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.

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.

Day Trading After President's Day

The market was poised to go up on Tuesday and it ran up for a quick pop before settling down. I charted Alphabet (GOOGL) as I waited for it to come down to 1116 when I bought 2 1135 calls at 4.6 each. They ran up to 7.2 before falling for the next couple of hours. Once again, I should have sold there, but didn't.

Alphabet went higher in the afternoon, but those call options were never worth as much as that early morning. Take a look at my chart below:

I turned off the trailing stop and sold at 5.27 because I felt the indicators were pointing to a reversal. It did reverse after going higher. I would have benefited by using a trailing stop order. I grade myself an A on entry point, C- on not utilizing a trailing stop and ending my trade earlier.

On Wednesday I took a different stance. When Alphabet moved up to 1129, I bought a couple 1120 Put options with a cost just below 5. It did move down and bounced off of 1125 where those Put options were worth 5.5. Then Alphabet moved higher, but never past 1131 and suddenly moved sharply lower right after I texted a friend saying I expected some downward movement this afternoon after 2pm. 

On that downward movement, my sell order triggered as I placed a trailing stop order to sell to close once the price hit 5.5 and the trail buffer was .5. It triggered so quickly and I missed out on almost 500 because it flew down to 1122 before bouncing up. At that bottom point it would have been worth 7.9. If I placed a larger buffer on the trailing stop of say 1.0, I probably would have received 7 or more.  I wish I turned off the sell order to wait fore post Fed announcement reaction.

After the Fed Minutes were announced at 2pm, Alphabet went down sharply to 1112 at which point those Put Options were worth over 12. This created 2 learning lessons:

1. Place a larger trailing buffer to avoid too early of a close on profits when trading Alphabet. Better than placing a larger buffer would have been placing the trailing stop to trigger when Alphabet trades below 1118 or 1119. That would have captured the goal as it was where I say Alphabet trading down to.
2. Be more patient and wait for a better entry point. I thought I was being patient, but I paid 300 too much for the options. I could have been up over 1000 by buying one additional Put Options.

Take a look at my chart below.

I grade myself a C on entry point, and a C on exit. Exiting for a profit is the goal, but I should have targeted the trading price of the stock to get to 1118 before entering a trailing stop and probably would have received closer to 1200 per contract.

Profitable Options Trades on Friday

Friday marked the end of a long week of earnings. This also marked a year anniversary of when negative fluctuation began. We received the same news as last year from the FAANG companies of Apple, Amazon, and Google (Alphabet) where they produced strong earnings, but mentioned higher cost. This year it is different as we have a Federal Reserve that appears to be easing, trade war is simmering and stocks were far over sold in the last quarter of 2018.

Moving into 2019, companies started quickly providing earnings warnings. Apple was the first to do it on the first day of trading on January 2nd. They went down hard and shot up after that. Apple was the only one to actually drop after the warning. Skyworks went up after the warning and up further after annoucing lower than expected earnings. That doesn't make sense to me.

What also doesn't make sense in how Alphabet goes down either the day after announcing earnings and again for the rest of the week. Alphabet did report earnings on Monday, went down some on Tuesday despite falling hard on Wednesday and Thursday. I did see it bottom early on Friday and bought a call option expiring the following Friday. Check out my chart to the right.

Expedia was a big mover after reporting earnings on Thursday after the close. I saw it run up near it's
52 week high and when the market opened on Friday it came straight down. I noticed that it bottomed just above 129 by 9:45am to I bought a couple 132 calls for next week. I failed to sell them at the peak as I was greedy and expecting it to go higher. I would have been up 260 if I sold them when they were worth 4 a calls. I have that chart to the right also.

