Profiting Huge Off $0.20 Moves

So many times I try to find the ones that devil, but many times you might miss your entry point, got in too soon, or got out too soon. Notice I left out got out too late. The goal is to take profits quickly, you should never allow yourself to get out too late. But many times the problem is you got in too early.

In the situation where you got into early, is often times better to take the loss where it's at don't worry about dollar cost averaging to make it better. Moreover if you do happen to benefit by dollar cost averaging and buying more when you do find the proper bottom, then the inflection point where you bought the first group at is probably set at the correct price and where you need to exit from the correct entry point. That sounds like a lot of mess, so let me give you an example.

Today JP Morgan appear to have topped around 114.70. I'm in money by buying 115 strike puts for $0.60 each. I made sure I sold them when JPMorgan got down to the point that it had hit in the morning around on 114.20 at which time I sold those for $0.95. So that was a quick profit a $350 minus commissions. So JP Morgan went back up close to that earlier Mark of 114.70 when I bought the same put options for $0.60. But there was a problem in that JP Morgan wasn't done going up.

JPMorgan topped in the afternoon at 115.07. at this time those put options were worth $0.38 a piece. So I bought more. And I had a large amount with intentions of selling at $0.60. It appeared that JPMorgan stopped at 114.68 so I exited the position at $0.56. my average cost was $0.52 on 50 put options for a profit of approximately $130. That certainly beat being down $700 in that transaction.

That would have been mad if I didn't take that profit and JPMorgan went straight back up. It did go up right after I'm foot that profit however it did go down further and those put options would have been worth $0.68.

Many Opportunities to Profit

I typically narow in on one or two stocks daily to profit from options. I feel it is best to know a stock so good that you recognize patterns that occur with it on a daily basis. I like using JP Morgan, I quit using Alphabet, Verizon is a fun one to make money on daily, Boeing is another one that moves and looks predictable,... I could go on and on. You can make money with options based on news for the day too.

Apple

Apple got a justified downgrade today based on limited device sales moving forward. That only makes sense if their service revenue is based on products that you get free other places and I could go on from there, but the point is Apple was set to open lower and probably fall further today. It failed to move up at open, so it was profitable to buy put options with a strike price of 200. You would have made a nice profit if you sold them when it reached 198. You could have made some money with 200 calls if bought at the bottom and sold when it peaked around 200.34. I did not investigate the options on it, but should have. See my chart to the right.

Boeing

Boeing has continues to have negatice news as a result of the grounding of the 737 Max. If somethinng makes the market negatice, Boeing likes going down with it.

Boeing had some nice movement up from the opening price, but failed to go hgher on the retest which would have been a great opportunity to buy put options. Call options could hav been purchased at the bottom, but it most likely was not going to reach the morning highs like JP Morgan.

I strongly believe and found that holding an options day trade for more than 90 minutes creates a losing position. 

JP Morgan

JP Morgan opened lower from Friday's close. It found a bottom at 112.50 and shot up from there. It came within penny's of break even for the day. If you bought 114 call options when it wsas at 112.50 at .35 and when it made it close to break even, you could have sold for .55 at a nice profit. At that peak, you could have looked for a place to buy 113 put options and wait for it to come close to the morning bottom.

Timing Summary

• Apple
• downside 25 minutes
• upside 1 hour and 20 minutes
• Boeing
• downside 1.3
• JP Morgan
• upside 20 minute
• downsie: from 11:20 to 3:05

Summary

It doesn't take all day to day trade. The key is to recognize when price is going to be spring loaded in one direction or the other, Do not expect it to continue throughout the day. Take profits quickly and do something else for the rest of the day.

Hopefully my blogs show you that there is money to be made with the market, but hopefully you understand there is a level of risk and if you don't time your entry and/or exit points correctly, you may be luck to break even or escape with a small loss.

Be paitent

Take quick action

Prepare to exit quickly if you are wrong

Prepare to exit quickly if you are right

And most important, sign up for a free papertrading account with Think or Swim, ETrade or Schwab. Learn the strategies and don't waste money.

Holding Until Tomorrow Rarely Works

In the second half of my blog yesterday, I discussed buying Verizon call options when I realized the shares were at a short term floor. Yesterday I also noticed that JP Morgan was at a short term ceiling at $114. I bought put options on JP Morgan yesterday for just under .60 on 10 113 July 5th expiration. I didn't sell when I should have when the options were trading for .85. Instead I held the options over night while JP Morgan closed at $113.80 on Tuesday.

This week is a shortened trading week with the markets closing at 1pm on Wednesday in celebration This is why I title my blog "Day Trading with Options." Don't hold options that expire in the same week over night because you will be disappointed more times than profitable.

for Independence Day on Thursday. The US markets will reopen on Friday, but holding options long that expire this week is investing suicide and here is why... Those 113 put options closed Tuesday at .47 while the stock closes slightly up at 113.80. On Wednesday, JP Morgan opened near 113.20 and those put options went down to .32. I did not panic and decided to wait and target a selling point near yesterday's high. I placed my limit order to sell at .80 and it got hit while JP Morgan stock price dropped to $112.30. Not only was the option out of the money yesterday when it traded for .85, it was 1.20 higher than where my options sold today.

