like Tuesday. Boeing was up early, down to 338 and after sputtering there for about an hour it took off. 
• Unfortunately I sold out of my positions around 1pm. If I held another hour I would have more than doubled my profits. There was no turn back before 3pm on Wednesday.
• Roku was beaten down just under 31 a share since there last earnings report where they gave poor guidance. They started running up on Monday and on Wednesday was up 4 by close. They moved up another dollar after reporting their earnings Wednesday afternoon. I expect Roku to hit 50 a share in the next month.
• Sunrun (RUN) is my solar provider and they have moved up part of the energy run over the past few months. They continued higher after their earnings report Wednesday afternoon.
• The biggest news that the market didn't like was Walmart (WMT) buying a 75% in Flipkart which is larger than Amazon in India which is the 2nd largest population in the world to China. This is the biggest and best news from all of the earnings reports. CNBC's Jim Crammer loves Apple and Apple is spending $100 billion dollars on Share buy backs which does not equal dollars to shareholders. The tax reform should be made to make companies better through acquisitions and mergers rather than share buy backs. I expect Walmart to double in value by December.

Apple Rally While Other Bore

• FANG is alive and well with Apple having an above expected earnings report yesterday and shares continued to climb all day. Amazon, Google and Netflix were down more than up today. I thought Apple was a screaming buy at $162 last week, but that is where I bought before when they dropped to $152 and then went up to $180. They are on pace to hit $180 before falling again. 
• The Fed's announced that they were not raising interest rates and the market had a huge spike up at 2pm before falling for the rest of the day. I believe the Federal Reserve Board won't raise rates more than one more time this year because it has not helped lending and has actually tightened everyone's money despite great positive movement in the labor market. English: I don't know. lol
• Tesla reported a lower than expected loss after the market close today. Tesla ran up in the afternoon to $306, but fell from 2pm to market close. They were trading up 10 after reporting earnings. The Model 3 production was improved in the first quarter. I would not be surprised to see nice upward movement on Thurday.
• Spotify announced a loss after the market close. SPOT ran up most of the day before falling after reporting earnings. Square was another disappointment in their earnings call this afternoon. I think people will stop calling the a crypto currency play.
• Home Depot and Best Buy were strong again today. I think these 2 companies are huge positive signals for the direction of the market for the rest of the year.

3% 10 Year Treasury Note + Cat Forecast

• Caterpillar (CAT) earnings report beat forecast and was up but started to fade after the market opened today. The CEO projected their first quarter earnings being the high water mark for the year. From there the market as a whole took off to the downside. From CNBC Fast Money show they said that this was expected as their business is a cyclical business. Around the same time the 10 Year Treasury Note broke through 3% for the first time in a long time. Buying Put Options on almost anything were a great buy at this point.
• Verizon (VZ) peaked within the first few minutes of the market open and dropped quickly, but did not go negative. It ran up further, but didn't break that early morning high before falling with the rest of the market. I believe this will continue higher over the next couple of days along with the rest of the market as interest rates ease. Due to the low volatility of Verizon, I would not recommend buying options on them until their next earnings report.
• FAANG pain began. Facebook, Amazon, Apple, Netflix and Google dropped hard for the whole day. There were a couple of times it appeared they were going up, but they were just retracing their downward movement as they came down so quickly. Netflix bond offering was not discussed by most analyst as it was expected due to their high cost of producing content. Alphabet (GOOGL) numbers were huge and growing tremendously, but due to their increasing cost it was sold off today along with the rest of FAANG.
• There was news about Facebook (FB) user information being stolen and this may be the next shoe to drop that pushed Facebook back to its lows for the year. They release earnings Wednesday after the market close. I would be a momentum buyer of options on Thursday if it makes sense. Apple (AAPL) reports earnings next week but more weak iPhone sales are expected and the stock price continued lower. I am a buyer if the price drops to the low for the year around $152. I feel weakness in either of these means positive for Google as advertisers may leave Facebook and Google is the only other game worth dealing with.
• JP Morgan (JPM)  and other bank stocks moved sharply up within the first half hour of the market open before tumbling down below yesterday's low. They moved up to end the day and I would expect them to continue to move the same way over the next few days.