The third trade I took part in on Friday was Boeing calls. I bought next weeks 405 strike calls near open. I should have sold when it peaked quickly to take a quick profit because that is typically what Boeing does on a Friday. Or I could have bought a Put near the quick morning peak and sold it for a profit when it bottomed around 11:30am. That time would have been the best time to buy call options on Boeing as it went
straight up from there. I sold my calls earlier than I noted on this chart because I sold them at 1pm and did not expect it to go higher from there. If I held until close, I would have made the same profit as if I sold in the first 10 minutes of the day.

That brings a huge reminder to take your profits early and do something else for the rest of the day. The stock of your choice must go higher than previous morning high for your option less than 2 weeks out not to depreciate due to time decay.

/As usual, I hope this helps someone. I am still trying to refine my skills and be profitable in larger amounts every day. My main issue is buying too early and not waiting for a confirmation on the proper entry point. I did it on Alphabet and Expedia on Friday, but failed to do it correctly on Boeing which made taking the largest profit not possible since I got burned earlier when the MACD and the Stochastic Indicators peaked and I didn't sell.

IMPORTANT LESSON: Many times you can profit in less than an hour. You will not make more by holding longer. This is not a job and you do not make more watching it go down. You actually lose and will lose twice as much as you could have gained if you don't get out at the right time. Take your profit and run!

Trading After Amazon Earnings

On Thursday, after the market close Amazon reported their fourth quarter earnings. They beat their earnings expectation, but due to increase expenses as stated on the conference call, and drove the price down largely. It attempted to make her early recovering, but just think further and further.

Like last year, when Amazon and Google disappointed on their earnings, the whole market came down. It is extremely important to make sure that you get out of your trade in a timely fashion. When you get too greedy, you end up losing more than you gained.

I got out of my puts on Alphabet missing the right time and
costing me $600 on Thursday. I didn't make the same mistake today which was very important because it was the day of expiration. I did make money on alphabet 1130 calls, but lost a little too much on a 1135 call that I didn't sell promptly.

Alphabet's normal trading on Fridays consist of going up sharply, retracing down near the low the day, going back up and falling short of where it peaked earlier, and going down for most of the rest of the day. Very good money can be made with puts and decent money can be made with calls on Fridays as long as your problems with your execution and don't fall in love with your holdings.

From my chart above you can see where I recommend positions. This is the typical movement of Alphabet on a Friday, but the past 3 out of 4 weeks it has not moved in the typical pattern.

Then there was Tesla. After reporting fourth quarter earnings on Wednesday afternoon, we didn't get a big movement in either direction. I believe it would have fallen further if Tesla reported a loss in the 4th quarter of 2018. Since Tesla reported a slightly lower than expected profit and already came down so sharply in the prior week, it should back up to trade above 330 next week. I bought 2 315 February 8 calls on Tesla within the first few minutes of Fridays open.

I don't like holding options over night because you don't know what will happen by the next day let alone after a weekend. Typically you can buy the same calls on Monday unless Tesla opens considerably higher. Hopefully I can benefit from Tesla running up to 330 early Monday morning and I can sell then.

On Thursday morning, when I saw that Tesla was not going down, I decided to sell a covered 3/1/19 Put with a 280 strike price for $800. I picked that strike price because it bounced off 280 at the bottom of the most recent drop before the earnings release. Therefore I expect it to go up and this option expire worthless on March 1st, but if it does go down by then even in a larger market decline the level of 280 should hold for Tesla. I found this strategy makes more sense than being subject to risk of holding on the stock.

I got fed up with UGAZ and it's strange movement that don't make sense. I did find that Antero Resources Corporation (AR) does make sense as it is a company in the Natural Gas field with positive earnings and does have options available on it. AR his a 5 year low on Thursday below 10 and it bounced when UGAZ didn't. UGAZ went down further on Friday, but AR went up. When AR was at 10.21 on Friday, I sold 5 3/15/19 10 strike Puts. I might decided to buy this stock also, but at this point I feel I can make a high probability profit even if it doesn't go much higher by expiration.