Typically, you may buy back the same options you  had the prior day at a lower cost even if the stock moves in the direction of expectation due to the loss of time until expiration. 

This brings me to my 2nd point of the day... Many times we sell at the right time and made a profit for the day and we are looking for something else to buy. This is one of the biggest things that hold back traders from staying profitable on the daily basis. At the time we sell, it doesn't mean that the stock you were following is going to reverse position and it doesn't mean that something else is going to reverse position. When a trader does this, they typically are not buying at the right time and set themselves up to take a loss. Then because we got in at the wrong time, many traders will hold this losing position too long. Stops must be in place to exit when the trade isn't going your way.

Don't buy something right after taking a profit.

And finally, I realized something else yesterday when looking for the right selling point to take a profit in your option trade. You can use a similar method to find the right entry point to buy your option contracts. Typically, I like to look for options that I can double my money in one day based on the same stock movement for the day. You can actually look at the high price of the option that you are looking to buy and base your entry point far below as much as half. This way if you enter at the right spot, you can expect to exit at a profitable spot.

When holding a Day is Bettter

I try to keep my trading more simple in hopes of reducing errors and maximizing profits. I made a bunch of money trading Alphabet (GOOGL) in the past, but have lost much more. I appreciate sticking with stocks that move both directions in a day most of the time. This is true most days with JP Morgan. JP Morgan runs up, comes back to where it started the day, runs up again and comes down again... and might finish up.... or down. If you are disciplined, you can make money trading the options of JP Morgan.

Daily Pattern Trading

The really cool thing when trading options is that you can get a similar price after it has made part of the move in the direction you are expecting. For example, JP Morgan traded around $114.50 Monday morning. At that peak, you could have bought a 113 strike put with the expectation of downward movement for .50. It went down and then it retested that peak when it was at $114.20. During that second peak, you could have bought the same put options for .50 again. JP Morgan then went down near where it started the day around $113.30 and you could have sold those put options for over 1.00.

Today was similar as JP Morgan shot up to $114.20, came down and back up to

$113.92. At both times you could have bought the 113 strike put options for .50. Near open they were worth .79, so you must use that as a reference point where you wold need to consider getting out. Please see my  illustration of JP Morgan for 7/2/19. If you would have bought 10 of those put options for .48 ($448 cost) and sold them for .80 ($800), you see you would have profited $350. That is not a bad day job!

The problem we get is getting greedy. When there are no catalyst involved that could push the stock lower, we don't need to expect it to go lower. Take your profit and move to trade another day. I wrote that because that is not  what I did. I should have sold at .85 and would have been happy, but I was already unhappy with myself for buying at .61 instead of being disciplined and placing my buy order for .48. It would have been executed.

When To Be Greedy

If you follow certain stocks, you know they trade in a range. Certain stable companies get a little over sold and then get a huge push the next day. It happens with more stocks than you think if you pay close enough attention. AMD comes to mind and even IQ has made it to $18 before moving sharply up to $21 in a day. Verizon is more solid that those and their options are cheap.

Verizon has sold off from the $58.20 mark a few times in the past 9 months. Most of those times it finds a level of resistance on a Friday. It moves lower on Monday, but not by much. Then on Tuesday it spikes up over $1 to over $58/share. There is a safe way to play it and an aggressive profit spiking way to play.

On that Monday afternoon, you could buy $58 strike call options 2 or 3 weeks out. This would be safer because you do have time on your side to wait for the gains. I bought July 26 $58 strike calls yesterday at .28. I placed my sell order today as it was going up to get .50 and they sold while finishing the day at .68 which is more than 2 times your money.

I am aggressive too, so I bought $57 strike calls when it was trading for $56.80 on Monday at .32. If I were more patient and noticing the pattern more clearly now, I would have waited or placed my buy order with a limit price of .22. At that price, I could have bought 15 and it spiked this morning above $58 and could have sold those calls for over 1.00. That's 5 times your money in one day!!!

The subtitle is when to be greedy. I write that because I profited on this trade twice this year and both times I sold at 2 times my initial investment instead of 4 times minimum. I hope to do better next time.

There is a possibility that it runs up higher over the next couple of days, but there is also a possibility that Trump says China lied and more tariffs are coming just to tank everything quickly.

I am quite sure that 10 years from now, there will be a huge investigation on how President Donald Trump manipulated the stock market by telling certain personal stock traders the news in advance to buy puts on the market and calls when he had favorable news. The scandle will discuss how much money his family profited by this manipulation. Then right after he goes to trial and is found guilty, he will pass from heart attack or something. It just looks like a pattern of evens similar to watching certain stocks move in the market.

