Target, Walmart or Amazon?

Watching one of my favorite shows this afternoon on CNBC, they played a game, Would you Rather with Target, Walmart or Amazon. I found their discussion interesting as many of them picked Amazon, or Target over Walmart. Since they didn't ask me, I thought I would write my 2 cents.

I feel there is one winner as the other 2 are trying to catch up. The analyst on the show stated that Amazon will try to squeeze profits from Walmart and Target. I don't think they account for the high over head cost Amazon has between delivery, warehouses and employees to run those locations. Amazon clearly doesn't have the overhead of running a retail location, but that is nominal when you consider a couple other factors that retail locations allow.

Retail locations allow people to feel, touch and try. You can't get that experience online. Retail locations also have the ability to take cash and food stamps that you can not do on Amazon's website. When people use other forms of payments including food stamps, many times they buy other things in addition to food. This ultimately leads to the realization that Amazon does not cater to low income families with make up a large percentage of households in the United States.

Amazon might be a better play if you consider their business web services and video services. However, Amazon has increased the price of their Prime membership to increase profits while shrinking delivery times by a day. While Amazon collects a monthly fee for their services, Walmart provides the same delivery service with no membership.

Each company has spent money in the past couple of years to improve. Amazon bought Whole Foods for a retail food presence that also expands their Prime Membership reach for great synergy as Whole Foods caters to a more affluent customer. Target spent money to improve their stores in the past year, but I didn't really see a difference. Walmart on the other hand spent money to acquire Flipkart which is the leading online retailer in India, the 2nd largest country by population in the world. So each company has spent money to expand their businesses rather than wasting on share buybacks.

From the investments the companies made, I believe Walmart's purchase of Flipcart was the most aggressive that will benefit them the most in the long run. Walmart already has a great online presence so adding Flipkart jumped them in front of Amazon in India. Flipkart's synergy is great as Walmart's website is a marketplace where a variety of sellers also sell products like Amazon.

In addition, Walmart also has it's own brand of products they sell for a higher profit margin to comparable name brands on the shelf. And Walmart even sells low cost value based items in that are similar to what you could get at a Family Dollar, Dollar Tree or Five Below. I do realize that Target does similar things to Walmart, but ultimately Target appears to be a different version of K-Mart which eventually disappeared.

To avoid the fate of K-Mart, Target needs to improve their online presence to the point someone wants to use their app to search for things first like Amazon and Walmart. Target must create a marketplace for other sellers so their may profit from seller fees. Target must also improve their value based presence. To me, there are too many things that Walmart already does well that Target isn't in the same league as Amazon and Walmart

All factors considered, I believe Walmart is the best bargain for your investment dollars of the 3 with Amazon in a close 2nd due to their server business. Amazon could get in front of Walmart if they were to take advantage of a major retailer going out of business like Sears or JC Penny's who have locations and their own brands.

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.

Amazon, Alphabet and Intel... Oh my!!!

Tesla reported a blow out quarter and I believe it should be trading closer to $420/share now, but we



have too much Geo-Political risk the market is dealing with as they have proven relevant on earnings calls whether it is stated or not. Amazon also reported its best quarter ever Thursday night and went down 10% due to a miss on the revenue. Alphabet reported earnings that were near Apple's last quarter's numbers, but also missed on revenue versus expectations. I think it is crazy to think that these companies should be punished due to a miss that doesn't really account for much since they are still growing and increasing their earnings per share.

Intel had a great earnings report which was expected since AMD did not. I don't know if it matters as we are facing increasing interest rates along with higher import cost due to tariffs. We are also on the edge of a mid term election where Democrats are expected to play a bigger role in the House of Representatives. If that happens, expect more time wasted as they will try to reverse the tax cuts instead of working on new things. The tax cut won't be reversed because President of Trump would not sign off on it and the Senate won't vote for a change either. What it does mean is bigger tax refunds for most families in the United States which will spur more vehicle and technology purchases. I believe Ford and Tesla are prime to explode to the upside for 2019.

Until then I think we may experience a little more downside before the market regains its feet and takes off to the upside. It feels similar to earlier in the year however the decline that started in late January was started by Amazon and Alphabet missing earnings. As they started moving up, we got the tariff news and moved everything back down. I think we are near the bottom of the market as the whole picture changes once the tariffs disappear regardless if the Federal Reserve slows down with the rate hikes or not.

Next week we will hear from Apple, Facebook and all of the other important companies that didn't report this week. I would expect to see everything to move up next week and even faster for the remainder of the year.