I had been following someone on YouTube recently who discusses options trades, but I have found him making some dumb errors that didn't make sense. I am not saying that I am an expert, but to sell an out of the money naked call option 5 months out on Boeing the day before earnings has to be the dumbest move I have ever seen. There is a possibility that it goes down and he might be able to buy it back slightly over what he received on it. There is a probability that Boeing blows through that 400 strike price before the next earnings call, especially if there is a trade deal done, but definitely by their next earnings report.

This year is starting to look like last year in terms of the market movement, but this year is quite different. Last year the market had a large amount of volatility due to over inflated market after the next tax bill was passed, companies wrote off more expenses in the fourth quarter of 2017 to take advantage of the higher tax break, emerging markets were declining, new Fed Chairman Powell starting moving interest rates too quickly and trade tariffs were affecting everyone when nobody was expecting them at all.

This year is different because the Fed chairman has learned how to talk without disrupting the stock market, we might be getting closer to a trade agreement, and consumers are about to experience some of the largest tax refunds ever. Amazon's warning of higher expenses might have spooked investors Thursday and Friday, but it is the same thing that Google did last year when everything reversed course. It was pointed out on CNBC's Options Action on Friday that Alphabet appears to be in a head and shoulders pattern, but you could say that about so many companies that I broken out after hitting a 52 week low and bounced to move sharply up. Typically these 52 week lows have been 50% of their all time highs. Alphabet is the one FANG member with probably the highest diversity along with the lowest growth movement. I don't see Alphabet moving more than 100 points lower, but I also don't see that coming until it have moved 300 points higher.

Tail of 2 Days

Please check out my YouTube channel for my audio description of the market this week.  

After the market close on Tuesday, Apple announced a lower revision of

their earnings expectation for the first quarter of 2019. This is crazy since we are about to enter earnings season for fourth quarter of 2018. Regardless it drove the market down hard on Thursday with the exception of Netflix and Verizon.

Apple cited reduced sales in China and the trade war having an impact. I was surprised that Amazon and Alphabet (GOOGL) weren't down more. Amazon just broke below 1500 and Alphabet didn't go below 1022. I felt this was a strong sign.

China's market went up on Friday with the expectation of trade talks sooner than later. It drove the US markets up from open and they rallied more after Fed President Powell spoke with Janet Yellin and Ben Bernanke. The market heard positive news that they are reading the market and inflation is not rising. They don't believe that rates will increase more, but they are all wrong.

Inflation is muted because of the huge drop in oil, gasoline and other commodities. As they rise, they will show in I is real as well as s full employment will drive up the price of goods. The Fed will raise rates as planned 2 to 3 times this year.

With more rate increases, the market will experience more volatility. The

best case for a sustainable rally in the market is from great earnings, larger sales and a trade deal with China. Sales will work themselves out as Americans will experience the largest tax reduction and spend that money.

Trading: Thursday was such a negative day that you could have bought Puts at open or waited for everything to come back near the open price to buy Put Options. Selling at the end of the day was best.

Friday proved to be completely opposite of Thursday and Call Options were the best. I traded QQQ on Thursday and Home Depot on Friday.

End of a Crazy Christmas Week Trading

After yesterday's large market run, everything was poised to open lower today like yesterday. After the morning spike up, downward movement was coming. It was obvious that the movement was very muted today unlike past Friday's when Alphabet (GOOGL) would give up 20 to 30 points in one morning.

I decided that today I would trade options on the QQQ ETF instead of on Alphabet. I find that Alphabet's options are very expensive as are all of the FANG stocks, but this ETF moves with FANG and doesn't appear to have the premium pricing. I was very profitable with my initial trade. Unfortunately I tried to jump in on the other side too quickly without clear signals and gave back half of my profit. I also didn't have anything left for latter in the day when there was the largest movement from 3 to 4pm.

Below I have the charts for Alphabet (GOOGL), QQQ and TQQQ so you can see the similarities. I also made a quick video trading lesson on my YouTube channel.