Patient Day Trader Follow Up

The past 2 days I have analyzed some day trades for profit in my blog. I specifically looked at trading JP Morgan call and put options. I have used Charles Schwab for trading in the past couple of years, but am transitioning to E-Trade as they have more powerful tools to use. E-Trade allows you to actually view the charts on the specific options. Obviously you can not trade options based on stocks without having an idea of the stock movement and direction or you would not know if you should buy a call or a put option.

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Initial movement on Wednesday was to the upside. I did not like this trade because there was no retest before just shooting higher. If you timed it perfectly, you could have bought the 109 calls for .7 and you had better have sold them for just under 1.00 or this trade would have been an ugly loser quickly and would not have broken even.

If you were the patient investor, you could have waited for a great opportunity with better signs in the afternoon when JP Morgan peaked around 109.30 and you could have had a nicer chart of the option to base your trade.

Now when you look at the chart of the 109 put on JP Morgan, it was at it's lowest point at the morning peak. What was really interesting is the value was the same later that afternoon although the stock was lower than the morning peak.

As I mentioned in yesterday's blog, the Pivot Point on the graph designated 108.65 as the proper exit point. That was where the put was it's highest value in the afternoon of .70 which is a nice profit from .4.

Thursday was similar to Wednesday. There was morning move up followed by a sharp move downward. From the bottom, it moved up, but not to the level it was at in the morning spike. I gave much more detailed writing on this chart of the 109 put option on JP Morgan.

Friday was a little scary, but you could have made bigger money if you were working with options that expired that day as long as you stay at the money on purchase at time of purchase. 

• JP Morgan opened at 111 and spiked up to 12.56 approximately. At that time the 112 put options that expired 6/28/19 were worth .16 to .19. If you were to buy them there, you could have held them for it to come down to where it started at 110.97 and sold them for 1.05. 
• After bouncing from 111, JP Morgan ran back up and peaked at 112.22. At that point, those put options were trading for .18 again. I bought 13 just under .22. 
• JP Morgan moved down slowly, jig sawing from 111.90 to 111.75. At that time I received a call from Charles Schwab Derivative desk telling me that I better sell them or they will be forced to by 3:30PM. 
• I was thinking I should be able to sell them for at least .60 and triple my money. I got nervous and didn't want to sell for a loss. I placed my limit sell for .38 and .40. It just appeared that it would not go down further. I lowered my limit to .35 and it was still teetering between 111.72 and 111.88. I lowered my limit to .32 and it got sold pretty quickly. 
• After that JP Morgan dropped quicker. I saw those put options were worth .4, then .5, then .6 and finally .85 when JP Morgan reached 111.12. At this point, around 3:30pm, JP Morgan shot straight up for the rest of the afternoon. Those put options were worth .2 by the end of the day. 

That whole process was a little nerve racking, but I felt like I did fine. I might not

have felt as pressured if I didn't receive the call from Schwab telling me to sell the options before they do it for me. I could have made decent money if I were using options expiring next Friday, July 5, 2019 as shown in the chart to the right with 112 put options.

The next chart shows what the price movement would have been like if you were to buy 111 put options expiring July 5, 2019. The profit was not as big trading these that were just a little out of the money and were never in the money during Friday's trading session. This offers nice reference that buying out of the money options even with a week until expiration if not as profitable as at the money with this price movement. 

I hope you found this blog interesting and informative. This information is based on what I saw and I like to reflect in hope of perfecting my entry and exit points throughout the day for making profits buying and selling options. They key is that you can expect to buy at the same low price or lower, but you may not get a higher price to sell when it is exit time. 

I like to describe stock movement as a rubber band. If you stretched out a rubber band and plucked it from one end, the waves would be larger near the pluck, but in time smooth out to come back to a neutral position.

Patience Leads to Profit When Day Trading

Money can be made on the market going up and down daily especially with options. There were sharp movements today with Boeing, JP Morgan and Home Depot. I tend to stick with these few stocks because they have decent daily movement and you can profit nicely with as little as $500.

Boeing

Boeing had more news over night as the FAA found another problem that needed to be addressed with their max airplane before being allowed to fly again. The stock moved sharply down almost 10 points from Wednesday's close. It popped at open, went down, came up a little and retested that low before rising up for most of the day. It had a sharp move up around noon as shown in a 1 minute chart.

What I have noticed it that when it has a sharp move up, it make get another move higher, but will have a sharp move downward by the end of the day. That is exactly what happened at 3:45pm when it was announced that Southwest Airlines is canceling their order of the max jet. This is too late in the day to expect to happen, but it has shown to happen multiple times in the past month. You could look at Wednesday's chart when it was moving up and then sold off in the afternoon. If only you held those afternoon puts until Thursday. But we don't do that when day trading options because it could have easily had good news that moved it up to 390 similar to what happened with the banks today. I drew up some notes on a chart for you to study.

