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.

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. 

FANG is Struggling but not Dead!

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

FANG Goes Bang and Boom

• President Trump news from NATO paying more to defense reduced trade issues and drove everything up. Amazon opened above it's all time high and ran further along with other FANG except Netflix which got a downgrade. Credit card companies ran along with defense stocks. Retail stocks were down for the most part.
• Facebook and Microsoft moved to new highs, but if you follow me you know I enjoy trading options on Alphabet (GOOGL) and it ran and ran today. The one minute chart indicated that it was going higher, but everything else indicated that FANG was over bought. I waited for a turn down and never got it  but I did take advantage of what upside was left since I got in so late. I was very leery and took profits and as soon as I saw it was going higher I bought back in. 
  
• I am expecting more upside on Friday  but will be ready to sell to take profit as soon as I see it turn down. When you have lost money waiting on it to continue in your direction you will take profits and buy back in. Don't fall in love with this style as this happens about once every other week. You just want to make sure you are on the right side. 

How to Turn a Down Day Positive

• With President Trump's tariff announcement yesterday afternoon sending most everything down today presented huge buying opportunities if you were ready to move at market open today. 
• Boeing had a huge day yesterday and gets affected big by tariff talk. Today it opened down $6 and shot up immediately to be short lived by 9:40am where it started its turn down. Ten minutes to make a profit is good, but turns ugly if you keep holding expecting it to come back up. Unfortunately I experienced the ugly going from a profit of $450 to a loss of $550 today.
  
• Alphabet (GOOGL) on the other hand gets sold off on trade news even though it doesn't have any direct business that would be affected. It was down from open and took off from there. I bought Calls when I saw it was going up and sold where I thought it peaked on the first 2 peak. I was not in on the 3rd peak that occurred at 10:30am, but did take advantage in the afternoon pop for a small gain over $100.
  
  
  
  
• LEARNING LESSON: When the Option you bought went up big came back to where you bought it, sell it ASAP before it goes down further  

Wednesday Market Recovery

• The Dow Jones opened higher, but ended up trading flat for most of the day. GE didn't help and Boeing was marginally better. The good news was the news that Germany is going to eliminate import tariffs on automobiles. This appears to be a good sign for the markets and I would expect that we will get more good news on Thursday that will spur the markets higher.
• I don't know that the Nasdaq has much room to go higher as Amazon, Netflix, Facebook and finally Alphabet (GOOGL) hit new highs on Wednesday in the noon hour. It was around the same time that President Trump was speaking about the illegal immigrants. Unfortunately the FANG stocks are so high that they may hit another peak in the morning before falling hard when there is a rotation out of them into the big industrial names like Boeing and Caterpillar. 
• Alphabet already started selling off after 1pm. Tesla continued its run higher throughout the day. It actually looked straight up from 2:30pm through 3pm.
• Home Depot went down, then up, then back down again. It appears to be bouncing off the 198 level and I believe it will do it's regular Thursday afternoon through Friday morning run up. I will look for a draw down a little further after a spike higher in the morning. That will be the Call option buying opportunity on Thursday to sell around 10am on Friday.

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.

Friday Market Up Again

• Once again there was news about Apple phone sales are slowing because suppliers have announced they are receiving less orders from Apple. I find this funny since we have an idea of where they are made (China), but Apple is secretive and uses multiple suppliers for so many parts. Because of the news Apple dropped 3 points at open and recovered some during the day.
• Home Depot and Boeing dropped at open with everything else including Alphabet. By 10:45AM everything changed direction and moved up. Home Depot has run up strongly this week from 190 to 197. I would expect to see it give back some Monday through Wednesday and have a very strong Thursday and Friday. Wednesday afternoon will probably be the best time to buy Call Options.
• Alphabet (GOOGL) got sold off by the end of the day and completed it's 4th day in a row of downward performance. So far this year, Alphabet would have one week where it changes direction from being down to moving up on Tuesday and have a big Wednesday through the end of the week. The opposite is true as it reverses direction from the upside on Tuesday as it did this past Tuesday and dropped from there. The movement from the prior week was from 1065 to 1162. Half of that would put it at 1013 as a floor to look for it to rebound to new highs and that should happen Tuesday morning. 
• This week Twitter graduated and is now listed on the S&P 500 and has gone up all week. Who knows what is going to happen next week with Twitter, but there is a lot of news happening:
• President Trump meeting about trade this weekend.
• On Tuesday is the summit with North Korea.
• On Tuesday there will be a court ruling on AT&T purchase of Time Warner.
• The Federal Reserve Board is meeting on Wednesday and we will have an announcement at 2pm on inflation and if the Fed Funds rates will be raised. Given the strong start to June, I would expect the rate to be raised and interest rates to start going up on Monday.

Friday Market News

• Since 2pm on Wednesday, Boeing (BA) and Tesla (TSLA) have moved in almost exact opposites according to their charts. Thursday and Friday, Tesla was down and Boeing was up. Tesla appears to hit a level of resistance to the downside Friday at 275 and Boeing is at a level that I have seen it stumble on this year. I wouldn't be surprised if both continued in their direction on Monday and reverse course on Tuesday.
• Alphabet (GOOGL) dropped prior to the market opening on Friday due to old news that Google may face monopolizing claims based on their shopping results. Sounds like garbage to me and according to the charts, it was due to come down. I would expect it to start down on Monday, hit a level of resistance around 1060 and take off to the upside for the remainder of the week. 
• The banks came down further on Friday, Walmart was nearly unchanged, but Home Depot had its regular Friday run. Trump tried to blast Amazon again with a Tweet to say that he recommends the post office to double shipping rates for Amazon. I wish they would double the rates on businesses mailing crap post cards and Discover with their crap credit card offers of 3 to 4 a week.
• What should we expect for next week? Higher interest rates? Higher oil? More tarrif talks? Korea issues? There are enough issues in the world that you can pick a number of reasons why the market might react in a negative way. Ultimately, the market is based on earnings and cream will rise to the top.

Another Approach to Healthcare Reforn

• There was not much movement in the stock market on Friday. If you were buying options expecting the movement we had on Wednesday you would be disappointed. This often happens ahead of President Trump speaking.
• Healthcare and pharmaceutical companies were up to start the day on Friday. Trump spoke about reducing the cost of prescription drugs by eliminating the middle man along with allowing Medicare to be able to set price limits on medication. I have believed for a number of years that it is necessary to bring down the cost of Healthcare before providing it for all. I believe the health insurance companies like United Healthcare will continue to rise on the news and the drug companies will not fair as well.
• Tech companies cooled off on Friday after Nvidia mixed earning report on Thursday afternoon. Monday should resume the tech run by Amazon, Google, Netlix, Apple and Nvidia. Because these companies ran up so much over the past 2 weeks, Thursday and Friday was a pause in the market.
• Home Depot has been up for the past 2 weeks and they report earnings Tuesday morning before market open. I don't know that they will go up that much after the run it has been on. Walmart is almost opposite case of Home Depot. Walmart had a great 4th quarter earnings report but the market was expecting more online revenue growth which beat the stock down and Home Depot went down with it. Walmart closed some Sam's stores and is in the process of buying India's Flipkart which will hugely boost online business. Walmart has nowhere to go but up after they report earnings on Thursday. 

Amazon to Splat!

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