Christmas Eve Market Movement

Everything moved together on Monday, Christmas Eve. If you follow my blog, you know I like trading Alphabet (GOOGL). On Monday, Alphabet opened near the Friday low and moved up. It got up to 992 then came back to 982 which was the buying point of Call Options. It appeared to pause at 1000 before shooting up to 1010 (sell calls and/or buy Puts) and then came down from there. From there it retested the upside at 1004 and fell for the rest of the day. The last few minutes of the shortened trading day it fell hard near the opening price. Many other stocks fell lower like Home Depot.

Check out my commentary video below

Trading Alphabet This Week

With the Federal Reserve scheduled to raise interest rates on Wednesday, this was going to be an interesting week for stocks. Everything is been very depressed and poised to go up. Alphabet moved up on Monday but failed to pass 1060. This proved to be a substantial area to keep in mind trade in for the rest of the week. I actually did not trade alphabet on Monday, but utilizing what she realized from Monday can help set up your trades for the rest of the week. The market has been up and down and pretty much flat by the end of the day for the past week and a half. Alphabet has followed the market movement.

On Tuesday, Alphabet ended up going up cautiously, but failed again to pass 1060. It went straight down from there. There's big money to be made if you can be patient for it. What was really interesting is how it bounced off of 1040 a couple of times on his way up to 1060. Once it got to 1060, it failed to go higher and went straight down slightly passed 1040. This is the optimal opportunity was to buy puts when it was at 1060 and sell them when it hit 1040.

Wednesday was unlike other days where the Federal reserve announced their interest rates as everything went straight up. Alphabet actually went up and hit 1075 where it failed like the prior

couple of days at 1060. it appears that most of the market was expecting that the Federal reserve would not raise interest rates war have favorable communication regarding a stop to raising interest rates. At 2pm when the rate was announced, everything went straight down and then it went up as Fed Chairman Powell began to speak. At that time he announced that they will be more data dependent and will probably have two more rate hikes in 2019. That is when the market fell further. But as you can see the chart of Alphabet, it bounced off 1019 and went all the way back up to 1040. This look very similar to last Thursday.

On Wednesday afternoon, Alphabet went back down to retest that bottom and stopped at 10:24 where it went back up to 1040. The stalking to the day slightly lower, but looks poised to rebound on Thursday and go higher. I believe when the analyst breakdown the words from the Federal Reserve, the market will have a nice balance from being over sold on Wednesday. That's not to say that it is going to continue going up all day. I would expect the second half of Thursday and most of Friday for the market to be down.

Trading Alphabet

This past week was like other weeks with the movement of the market and specifically with Alphabet (GOOGL). Tuesday it opened higher and went down just to finish the day near where it started.

Wednesday looked like it was going to be a similar day at start. Sometimes the prior days movement continues into the next day. Wednesday's open was higher, it moved up, retested the open low and shot up higher. From what I have seen is it move up to a 3rd top before changing direction. It was clear that it would not get past 1092. From that point you should exit all Call options and switch to Put options. Take a look at the chart below and I will continue with Thursday which is on the same chart.

Thursday was interesting because Alphabet moved up, but failed to get past 1090 which is where it peaked on Wednesday. That is a sign to buy a Put option and sell near it's bottom when it was at 1050.

Friday Alphabet went up after testing the open and moved up until it

came close to Thursday's close at 1071. It was nearly free fall for the rest of the day. See the chart to the side.

I started writing this on Monday. I will break down this week's charts next.

Separation of FANG

Netflix had a great earnings report Tuesday afternoon and it shot up after the Bell on Tuesday and went straight down after that. It opened Wednesday morning at $380, dipped down to 356 before finishing around 365. It went further down on Thursday and even further on Friday as Disney hit a new 52 week high that is near it's all time high based on belief that Disney will take market share from Netflix moving forward. Alphabet and Amazon traded down but for the most part Alphabet and Facebook finished the week flat while Netflix and Amazon experienced more negative effects due to their high valuation.

