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. 

Everything Good but Banks Today

• Today the big banks reported earnings before the market opened. Wells Fargo disappointed  Citigroup was lame and JP Morgan was held back by the others despite producing great numbers. Retail stocks were up lead by Home Depot and Best Buy. Boeing shot up, came down to where it started and ran up for the rest of the day. 
  
• The FANG stocks were good with the exception to Netflix like yesterday. Amazon and Alphabet (GOOGL) opened above their all time high that was set yesterday. Amazon was consistent going up for most of the day while Alphabet went down initially and made a turn at 10am to shoot higher. It took another turn about mid day that would cause it to go negative but turn around at 1200 and finished the day positive. There were some nice trades that you could have profited from if you followed the technical indicators as shown on the chart below.
  
• Amazon Prime Day is next week and I would expect to see Amazon and Alphabet go higher on Monday and Tuesday with a possible turn around on Wednesday afternoon. I think Netflix will reverse higher as it seems to do every time someone has something negative to say about them. 

Positive Ending to the First Half of 2018

• Yesterday after the market close the Fed Stress Test results came in favorably for almost all banks. Thankfully when the banks are up, Amazon and Google go up too and I trade Alphabet (GOOGL) options primarily.
• Alphabet was poised to open $6 higher than yesterday's close. So I watched it go up and then come down in the first 10 minutes which showed me that it was going up to start the day so I jumped in buying 5 Call options with 1137.50 strike price. It quickly ran up to 1141 where it stalled. I was quick on the trigger after missing on $500 yesterday and sold for a max profit. See illustrations below:
  
• From selling my Call options at the top, Alphabet slipped down and came back, but didn't make a new high. That is where I bought a Put option. Unfortunately I sold it too soon as I made another $125, where if I had more conviction I would have held it a bit longer for a $400 profit.
• There is no guarantee with anything. I just try to make money based on momentum opportunities I see in the market with specific stocks. The option prices in Friday are the lowest due to the limited time they are good, but the opportunity to make a profit diminishes without momentum that is carried through the day. 
• Learning Lesson:  Never submit a Sell to Close at Market Price before the market opens at 9:30am. I bought back an out of the money call option on Best Buy with a strike price of 77 with the expectation that I could close the position out for under $10 because it closed on Wednesday for .06. When I looked at the transaction details I bought it back for $41 yesterday at market open. Best Buy ended the week below $75 and this option would have expired today worthless which would have saved me $41. I bought it back yesterday because Best Buy is a retail stock that moves with FANG many times and FANG was so low Wednesday that it was going up on Thursday. I expected Best Buy might have the possibility of going above 77 by the end of the week and I didn't want to chance it if I could close the position for under $10. MY BAD!

Dow Drops Again to Start the Week

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

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

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

Tech and Media Up, Retail and Banks Down

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

Tues/Wednesday Market Gains... BOOM TESLA!

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

Investing in the Ups and Downs This Week

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

Apple Rally While Other Bore

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

IBM Pain, Market News

• IBM opened down and leveled off 4 more points down after a disappointing earnings report yesterday afternoon despite beating estimates from what I have read. Funny think is that while IBM is down, Microsoft (MSFT) and Intel (INTC) were up to the point Microsoft is within half a dollar of its all time high and Intel made a new all time high today. 
• Spotify is expected to report earnings after close today and I expect it to be positive since they just went public with their stock a couple of weeks ago. This should drive Netflix in the same direction tomorrow. So if it is good, Netflix will hit a new high tomorrow. If it is not, expect a day like today. Spotify was up during today's trading which has shown to be a set up to drop after earnings are announced after the market close.
• Netflix and Google came down but traded within a predictable range all day. GOOGL opened at 1079, down to 1072, up to 1077, down to 1070, up to 1079, down to 1072, up to 1080, down to 1073, up to 1080, down to float around 1076 near close. I like this trading range from a day trading prospective as you have a clear defined trading range that it didn't break out of. This was held down because of the large run up yesterday and cautious reaction to IBM's call.
• Home Depot went straight up to 180 as they reports an increased technology presence very soon.
• Best Buy (BBY) and Amazon moved sharply up today on news that they will enter a partnership for selling televisions. This is very positive as Best Buy has matched Amazon on pricing for a couple of years which has given Best Buy a leg up with their ability to demonstrate features and have a great return policy. ROKU traded down on this news which makes no sense to me as ROKU devices are sold in Best Buy as well as integrated in many televisions sold today. I see this as being positive and possibly presents an opportunity to ROKU to incorporate Alexa into their devices with their own partnership with Amazon.
• JP Morgan and the banks were up quickly and dropped drastically after the first half an hour. Sharply is a dollar! The earnings reports from the banks have given temporary gains only being taken back and dropping lower although the percentage changes are not that substantial and I think you are wasting money if you are buying options to make money. American Express reported after market close today beating estimates, having a spike up and I would expect a drop in the first half hour of the market open tomorrow. That would be a great time to buy some PUT options on American Express at 9:45am on Thursday.