JP Morgan

Today's movement with JP Morgan was similar to yesterday, but quite different in the pattern. To start the day, JP Morgan opened higher than yesterday's close. There might have been a moment near open when you could have bought calls, but I don't like it because there was no guarantee that it wasn't going lower as a retest. It ran straight up, topped and sharply moved downward. The move offered no retest of the peak and no retest of the lower areas as it moved sharply up from the bottom. I did not trade these movements because they did not show good entry points for day trades.

The afternoon high was not as high as the morning, but it did show that it was peaking around 109.30 as it moved downward before coming back to that area. When it was at 109.24 I bought 109 puts at an average cost of .43. I went to the bathroom while monitoring the stock on my phone and saw it went slightly higher for the second peak at 109.36. Unlike yesterday, I did not lose 10 cents an option this time. This was true mainly because I bought 109 puts that were closer to being in the money compared to yesterday when I bought 108 puts that were still 50 cents out of the money in the afternoon.

I was not worried because every time JP Morgan touched 109.36, it went down quickly and did not hold that price. After the second time, the stock started falling. I bought 3 more when it was at 109.31 at .41. I was hoping to be able to sell these options for .8 or .9, but realizing that they expire tomorrow, I knew the premium was going to decrease based on the less time to expiration. I decided to target my exit based on the morning drop and utilizing the Pivot Point of 108.65 from my trading software that displayed the Pivot Point.

Sure enough, JP Morgan made it to the Pivot Point of 108.65 which was slightly higher than the morning low. At this point my put options appeared to have topped out at .70. I placed my limit order for .75 and lowered to .72, but the stock appeared to make a reversal, so I finally got it sold for .69 which created a profit of $320 on my 13 contracts.

That might have been a good point to buy calls for the next day if I did not mind holding options over night. But that is not what I do. JP Morgan moved sharply to 108.90 before closing around 108.80 and those options would have been worth around .60. After the close, the Federal Reserve announce the results of their stress test and JP Morgan along with all of the other US banks moved upwards big time. JP Morgan moved almost 2 points higher. They also announce dividends and stock buy backs.

Friday Expectations

As we enter the weekend of the G20 summit and escalation of trade meetings, the market should open higher on optimism and on the back of the great bank news. It would be awesome if the market would close on the highs of the day, but given that it is also that last day of the quarter, we might see an afternoon sell off that drops us just above the flat line. We might not have a sell off, but just because Alphabet is near it's low point for the week doesn't mean it will automatically head higher and stay there. Buying expiring options is dangerous on Friday, but as long as you are making sure they are in the money, you can make money doing it. Buying options for next week is a safer bet and does not require you to buy so close to being in the money to make profit.

Make More Money Waiting

Making money with the stock market in the long term is a buy and hold strategy utilizing stocks with great dividends like Verizon. When you day trade, you must wait for the right buy signals. If you are not disciplined, you will be buying early and late and selling early and late. When you see certain patterns, you have the tendency to buy expecting that pattern based on the day of the week or just plain wishful expectations.

Not waiting does not only shorten your earning potential, it can cost you for your day profit and create a loss you can't dig yourself out of for the day. Let's break down expectations and timing utilizing JP Morgan activity for the day.

Initial Move for the day

The first movement of the day may not be more than a reaction in the opposite direction from the prior day's movement. If this is the case, the theme is likely to continue from the prior day. Alphabet (GOOGL) was a perfect example of this today.

On the other hand, some stocks like JP Morgan go up and come down in the same day which ultimately create net gains for the day. Today looked similar to yesterday for JP Morgan as it moved sharply up from market open. When that happens, you wait for the pull back to  a near open price to buy calls for the upside. On my chart drawing, I mark it with a yellow "A."

Now you are going to let this run until you get 2 consecutive red candles which designate resistance when looking at your daily chart with 5 minute intervals. This is not the time to sell as it must retest the top. When it does, it typically goes slightly higher. You can sell at this mark or place your trade when it retest that mark again. You will know it is a retest when it reaches the same spot, but the stochastic lines have peaked at a lower mark. The second way is based on peaking in the price chart with space between the top of the Bollinger Band (B).

Secondary Movement of the Day

When you have noticed the top has formed. You locate the first out of the money put option and buy at or near the lowest price of the day. Once you are in on the opposite direction, you must be patient and withstand upward movement as long as it doesn't move dramatically above the pre-established ceiling for the day.

Now to determine the exit of this 2nd position of the day, you should look at where the area was that you bought the call option on the first movement of the day. It is almost safe to aim for the point to take your profit and get out. There are many days the reversal is stronger than the upward movement. It is nice expecting it, but if you enter and exit at the right locations, you make profit and are not holding like I did today just to break even.