Trading Alphabet (GOOGL) options were interesting on Friday as it looked very similar to the prior Friday. Alphabet opened up and went up to 1121 by 10:05am before going down to 1098. It went back up to 1110 and back down to 1097 before finishing the day at 1105. It didn't have the big late day run like last Friday and is why I say that you can't trade expecting a huge Friday afternoon movement or you will get burned more times than not.

Options will be very expensive for Amazon and Alphabet because they report earnings after the bell on Thursday. Like Netflix  their earnings should be great and they will go up huge and sell off the whole day on Friday.

I did take advantage of the sold off Friday position of Tesla to buy a 360 Call for next week when it was at 354. I hope to get a nice move up on Monday or I will be selling quickly.

On Tuesday Verizon will report third quarter earnings before the market opens and as usual it will be great and benefit from not having any tariff exposure or declining media business because they are not trying to be in a low profit market like AT&T which reports Wednesday. It would be nice if AT&T has something good to report. Either way Verizon should be up more which is never the case as AT&T drags Verizon down with it. I would like to see Verizon and AT&T to act like PayPal and Ebay as PayPal had great earnings report and Ebay went in the opposite direction on PayPal highs.

Boeing reports earnings Wednesday morning and they should be excellent as long as they don't have anything to say about tariffs. As with almost every company that has reported earnings, I find that if they have great earnings and go up big, they will sell off that next trading session. If the market does not like the earnings, the shares will go further down in the next couple of market sessions. Either way it appears best to buy Put options in the first couple of minutes after the market opens after earnings are reported. Based on that stance it sounds like we are in a bear market. I don't believe that is the case as positive market movement is based on less than 30 days in a year. That is what history says  but the down days extend into multiple sessions while positive movement occurs in a day and doesn't appear to move as much as the sum of the down days. 

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. 

Upward Moving Market

Tesla appeared to have bottomed last week after their newly hired accountant left and Apple appeared to have a short term bottom last Thursday as it did not go below 217. This presented a huge opportunity to capitalize on this movement back up. I don't believe that Apple will react positively to the new iPhone announcement on Wednesday, but you could have made some nice profits from Thursday to Tuesday with Call Options. Apple could go higher and pass it's all time high recently established, but think it will be resistance first.

I took advantage of Boeing opening on Tuesday below 340 as it went to 337 and bounced off of it. Boeing moved up to 346 which made for nice profits in one day on Call Options.

Alphabet (GOOGL) opened lower Tuesday and dropped to 1166 where it bounced off and moved up to 1188 very quickly in the first hour of trading. Alphabet moved down while Amazon continued moving up. Alphabet bounced off 1180 to go higher and touched 1190. Those were 2 nice movements that could be profitable as this is what I call an up week for technology stocks as last week was down. 

Tesla Bottom

I failed to mention movement in Tesla on Friday. It was announced that

Tesla's newly hired accountant resigned Friday morning which drove the stock down big and it went down to 252 shortly after the market opened Friday morning. It rebounded quick and it was a positive sign when it did not go lower than 260 after the upward movement. This was a sign that the bottom was formed and it should be positive next week. It opened higher on Monday, dipped down some before going higher by the end of the day. I would expect to see Tesla's stock to return to the 300 mark this week as it closed today at $285.50.

Home Depot and Roku ran up more today and everything else appeared down except for canapy stocks that regained more than what they lost on Friday. FANG all opened higher and dipped lower throughout the decade. Apple is 10 points off the high and came down below 218 as I expected  Of the big tech companies, Facebook appeared to be the only one to hold most of the gain today.

Boeing was down a good amount today  I believe that it was sold off a little too much and expect if it should make it below 338 it will shoot much higher.

