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. 

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. 

Investing in the Ups and Downs This Week

• Interest rates and oil hit highs at the beginning of the week only to drop by the end of the week. Bank and Energy stocks rose and fell the same way this week. They should have a nice bounce starting on Tuesday.
• Boeing hit 365 on Monday afternoon and fell back to 351 on Wednesday where it bounced to 359 and finished the week there.
• Wednesday and Thursday looked very similar. Morning drops were reversed from noon on. Wednesday news was from the Federal Reserve and Thursday was from President Trump and the tariff front.
• Netflix (NFLX) was a huge success once it was announced they will have a special on former President Obama. It shot up on Wednesday and Thursday and ran out of steam on Friday while still finishing higher. I would expect it to hit 375 by the middle of the week before coming back.
• Home Depot (HD) came down on Monday and Tuesday and bounced off 175 to go higher, but it didn't run away. It appears that it has a new level to bounce off at 175 as Walmart bounces off 82. Walmart is a hold for me as the further it goes down, the more valuable the dividend becomes. I feel Walmart is one of the only companies in the US that is using the tax break to get bigger rather than wasting it on stock buy backs. Walmart is a growth story that will be written about in the next 5 years.
• Best Buy (BBY) beat their earnings report but gave a poor outlook and disappointing online sales. It fell from 79 to finish the week at 68. I think it was over sold and would expect a nice bounce next week to 75.
• L Brands (LB) also beat on their earnings report and it sold off in the after hours due to dialing back earning expectation, but they still expect to earn around 10% for the year. I picked up 100 shares in the after hour session for 32.06 and it opened there on Thursday then took off to over 35. The dividend is strong and it will stay in the portfolio and will sell call options after it settles.
• I used L Brands to replace Roku (ROKU) in the portfolio because the Roku didn't have much movement and doesn't have a dividend. So I sold a 35 strike price call against it when it was at 34 on Wednesday. It was announced on Thursday a huge short seller is now long in Roku so it blew threw almost to 39 by the end of the week. 

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.

Thursday Pre-Market Doings

• I am a little disappointed not to see anything about Spotify earnings from yesterday afternoon. Amazon produced an amazing report in a letter to shareholders that says they have 100 million Prime subscribers worldwide. Their price is poised to continue to climb and it will probably pass it's all time high within a week that was just established before Trump started his Tweets about them.
• Boeing, Lockheed Martin, and Raytheon are back in trading ranges they bounced from a few times in February. They all look poised to go higher. Every time I saw Boeing hit 337 it would shoot up 8 dollars. Yesterday it was close to 342 and today it will open just under 440. If it hits 437 I will buy a call option with a strike price of 440 today.
• In my longer term stock portfolio I have decided last weekend that I wanted to mix it up a little. This portfolio primarily contains larger name brand companies with solid track records like Apple, Microsoft, Haliburton, Merk, Best Buy, Ford, Verizon and Home Depot. I trimmed from it to free up cash to buy weed... stocks. CNBC Fast Money Wednesday afternoon had a great segment on cannabis companies. I was disappointed that it did not appear that any were currently profitable. Aurora Cannabis (ACBFF) appeared to have great stuff growing on with it and the stock price is low enough that a hundred shares it a drop in the pipe.
• The cannabis story reminds me of when I was getting solar panels. There are many companies in the solar panel industry including over priced Tesla. Most companies like Tesla do not make a profit. The company that we went with does and am surprised that Sunrun (RUN) stock price is still as low as it is. It was pushed down in the 4th quarter of 2017 but has risen sharply before their last earnings report. Due to Sunrun low PE ratio, I believe it is a buy for quite some time.
• Since we are discussing buying for long term, ROKU is trading near where they came public 6 months ago and is a screaming buy right now. Fast Money mentioned someone buying up June Call Options with a strike price of 37.50. That is a great buy for someone looking to sit and wait for their next earnings report.
• I don't expect to write something twice a day. But I was excited about this information that I was moving on and wanted to share it with you.