Further Notes

The strategy works with many stocks, but not every stock has 2 sharp movements in the same day. You can say that most stocks move in one direction and give part back towards the end of the day, but then there will be that one day that it doesn't give back towards the end of the day and you were expecting it. The key is do your research, know your favorite stock tendencies, get in and out to take your profit daily.

Why I Broke Even and Didn't Profit Today

I bought my 8 initials calls at the right moment today. I freaked out with the 2nd large red candle instead of waiting for the retest as I have seen almost every day. Although the stock was higher than where I bought the calls, because the calls were out of the money, I ended up selling at a break even minus commission. I would have been up over $120 if I were patient and sold at the 2 peak.

On the secondary movement, I bought my puts before waiting for the top to form. I have made this mistake before, so you would think I would have learned, but this is why I am writing this blog. No matter if anyone else reads it, I expect it to create a more powerful memory to act appropriately in order to profit off small movements rather than break even or lose money.

So I bought these 108 strike puts in a market order at .48. If I had waited, I could have placed my order to buy them at .36 and would have bought a third more contracts. I did buy more at a lower amount, .44 which is still not .36. I did not panic although I did have 15 contracts with an average cost of .48 that were worth .36. My account was negative $200 at the worst part.

As I mentioned, I did not panic and knew the downward movement was due with all of the red candle following the peak of the day of 109.30. It moved in my direction, but unfortunately the highest these puts were worth today was .54. I did not sell there because I thought it might fall move sharply towards the end of the day. I was greedy and disappointed based on not buying at the right time. If I had bought at .36, I could have sold at .50 with a different of .14 times 20 contracts for a profit of 280 minus commission. Instead I sold at close for .48 to end the day break even minus $20 in commission.

Day Trading with Options Fresh Start Rule

Part of day trading with options is closing out your position by the end of the day. Each day goes by, the options are worth less if the price of the stock opens tomorrow where it closes today. The only time the option is worth more is when it move substantially at open the next day. Most of the time, even if it opens in your direction, you can buy those options for the same price you sold them the prior day. Therefore the odds say, you are more likely to lose money holding options over night. Like anything, holding options over night could work one time, but more times than not it will not work in your favor.

Tomorrow is a new day and as long as you did not buy options based on hope instead of indicators, you can make tomorrow twice as good as today.

Friday's Sick Market Movement

After going down sharply on Wednesday and further on Thursday, the markets opened higher on
Friday. The peak came quickly and the market reversed almost all of the gains by 1pm when they reversed to go higher. JP Morgan and other banks reported before the market open and the big banks beat their earnings estimates. JP Morgan opened higher above 110 and sold off below Thursdays low to break under 106 before bouncing to go higher after 2pm. I expected this as it appears to be a common theme with JP Morgan.

There are more bank earnings in the following week as we will hear from Bank of America and Goldman Sachs. The difference is JP Morgan will move up after open and sell off for most of the day. I would expect it to retest the low from Friday by Wednesday. On the right is my chart from Friday on JP Morgan. I did not expect to see it fall as far as it did and would have taken profits early and been happy. I don't know why I didn't follow through with this trade.

Alphabet (GOOGL) closed on Thursday at 1090 and opened Friday at 1119. It peaked early to 1122 and moved down from there. In past Friday, when it moves down, it doesn't appear to change directions to move back up. Friday was similar to the prior Friday when it moved down and changed direction at 1pm. I did buy a Put Option, but at the wrong time. I
keep telling myself that I need to wait for the retest of a lower upward movement before buying the Put. If I had, I could have tripled my profit. Instead I bought too early and sold too late to suffer a slight loss which obviously is not a profit.

I did draw up a chart showing the upward movement for the last couple of hours of the day, but I would not recommend that as it is too risky trading options on the day of expiration. It might be a good time to get options for the next week. I would not recommend holding options for the next week as I expect a retest of the low before moving up. That is exactly what happened as Alphabet moved down to 1099 before moving back up to 1120 on Monday. It did fall off after coming back up to 1120 which looks more like another double top to signal more downward movement.

I think more downward movement might be coming very soon as Netflix reports on Tuesday afternoon. It was just announced a few days ago that Netflix is not bringing back Iron Fist for a 3rd season after ending the 2nd with a cliff hanger. Last quarter Netflix dropped hard after not increasing subscribers as much as the market expected. I think that might continue as Netflix recently stopped Apple from taking a share of subscription revenue by removing the subscription opportunity from the Apple Store. For users that were paying for Netflix through Apple, I am sure it is not that big of a deal to switch over to pay Netflix directly. The main question is how long will it take for those subscribers to change over. I think their revenue will increase for the quarter, but subscriber growth will not occur and force the market to try to sell off Netflix again. When Netflix sells off, it takes Facebook, Amazon, and Alphabet with it.

After Netflix earnings, it will either go up or go down. If it opens up on Wednesday, I would expect to see an early peak followed by a sell half of the difference. If it opens down, I would expect more downside with a reverse on Thursday from a much lower base. Therefore, I would like to buy a Put Option on Netflix Wednesday morning regardless of where it opens.