Friday Tariff Flustered Market

The August jobs report came in a little softer than what the market was looking for as everything went down after it was released before the market opened. Most everything moved up during the day until around 1pm when Trump announced more tariffs on China. Everything immediately sank to the lows of the day and most rebounded from there with the exception of Apple. In the last half hour of trading it was announced that the tariffs will affect Apple more than expected which knocked 3 points off Apple. I expected Apple to move down before moving higher. I don't think it is done moving down as it should get below 218 before taking off to new highs next month.

Boeing was doing well this week until Friday when it went down after the jobs report. It bottomed for the day after the tariff announcement as it moved up from there. Verizon got a downgrade earlier this week that appears to be wrong as it dropped a point and made it up in a day. Verizon is a stock to hold and unfortunately not one to use with options unless it had sharp movement in one direction and expects to bounce.

EA was down and looked to have bottomed at 111 where it bounced. Today it moved sharply higher to 116 before giving back a point. Based on where it fell from based on a delay of a new game and the new games that have been released between Madden, NBA Live and this weekend's Overwatch turnament, EA should move up further by Monday and possibly for the rest of the week. I would expect it to hit somewhere between 118 and 122 by Tuesday if not Monday. I bought 115 Calls for September 14 when it was at 114 on Friday.

Facebook appears to have bounced off 160 and I would expect to see it move higher next week but may come back to retest that base if they have any negative news. I would expect positive news regarding Instagram advertising coming very soon and push Facebook above 180 in the next month. Twitter on the other hand may be close to a bottom and should bounce from this current level of $30/share, but unlike Facebook, Twitter doesn't have an additional platform to use as a wildcard like Facebook.

On to my day trade... Alphabet appeared to have bottomed yesterday as it didn't go past the bottom. It was a learning lesson as you don't expect it to reverse until you see a bottom has formed. You should never attempt to time the bottom as it will be obvious if it is to bounce. I mention this because Thursday I was early to buy a Call Option as I expected it to bounce higher, but should have waited and could have bought at a better price. I sold at a loss because it was going down further and did not have proof that it was reversing. If I did not sell that Call Option earlier, I could have sold it for a profit by the end of the day because it moved up above 1180 as that was the strike price that I bought when it was around 1173.

Now I will reference my 1 and 5 minute chart numbers with the following descriptions:

1. It might have been better that I did not make that kind of profit on that one Call
   
   Option on Alphabet on Thursday because I might have held it to be higher on Friday. Higher is where Alphabet moved after if opened below 1170. 
2. Based on how it appeared to be done moving down on Thursday, I waited for a sign that it was going up and bought 2 1175 Call Options when it was close to 1175. 
3. It appeared to stop moving up when it got to 1189 and I got out of my Calls as it moved down from there.
4. Based on the upward movement 2 weeks ago, it appeared that Alphabet dropped to 1183 where it closed on Thursday and would move much higher than the prior day high of 1189. I mentioned 2 weeks ago that this is dangerous to expect that to happen as it doesn't happen like that too often especially on Fridays. I lost a little of my gains on attempting to relive 2 weeks ago miss. As a learning lesson, there is not enough movement downward to expect upward movement unless the stochastic indicated that it bottomed with little price movement downward. I sold that call for a loss when I saw it move further downward below 1181. 
5. From the tariff news, Alphabet moved down 10 points very quickly and
   
   appeared to want to bounce off that which it did. Based on my belief that it is going to move up for the next week since the bottom was formed on Thursday, I thought this might be a great opportunity for a bounce. Unfortunately option prices are priced higher on movement upward than when it settles even if higher on the last day of the option contract. 
6. It did move back to 1181 which is 10 points off that tariff low. Once again, I bought a little late or early and sold early as I did not trust it to move up higher. 

Next week I would expect to see Alphabet to move higher and probably back to 1260, but don't know that I would care to hold any options over night next week as more tariff news or regulation movement from Washington could push tech to open lower before moving higher. 