Turmoil to Profit in the Market... and Tesla

Everything opened lower this morning with the exception to Verizon and McDonald's who reported their third quarter earnings and were awesome. The huge drop was a carry over from the down Asian and European Markets. From open, everything went up for the first 20 minutes before retesting the downside. Most stocks dipped slightly lower than where they opened, but once they hit that retest point, everything went up.

You certainly could have profited by buying anything except Catepiller and profited today, but you would have been best to wait for that retest of the bottom. Buying Call Options on Apple and Netflix were very good to profit especially if you held them until the end of the day. Alphabet (GOOGL) and Amazon had great movement, but because they report earnings on Thursday, their options are too expensive to mess with.

Tesla options got very expensive from open because the company has elected to move up their earnings report to Wednesday which is a week earlier than scheduled and 2 weeks before normal. Obviously they must have good news to move up the earnings report like this as we expect them to produce the company's first profitable quarter in a long time. There was news today that notable short sellers have gone long on Tesla stating their new Model 3 is going to put them over the top.

I am very disappointed because I had 2 weekly Call Options with a 260 strike price that I closed out yesterday afternoon. Those 2 options would have been worth 3700 each by the end of Tuesday. If Tesla produces a huge profit, I would expect the company to trade up to 420 by the end of the week.

Something interesting happened today when Verizon reported earnings. Most stocks that move up before earnings announcement typically sell off the next day even when they beat their earnings report. Verizon has been steadily going up for the past month. After the earnings announcement, not only did the stock move up, but it continued going higher after the market opened. That has not happened since July of 2017. Since the 2nd quarter earnings announcement of 2017, every report has beat expectations but the stock reversed it's premarket gains to actually trade lower.

Apple was the first company to have this kind of positive stock movement after beating their numbers on the second quarter of 2018. McDonald's today had similar movement. This is completely different from Netflix which traded down every day since their earnings announcement until today. This trend appears to be reversing with bell weather companies like Apple, Verizon and McDonld's. On Wednesday before the market opens we will get Boeing and AT&T earnings. Boeing will be is expected to be awesome and AT&T won't. I would expect the market to be mixed on Wednesday with some late day upward movement.

Upward movement is expected when Amazon and Alphabet report earnings this week. Both companies are around 200 points off their all time high that was established 3 months ago. What will be interesting is if they move up after earnings, open the following day higher and if they can keep those gains and move higher to get closer to their all time highs. FANG companies tend to sell off after reaching a huge increase. They were making new highs the past couple of quarters post earnings, so this feels different. 

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. 

Netflix and Chilled, Interest Rates and Market Correction

Netflix reported a blow out 3rd quarter Tuesday afternoon. The stock rose as high as $400 before

settling around $385 and then opened Wednesday morning at $380. From there it went down along with FANG. Facebook, Amazon, and Alphabet found a bottom earlier than Netflix. Netflix found it's bottom around 355 before moving up for the afternoon. I like to see if that number will hold, but so far on Thursday is barely hanging on. Alphabet bottomed at 1115 which should be a key point to pay attention to on Thursday.

Today Alphabet opened higher at 1130 and went straight down to 1114 before bouncing up and then retesting that level at which I bought Call Options and it didn't hold as it went down to 1110. Much of the downward movement in stocks is due to the Federal Reserve minutes noting they still expect to raise interest rates 3 more times next year in addition to again in December. Rising interest rates is what Trump expects will kill the economy and he is right.

Higher interest rates cost all businesses more. Businesses finance expansion with the issuance of debt and small businesses may use debt to help with daily cash flow. Start up businesses may utilize debt to help establish themselves. Consumers use loans to purchase vehicles, homes and luxury items. If the businesses are being squeezed and the consumers have less desire to purchase higher end items, everyone loses, not just the housing sector.

The housing sector has extra constrains between higher material cost along with higher rates consumers have to pay for the mortgage loans. I believe the ultimate problem is the housing sector got fat and greedy from low interest rates for so long. Because interest rates were so low, people wanted larger houses that are larger than what they actually need. Where are they building homes for the average family? It isn't in Orlando, Florida.

Moving forward, Americans are going to have some of the largest tax refunds at the beginning of 2019. Housing may benefit some but with higher interest rates, not as much that will make a difference for the long term. People buy cars when they get big tax refunds regardless of the interest rates so I think Ford is positioning themselves to be the best along with Tesla. I think with Ford and Tesla at their 52 week lows they are a value and a growth buy for 2019 and investors will be happy by August of 2019.

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.

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. 

Amazon and Apple Go Higher and then...

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

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

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. 

Profiting From Options in Boeing, Apple, Alphabet and Tesla

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

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

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

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

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

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

Profit From a Mostly Positive Day in the Market

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

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

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

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

Apple Great, Tariffs... Good?

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

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

 


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

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

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