Market Update to Trends

The Dow finally hit a new high this past week on strength from Boeing and JP Morgan without help from Apple. Since Boeing was at $337 it has rallied to $372 which is only a few points away from its all time high. JP Morgan rallied within pennies of it's all time high established earlier this year on the back of a strong 10 year Treasury Note rate above 3%. This week everything is going to be tested if the Fed raises the Fed Funds Rate on Wednesday. If that rate goes up, everything will come down for the next day with a reversal happening mid day on Thurday.

It might be surprising that Apple is not participating in the rally especially since they just introduced the most innovative technology to come to wearables with their new watch being FDA approved to perform electrocardiograms. Those who still have a iPhone with a button will probably upgrade in the next few months so Apple's future looks pretty strong and even stronger as everything is funneled to their service business. I see Apple setting up to be a huge long term play although I would never own a Apple product because I feel Samsung is far superior. 

So what is going on with FANG? Facebook, Amazon, Netflix and Alphabet all appear to be in trading patterns for the next couple of weeks. Facebook is floating between 158 and 165 and may trend further down after reporting earnings despite having no debt. Amazon passed a trillion in market cap and came down from there to trade in a range. I feel it is still over priced and we might get something funky from their earnings to show that they are not growing subscribers and earnings slow down. Netflix domination in subscribers will not be affected by other companies trying to take market share as Disney is not close. Alphabet's Google appears to be the beneficiary of problems with Facebook although you would not be able to tell it by the stock price. 

Alphabet (GOOGL) along with FANG is in a trading range. Netflix is trading between 350 and 372 while Alphabet is trading between 1160 and 1195. For the past couple of weeks we have seen Alphabet close around 1190 only to drop 15 to 20 points on Friday and a little further on Monday. Tuesday's have been up and Wednesday's have started down near the low for the week that was established in the last week but moving up for the rest of the day on Wednesday and Thursday only to fall again on Friday. This is almost identical to what happened last year when Alphabet was trading between 918 and 942. Last year it broke out higher 2 weeks before earnings as it passed the prior high and shot higher after the earnings for the 3rd quarter were announced. 

This brings me my next blog as to what happened with the 4th quarter earnings, the first half of 2018 and the Trump policies. 

FANG is Struggling but not Dead!

• The Dow Jones was up today which was surprising given how so many people do not like how friendly President Trump was when meeting with Russian President Putin today. Boeing had a nice move upwards today and Amazon opened above it's all time high that was just set on Friday. It moved up sharply and at 3pm when Prime Day starts, they had website issues and it went down along with the rest of FANG. Facebook did hit a new high this morning also.
• Netflix was downgraded again today. They opened to the downside, moved up, but the big news was their 2nd quarter earnings report. It was announced after the market close on Monday and it went down over 50 points due to not increasing their user base as expected along with the expectations of new competition. 
• Alphabet (GOOGL) initially opened down and moved up sharply this morning. After it's peak around 10:20am it went down and further down. There was a nice move upwards in the last half hour after the big drop from Amazon. I do not like holding options over night because you have no control of your contracts in the after hours. Alphabet dropped down below 1180 in the first half hour after close and came up a little. There is no telling what is going to happen tomorrow with the FANG names as it could depend on Amazon's Prime Day success, what is said on the Netflix earnings conference call and if money leaves other FANG names to go into a more stable Alphabet. There were some opportunities using Call Options with GOOGL today that I will illustrate below: 
  
  
  
  
• Bank stocks lead by JP Morgan moved higher on Monday. It was strange how JP Morgan didn't move up after reporting earnings on Friday. It may move even higher on Tuesday if Goldman Sachs produces favorable numbers before the market opens on Tuesday.

Dow Drops Again to Start the Week

- Retaliatory tariffs from China started everything down on Monday. Boeing was a big drag as was Intel.
- Intel might have been down, but most tech stock ran way up. Amazon and Facebook hit new highs. Alphabet was up big the whole day after the announcement that they are investing $550 billion in JD.com. Alphabet has a lot of catching up to do with the over bought Amazon.
- Best Buy was the leader when it comes to retail today. Macy's and others ended the day near even which brings me to think that Best Buy has runs like a hybrid retail FANG stock.
- JP Morgan started lower and had a good run back to the 108 mark. I expect it to get up to 110 this week.
- Other than that it was a boring day as most stocks were trying to play make up to Friday's close.

Market Drama, Dow Drops and Tariffs, Oh My!!!