Tech Hit Hard While Dow Jones Moved Up

Micron led chip stocks lower as Amazon, Facebook and Alphabet went lower also. They dropped lower than yesterday, but appeared to have bounced off the bottom and I would expect a strong move up by next week. Home Depot and Boeing moved up as they seem to catch all of the money that was leaving tech. In the afternoon it appeared that money returned to tech as the big Dow Jones stocks sold off a little in the afternoon.

There were some big moves down that I expect to see a reversal in the next week.

• Alphabet (GOOGL) was 1269 last Thursday and today's low was 1263
• Amazon was 2050 2 days ago and hit 1945 today.
• Apple was at almost at 230 and was under 223 today.
• Facebook was 177 last Thursday and today 160.
• Micron was over 51 last Thursday and today was 44.

Micron appears to be the lowest cost of all of them with a Price to Earnings ratio under 5. Apple has proved to have a strong following since Warren Buffet investing in them so I don't know that it will drop further. These could go lower with more tariff talk over the next few days, but lately we have seen moves up despite tariff talks. If there were going to be a drop due to tariffs I don't believe that we would see as much upward movement in Boeing and Home Depot.

Alphabet is what I like to trade options due to the great movement. I found today's chart was similar to yesterday's, but looked to be the opposite from last Thursday. It appears to be a sign that tech is reversing as Netflix got an upgrade before the market opened. Nonetheless GOOGL moved sharply down from open and bounced off 1163, then moved up and quickly dropped to 1165 where it gained footing and moved above 1183.

On Friday I would expect to see a small movement down followed by strong upward movement for Friday. It could move down on Monday ,but I would expect to see large upward movement on Tuesday if we don't get it on Monday.

Testifying Brings Down the Market

Facebook, Google and Twitter were set to testify in Washington today. They started dipping lower last Friday which continued yesterday and fell harder today. Google did not show because Congress wanted a CEO and not the representative that Google wanted to send. Google got bad flack from it and the parent company Alphabet sank hard. What was interesting is that Alphabet found a bottom and bounced off of it by 25 points. It was a great day to own some Put Options. See my chart below.

It was interesting that Alphabet moved higher, but Facebook, Amazon, Twitter and other tech companies did rebound a little but closed near the lows for the day. It was suggested that Alphabet could go lower on Thursday due to their vacancy at the capital. Based on what I see, they might have a small dip on Thursday but I would expect to see everything to go up for the rest of the week and the first part of next week also. 

September Trading Down

Markets were closed in the United States for Labor Day on Monday. On Tuesday Amazon opened to another new high with news on entering the India market to compete with Flipkart. Amazon became the 2nd company to one trillion dollars in market capitalization. Boeing bottomed early today at 339.50 and went up 7 from there. AMD was up over 10% today as excitement is moving towards AMD and away from Intel. I find this funny when Apple computers ,Chromebooks and Windows tablets use Intel processors.

Retail stocks moved up as predicted today with Best Buy moving back above 80 and Home Depot moved sharply up within 2 points of it's all time high established back in January. Apple moved up a little which was nice to see as Samsung announced that they will be releasing a foldable phone this year. In the past Apple would drop on any competition news. Apple has shown a negative impact from iPhone announcements and that day is coming soon.

Alphabet (GOOGL) continued to sell off on Tuesday as it opened lower than Friday's close. In the first few minutes it went up from 1222 to 1228 and went down from there. Alphabet appeared to find a bottom at 1211 as it bounced off and moved up to 1221 before back peddling the rest of the day and found a new bottom at 1209.

Hindsight is 20/20 and I actually missed my exit point as it was found on the 1 minute chart which I had on my screen next to the 5 minute chart. As I indicated in my 1 minute chart and in past blogs that you should look for movements of approximately 10 points when trading Alphabet. Tomorrow is a new day with Facebook and Twitter testifying for Congress with Google being left out because Congress wanted a higher up instead of their qualified representative. I would expect to see some sort of positive news before the market opens for Alphabet where it will open 10 points higher and fall from there as the testifying begins.

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.