• We woke to news that President Trump was going to impose tariffs on China again. After what appeared to be a successful meeting with North Korea's Kim, this might be a surprise that the tariff talk is heating up again. The market dropped on this news from open.
• The tech stocks had nice runs the whole week even despite the rest of the market being down on Thursday. Friday they remains pretty even. Some were down and some were up, but Apple appeared to be down a little more compared to others. Apple was going to make all new phones with the high resolution OLED screens. Due to higher priced materials increasing the price of their phones, Apple has decided to keep the course unchanged and remain with their standard LCD screens. I doubt that means they will drop the price of the new phones as they will continue to try to get $2 out of 3 quarters.
• Boeing dropped hard in the first hour of trading on Friday. It had a nice run up from 2:30 to 3pm only to give most of it back to end the day unchanged, but down for the week.
• Home Depot had it's regular Friday rally first thing in the morning. It appears to be the one stock that you can load up your Call options on it's low from Thursday  and sell by 10am on Friday. Sure it went down, but not below where it closed on Thursday and went back up higher.
• Return to retail was lead by gains in Best Buy, Macy's and L Brands. I like these for their high dividends and positive track record this year. I have found that when you have these in your portfolio, they are good to sell Call options when they hit their relative highs in about 10 days.
• The same is true for Verizon who went down with AT&T over the past couple of days. When Verizon hits $49.50 it is good to sell a Call option against your position. At the same time a speculative person would consider buying a Put options to sell when it hits $47.50. I don't know if you will be that lucky because if Verizon follows AT&T, the bulls will run up the price over the next couple of weeks since the AT&T acquisition of Time Warner is going through right away.
• I found that JP Morgan bottomed this morning when it got down to 106.27. JP Morgan has traded in a range between 106 and 110 over the past month. It ran up past 108 after that and came down a little. I expect it to go up more this coming week as interest rates will settle in. You might get another chance to get it at 106 next week, but not likely.

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.

Tues/Wednesday Market Gains... BOOM TESLA!

• I am starting to sound like a broken record as Amazon and Netflix hit new highs today... but they went down along with almost all of technology stocks on Wednesday. Retail stocks were up again on Tuesday lead by Macy's and Best Buy, but they were slightly down on Wednesday. 
• Tesla was down some on Tuesday, but with a positive shareholder meeting on Tuesday drove the stock dramatically higher on Wednesday blowing through to 321. I saw Tesla hit a bottom on Tuesday and thought that was a good time to buy a Call Option. You would be up so big if you had done that yesterday and held it today.
• Banking stocks led by JP Morgan were up on Wednesday as they appeared to be left out of the rally over the prior week. This was spurred on by rising interest rates on Wednesday.
• Boeing led the Dow Jones on Wednesday as it broke out to a new all time high.
• Alphabet (GOOGL) was under pressure on Wednesday as there is a threat in Europe of being fined for their integration in Android phones. It was flat on Tuesday and down on Wednesday. I believe it is still trailing other technology stocks and has much room to move upward for the next couple of days. 
• I would expect to see more positive movement for banks over the next week. Oil stocks have lagged and have room to come back up also.

Friday Market Boom!!!

• Trump Tweeted late last night that he can't wait until the jobs number is released this morning. It was a good one and the market reacted positively.
• FAANG hit new highs today. Facebook, Apple, Amazon and Netflix hit new all time highs today. Alphabet (GOOGL) had another day with a big run up. It closed Thursday at 1100 even and shot up to 1138 which makes 70 points in 3 days! Apple is hosting a developers conference next week. I would believe that FAANG will run up next week and Alphabet will break it's all time high by the end of the week, but might fall next Friday.
• Ford released sales numbers that were up .7% when it was expected to be down 1.4%. Many think that GM is the less expensive stock, but Ford is restructuring and going to excel in the long run.
• Sunrun (RUN) hit a 52 week high today. I am fond of Sunrun as I went with them to put the solar panels on our home. I believe they are over looked in the solar sector as they make a profit and most others have not reported a profit.
• All most everything was up today including the banks like JP Morgan. Boeing ran up quickly to 358 in the first 15 minutes then fell back below 355 and ended the day just under 357. 
• Yesterday's reaction to the tariff talk was mild to the downside. Today's positive job report erased every one's memory of what a tariff is. Now that earning season is just about over, geopolitical concerns may be all that drives the market.

Profitable Wednesday Marketmakers

• Everything was over sold on Tuesday. Especially the banks as JP Morgan was in the 105 area and if you bought Call Options on almost anything (except Apple) you would be very happy when you sold to take profits around 3pm. Oil had a nice pop too as it too was over sold and the oil sector was nice today. I saw Halliburton was over sold as it dipped to 48 on Tuesday.
• Apple received a downgrade this morning with doubt that the service revenue would keep up. I am not an Apple lover, but this news is fake!
• Boeing took off as it was way over sold on Tuesday but held above 350. Buying Call Options by 10am in Boeing would have been nice a couple of hours later.
• Alphabet (GOOGL) dropped sharply on Tuesday, looked like it was taking off early before falling back down to slightly below where it closed yesterday. If you bought Call Options at 10am, you could have sold them just after noon for a nice profit. Google then dropped and took off again by 2:30pm to 3pm and then again at 3:50pm. 
• NOTABLE: I saw Tesla in the news again this morning as one of their vehicles in auto piolet hit a parked police car. I thought this would for sure send the stock lower today. Tesla took off to the upside as Consumer Reports gave an upbeat report on Tesla's improved braking.
• TRADING TREND: Google has demonstrated a pattern over the past 3 weeks to go up in the first 20-30 minutes of trading on Monday and Tuesday only to drop for the rest of the day. Wednesday's have started higher, fallen back to the opening price by 10am only to take off to higher levels for the rest of the day. It does appear to peak around noon.
• MARKET TREND: Thursday's have started off going down for the first couple of hours due to tariff or other political news only to reverse direction by noon if not 11am. I would expect more of the same tomorrow as it was announced after market close that the tariffs were going to be enforced for European countries. I don't know how this changed from Asia to Europe, but I guess we will see what happens in the morning.

Amazon to Splat!

• Amazon ran up so far yesterday that it ran too far and went down today along with all of technology stocks. Google, Apple, Intel, Netflix,... everything went down after open. There was very little upwards movement, but the downward movement was not dramatic. Everything ran up with positive earnings this week made Friday a day to breathe. Even through earnings I have noticed that Google has shown resistance on Friday of each week where it has a nice move upwards. 
• In political news, Trump appeared to be mending fences with Germany. He basically said that Iran needs to put up money to fight Isis and they are not allowed to be nuclear armed. The investigation of Russian involvement with Trump's presidential campaign ended with no proof of collusion as Trump stated before. Korea appears to be uniting. So all appears to be getting better in the world today. Surprisingly the stock market didn't appear to notice.
• Everything went down before recovering to finish the day flat including Home Depot and Verizon. Good money could have been made buying calls at the early drop and selling about 30 minutes later.
• After the market closed it was announced that the merger of Sprint and T-Mobile will be completed. Given the 2 worst reception cell phone companies are merging, their new name should be Splat. I thing that is a better name than Worst Mobil, Hopeful Mobil or Almost Good Enough Mobile. WTF (WiFi Telephone is Fine).

Amazon, Chipotle Crazy Good!!!

• Chipotle's big earnings report was rewarded by doubling last night's gain today. They were the biggest winner until Amazon reported earnings after the market close on today. Not only did they beat their numbers, they announced that Prime Membership cost is increasing from $99 to $119 a year. Amazon's stock price jumped $100 in after hours.
• Microsoft and Intel had great earning reports after market close today also. I enjoyed trading Google options today as they started off lower from 1035 down to 1020 which is where I bought my 2 Call Options with a Strike Price of 1030 and sold them when Google hit 1040. I was done for the day, but Google wasn't done running up as it hit 1052 before closing at 1043. I expect similar movement on Friday on the heels of Amazon's huge day.
• Home Depot was up huge. HD has been in the cross hairs of professional investors for over a month looking for a break out. I didn't see anything new about them today so I hope to see they maintain the gain on Friday. 
• JP Morgan had a hard time getting out of the red today, but did end higher. Now that the tech companies are blowing away their earning reports, the banks look less exciting even with a rising interest rate environment. Apple was up and then down today. Boeing fell early, came up quickly, didn't come down to the morning low and by the late afternoon past the day's high above 345.
• Verizon was hampered by AT&T's weak earnings, but still finished the day close to even.

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.

More Apple Pain and Higher Rates

• If you are day trading with options, I always recommend closing out your positions by the end of the day because when the market is closed you are stuck with what ever news or sentiment is rolling into the next day. Apple opened slightly down and fell like a rock within a few minutes. Trailing stops are important to lock in your gains and reduce your losses. When you are down by .50, get out and don't buy more.
• Yesterday the banks were up for most of the day while most things were not. Today they opened higher and fell without upward movement. Yesterday interest were up and was believed to be fueling the bank rally, but today the 10 Year Treasury Note hit 2.95% for the first time in a long time and the banks did not raise up. (JPM reference)
• Google experienced more positive ratings and it opened down, but came up sharply to 1094 before falling 20 points, coming up 10 and going back down for the afternoon. I would have expected it to rise more throughout the day along with Amazon since they report earnings next week and everything that we have heard so far is positive. I mention this because Google options may be expensive, but they move and when utilizing Scholastic indicator you should be able to time when to buy/sell a call or put option. There is good movement but not over priced options with ridiculous movement of Amazon. 
• Political news rattled the markets this morning with the Democratic Party looking to sue Trump's party along with Russia intelligence over the last presidential election. I would call this a sneeze when something political happens and the market as a whole moves down sharply. 
• Given that today was the third day in a row where the market was down, I would expect the stock market to open higher at open on Monday. Look for a pull back by 10:30am as an entry point. I am sure we will hear something about Apple demand being good and they are diversifying away from past suppliers to avoid tariff issues moving forward. Apple has bounced off this level a few times over the past couple of months.